The Lack of Transparency at CPA Australia: A Synopsis of Media Reports

The Editors

CPA Australia Ltd. is an unlisted company limited by guarantee. Issues with regards to its governance were first raised in articles in the Rear Window Section of the Australian Financial Review (AFR), and have also been picked up by other media outlets. Here is a synopsis of the articles, summarised by issue; although many issues are co-related. [Please note that this is only a synopsis of the many issues highlighted in the media. The Editors themselves have no opinions of the issues that have been highlighted. The Editors have also not verified some of the facts stated and claims made in the media reports; and leave these matters up to the reader.]

Self-Promotion by the CEO

The first issue, is about the excessive marketing to build up the CEO’s own ‘brand’. Essentially, the many articles on the issue state that the CEO (with the approval of a compliant Board) have spent over $50 million of members’ subscriptions on promoting the CEO himself – by publishing his book, ‘The Naked CEO’ and sponsoring his TV program, ‘In Conversation with Alex Malley’ – with very little promotion of, or benefit to, CPA itself and its members.  Malley’s member-funded self-promotion have been talked about on the members-only CPA Australia Members Group on LinkedIn; and the following postings are given as examples (Aston (2017a):

I’m a member of three accounting bodies,” writes Chris Catto. “One is about C-grade celeb interviews, name dropping and random content . . . I would have nothing to say if CPA was outperforming its competitors.”

“Governance changes . . . have had the effect of reducing the ability of members to influence who sits on the [CPA] board directly, and the selection process is far from transparent,” writes Mike Sewell.

“The members are the shareholders, and directors should be elected by vote,” argues James OBrien. “Unless this happens, nothing [will] change. I also find it interesting that no one is prepared to talk openly about this but everyone is saying the same thing in private.”

Disgruntled CPA Australia member Brett Stevenson states that, “The book, the TV show, it’s all just the biggest rort on us members, and we’re getting increasingly sick of it”. “I mean, we’re an Australian accountants membership organisation. What can The Fonz possibly have to tell us that we need to pay a membership fee to know?” (Aston & Corbett, 2017).

Ordinary CPA Quarantined from Board & Committee Positions

The second issue is that ordinary CPA members have been completely cut out from any participation in the decision making at CPA Australia. Aston (2017a) states that It is remarkable that a professional standards group that lectures others on corporate governance is so plainly short of best practice itself. Members do not even directly elect its board! Directors (remunerated generously) are appointed by an internal subcommittee also unelected by members – a “reform” overseen by Malley, the champion of other organisations’ transparency.

Aston, & Corbett (2017b) state that an Armidale (New South Wales, Australia) accountant Brett Stevenson, has analysed all of these constitutional changes plus board and executive remuneration at the professional standards organisation – in all-member broadcasts, that most members don’t read carefully. Stevenson is quoted as saying that the outcome of all these “reforms” is exorbitant remuneration packages for the CEO and Board.

Excessive Remuneration Packages to CEO and Board

This is a very big Issue. As per Aston, & Corbett (2017b), on the very day that Malley became CPA president (October 1, 2007), a constitutional change was effected to increase the president’s salary by a healthy 50 per cent – from 40 per cent of the Commonwealth Auditor-General’s remuneration, to 60 per cent of it. At the same time, the deputy president began earning 25 per cent of the A-G’s pay. That was previously a volunteer position (without pay).

From April 1, 2010, the rest of the board began earning 15 per cent of the A-G’s package – which in 2016, is $692,200. That means CPA’s (non-executive) president is earning $415,200 in 2016 while other board members get $103,800 to attend seven meetings (11 for those on subcommittees). At the same meeting, another amendment extended the maximum terms of directors from six to nine years (actually to 11 years under a ‘transitional’ arrangement). Interestingly, of 155,000 members paying fees of around $700 each year, around 450 (less than 1%) of them voted for the resolutions to extend directors’ term limits and introduce or increase their pay.

Aston, & Corbett (2017b) go on to say that as the board stands today, three members have served for more than a decade: Petty now in his 11th year (during which time he has earned $1.125 million in director’s fees), Graeme Wade in his 11th year ($1.42 million) and Kerry Ryan ($615,000) hitting the big 10 in October, all in apparent breach of the organisation’s constitution[1]. Malley and his two direct reports shared an executive remuneration pool of $2.95 million in 2016.

This, according to media reports, is completely out of sync with market conditions. Aston & Corbett (2017d) state that despite reporting annual revenue of $170 million, CPA spends $1.7 million on directors’ fees. That is triple what Harvey Norman – a large retailer (revenue is $1.8 billion) – pays its board. It is nearly double what Super Retail Group pays its board, and its revenue is $2.4 billion. The CPA chairman is paid $420,000 while the chairman of Nufarm – an agricultural chemical company (revenue $2.8 billion) – is paid $330,000. Aston & Corbett (2017d) asks the readers to note the difference between “million” and “billion”.

Large Remuneration Packages at Other Professional Financial Accounting Bodies

In response to inquiries by the Australian Financial Review journalists Tadros & Magliarachi (2017), Chartered Accountants ANZ revealed that their CEO Lee White will take home $600,000 (including superannuation) in 2017. The salary package includes an ‘at risk’ performance payment based on reaching certain key targets set and agreed by the board. In 2016, this bonus was worth 28 per cent of Mr Lee’s undisclosed base pay for that year. The accounting professional body also revealed that president Cassandra Crowley will be paid $120,000 in 2017, board chair Murray Jack will be paid $100,000 while the eight directors will take home $50,000 each. “We hold ourselves to the highest levels of transparency regarding Board and executive remuneration,” Mr Lee said. The body will also publish the pay data on to its website.

Tadros & Magliarachi (2017) comment that it is worth noting that Mr Lee’s base pay is more than the Chiefs of the Navy, Army and Air Force are individually paid and around that of the remuneration of the Australian Border Force Commissioner. Chartered Accountants ANZ had about 117,000 members as of December with 2016 financial year income of $125 million.

Tadros & Magliarachi (2017) also state that another of CPAs competitors, the Institute of Public Accountants (IPA), in its 2016 annual report, shows a collective $2.14 million was paid to key management personal including CEO Andrew Conway and about eight other staff. IPA had about 35,000 members and income of $18.72 million in the 2016 financial year. Aston & Corbett (2017d) reported that each of its directors get an annual fee of $6,000.

The latest annual reports of all three financial accounting bodies do not provide any individual pay breakdown of the chief executive, key management and board members. Note that there is no legal obligation for the bodies to disclose individual pay of key executives; but some members feel that accounting bodies should be even more transparent. Will Camphin, a CPA member, said transparency was particularly important for the accounting body.

“Marketing yourself as a global brand lends itself to maintaining the highest level of transparency and where this is a basis for decisions to remunerate in kind then there is a case for greater disclosure to be carefully considered.”

Takeover of CPA Board by Macquarie University Academics

An interesting observation is the link of most key players in this sorry saga to Macquarie University.  Aston (2017c) states that CPA Australia chief executive Alex Malley left Macquarie University in 2006 under a confidential settlement after the accounting lecturer was accused of serious misconduct.

Malley was allowed to resign without any finding of wrongdoing after allegedly directing hundreds of students each year to undertake paid tutorials through his wife’s company, without Macquarie’s knowledge. He also resigned mid-term (in June 2006) from his staff-elected position on the Council of Macquarie University, its highest governing body.

Aston (2017c) states that Mr Malley was asked to explain student complaints that he was giving bonus marks in the university’s first-year course, Accounting 101, to students who paid to complete private modules via Mrs Malley’s website, Edextreme[2]. Aston (2017c) states that if these allegations are proven, this would have been a prima facie breach of university policy and of the Commonwealth’s Higher Education Funding Act, which proscribes auxiliary course-related charges (in addition to published fees) being imposed on students.

Mr Malley was a serving director of CPA Australia when he resigned his faculty position at Macquarie. Despite the abrupt end to Mr Malley’s academic tenure, he was elected CPA’s president fewer than 16 months later, on October 1, 2007. At that time, another Macquarie academic, Richard Petty, sat on the CPA board and its Nominations and Remuneration Committee. Professor Petty was the committee’s chairman from 2010 to 2015.

Aston, & Corbett (2017b) then say that Malley then went from the lucrative presidency to the even more lucrative (and disruptive) CEO’s role. The position of CEO was never advertised. Malley’s friend Richard Petty – they lectured at Macquarie University together – replaced him as president. Tyrone Carlin, another ex-Macquarie professor is the current CPA president.

CPA Australia have said that an (unnamed) search organisation interviewed potential candidates for Malley’s CEO job. However, the question still remains as to why the position was never publicly advertised.

Richard Petty has chaired CPA’s remuneration and nomination committee (which controls both what Malley and themselves are paid, and influences who sits on the board) from 2007 to 2016. Graeme Wade has been a CPA director since 2006 and sat on the Nominations and Remuneration committee in 2013, and from 2015 to the present day. He replaced Professor Petty as its chairman in 2016. Ryan has sat with him the whole time, and Wade since 2013 (Aston, 2017c).

Aston (2017b) states that, “We haven’t seen takeovers like these since student politics. Which is funny, because Malley, Carlin and Petty all worked together at Macquarie University up until 2006. Petty and Carlin published multiple research papers together in that year[3] and Malley even sat on the university council until, unusually, stepping down mid-term in June. Anthony Matis, who was at that time the chief of Macquarie’s student union, is now CPA’s head of international business development”.

Aston (2017d) asks, “How was an accounting lecturer asked by his university to show himself the door over allegations of financial impropriety elected the president of a professional standards body for accountants 16 months later? And then its chief executive two years after that?”

Moving AGM Overseas

The only little voice that the members have, is to turn up at the AGM and protest. As such, a special resolution to be put at the AGM is now being circulated among the burgeoning pool of dissidents: to cut in half the remuneration of the board. The resolution requires just 100 signatures – already oversubscribed – but will also need a 75 per cent vote in favour to carry.

Therefore, the group of dissidents went to the CPA website’s “Find a CPA” function (which allowed the public to find an accredited member in their area) to contact members to sign the special resolution. CPA Australia promptly closed down its “Find a CPA” function! The CPA top management apparently believes that driving client leads is secondary to its dangerous power – i.e. allowing CPAs to contact each other! Aston & Corbett (2017d) state that, “as bean counters across the land increasingly organise against the CPA executive and its directors, as the disruptors become disrupted, HQ is seemingly jamming communications, however they can. Extraordinary”.

Then came a bombshell for all those disgruntled CPAs waiting for the AGM. CPA announced that it was moving its AGM venue to Singapore! The first time in its 100-year history!

Aston & Corbett (2017e), had this to say about that action:

Jaws hit the floor late on Wednesday when CPA Australia president Tyrone Carlin announced, in an all-member email, that the professional standards body was finally holding its annual general meeting on April 27… in Singapore! Yep, CPAs unable to fly 10 hours to the gathering (that would be 99.5 per cent of them) will just have to dumbly watch (as opposed to actively participate in) proceedings via a streamed video feed online”.

Aston & Corbett (2017e) go on to say. “You almost have to begrudgingly admire Malley and his complicit board members for their sheer effrontery. Under huge pressure from members for their comic levels of spending on generating Malley exposure for no accounting-related objective, and for appallingly opaque governance standards. What will it cost CPA members to fly their 12 directors, three key management personnel and all of their flunkies to south-east Asia for a meeting that ought to be in Melbourne?”

CPA Defends its Actions

To control all this outrage amongst members, CPA Australia, claimed to have sent a 16-page document on ‘Governance’ to all its 155,000 members justifying its heavy spending on an autobiographical book and TV show featuring chief executive Alex Malley (Tadros, 2017).

Interestingly, this document appears to have been only sent to some ‘selected’ members; i.e. those who contacted CPA Australia about the media reports; i.e. less than 1% of members.

Further, the claims in that ‘Governance’ document are extraordinary. CPA Australia states that the spending (which is not detailed) on Mr Malley’s book The Naked CEO, the TV show In Conversation with Alex Malley “support[s] our strategy to attract new members, primarily in the youth market”. “Building personalised brand relevance with young audiences, via platforms they use (social media, television) helps to attract new members, creating a healthy pool of CPAs in the long term, which can only be a benefit for … member succession plans and recruitment,” the document goes on to state.

Aston (2017b) ask if anyone knows of any “youngsters who live for management speak airport books? Or stay home on Saturday nights to be up early enough for a Sunday morning chat show, offering vaguely congruous insights from elderly Dutch violinist Andre Rieu, 1976 Olympian gymnast Nadia Comaneci, 78-year-old feminist Germaine Greer and 1970s sitcom personality Henry Winkler (the Fonz)?! Youth market?”

Also, the numbers do not add-up. In the document, it states that in 2016, CPA spent 16 per cent ($28.8 million) of its turnover ($180 million) on “marketing, promotion and publications”. Of that, “just 6 per cent” ($1.8 million) was spent on “[TV show] In Conversation and The Naked CEO book”. Aston (2017b) such low numbers just cannot account for the sheer size and tenure of Malley’s paid likeness on billboards, buses and bus shelters, in airport terminals, print and on TV. It’s saturation marketing. Aston (2017b) rightly asks, “so where in the cost line is the spend hiding?”.

The CPA document also defends the pay of senior officers but does not detail the individual pay of Mr Malley or other key executives. “Board remuneration and chief executive remuneration is in line with the market, based on regular advice obtained from independent remuneration consultants,” the document states.

As you can see from the remunerations comparisons made earlier in this article, this does not appear to be factually correct.

Media Reports Referenced

Aston, Joe (2017a) “Henderson takes aim at Malley”, Rear Window, The Australian Financial Review, Feb 20, Melbourne, Vic., Australia, p.40.

Aston, Joe (2017b), “Unpicking Alex Malley, CPA spending defence”, Rear Window, The Australian Financial Review, Mar 20, Melbourne, Vic., Australia, p.40.

Aston, Joe (2017c), “CPA’s Alex Malley’s confidential Macquarie Uni exit”, Rear Window, The Australian Financial Review, Mar 26, Melbourne, Vic., Australia

Aston, Joe (2017d), “Macquarie University bequeathed Alex Malley to CPA Australia members”, Rear Window, The Australian Financial Review, Mar 26, Melbourne, Vic., Australia. (accessed April 3 2017)

Aston, Joe & Corbett, Bryce (2017a) “CPA’s Alex Malley and his sidekick will go anywhere for members”, Rear Window, The Australian Financial Review, Mar 2, Melbourne, Vic., Australia, p.48.

Aston, Joe & Corbett, Bryce (2017b), “CPA members baulk at Malley, board pay”, Rear Window, The Australian Financial Review, Mar 3, Melbourne, Vic., Australia, p.40

Aston, Joe & Corbett, Bryce (2017c), “CPA’s Alex Malley addresses the troops: ‘nothing to see here”, Rear Window, The Australian Financial Review, Mar 7, Melbourne, Vic., Australia, p.40

Aston, Joe & Corbett, Bryce (2017d), “CPA Australia disables search tool, delays on AGM, annual report”, Rear Window, The Australian Financial Review, Mar 13, Melbourne, Vic., Australia, p.40.

Aston, Joe & Corbett, Bryce (2017e), “CPA finally announces its AGM – in Singapore”, Rear Window, The Australian Financial Review, Mar 17, Melbourne, Vic., Australia, p.44

Bullock, Lara (2017), “CPA Australia defends controversial AGM location decision”, Accountants Daily, Monday, 20 March,, (Downloaded March 29, 2017)

Bullock, Lara & Vickovich, Aleks (2017), “CPA member rebellion gaining traction”, Accountants Daily, 21 March, (Downloaded March 29, 2017)

Tadros, Edmund & Magliarachi, Sergio (2017), “Accounting body reveals executives’ pay”, The Australian Financial Review, Mar 16, Melbourne, Vic, Australia, p.4

Tadros, Edmund (2017), “CPA Australia defends pay, marketing spend”, The Australian Financial Review, Mar 18, Melbourne, Vic, Australia, p.6

[1] Actually, they are not in breach due to the ‘transitional’ arrangements that extended the term to 11 years.

[2] The Australian Securities and Investments Commission began strike-off proceedings against Edextreme in January 2007 and the company was formally deregistered in April 2007 (Aston, 2017c).

[3] Actually, it was just one Conference Paper and two Conference proceedings.


The opinions in this article reflect those of the editors and not necessarily that of the organisation or its executive.

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