A comparison of the treatment meted out to trade unions and accountancy trade associations
The UK government is rushing a trade union bill through parliament to curb the rights of workers. The Bill imposes a minimum turnout of 50 per cent for all binding ballots and a higher threshold for withdrawal of labour in public services. Organisers must obtain permission from the police.
Despite requests, electronic balloting is forbidden for trade unions. This is on top of the existing stringent requirements, such as one-person-one-vote, no delegated proxy voting system and election of all officers.
Trade unions can also be held liable for damage to employers. The government justifies draconian laws by claiming that trade union activities affect wider society, including those who are not members of trade unions.
Now let us compare the above with the government’s approach to power exercised by other organised groups. Accountancy trade associations, masquerading as professional bodies, wield enormous power.
Accounting logics promoted by accountancy trade associations influence the assessment of wages, pensions, dividends, taxes, utility prices and much more. Unlike conventional trade unions they have secured monopolies and niches for their members and these are guaranteed by the state.
UK companies above a certain size, schools, hospitals, housing associations, and trade unions are required by law to submit to an audit by an accountant belonging to a specific trade association. The market for insolvency is reserved for accountants belonging to selected trade associations.
Tax avoidance is a big money spinner for accountants though no accountancy firm has ever been disciplined or fined for peddling abusive schemes, even after the courts have declared them to be unlawful. No victim of accounting, auditing, insolvency and tax scams has ever been compensated by accountancy trade associations.
The power of accountancy trade associations affects the life chances of all citizens. How democratic and accountable are they? Consider the case of the Association of Chartered Certified Accountants (ACCA), the largest UK-based accountancy trade association with annual income of £164m.
It has a royal charter and is a statutory regulator of auditing and insolvency. It has 178,000 members worldwide. Its president, deputy-president, and vice-president are not directly elected by members. Instead they are appointed by its council.
For its business at the 2015 annual general meeting (AGM) 6,310 votes (turnout of 3.54 per cent) were cast. Unlike trade unions, electronic voting is permitted. Of the nine seats for council, the candidate with 2,520 (1.41 per cent of the eligible vote) votes topped the poll and an individual with just 1756 votes, less than 1 per cent of the eligible vote, was elected.
This includes 650 votes cast by the President under a delegated proxy voting system, a system forbidden for trade unions, general, local, and the European and Mayoral elections. One can only speculate about the beneficiaries of the President’s bulk vote.
Many companies boast remuneration committees, but shareholders still vote on executive remuneration. There is no such opportunity for ACCA members. Its chief executive collected a remuneration package of £368,157.
Nearly twenty years ago, I organised resolutions to democratise ACCA. Its response was to exert pressure on my then employers behind my back, an episode briefly explained here. Some former council members have been unhappy at the ACCA’s governance practices and have mobilised concerned members.
Such attempts have failed as the leadership has used the Association’s vast resources and the delegated proxy voting system to maintain status quo. Early Day Motions tabled in the House of Commons have condemned the ACCA’s lack of democratic practices.
Such pressures resulted in the appointment of the Electoral Reform Services to count ballots. Prior to that votes were counted by the chief executive.
For the 2015 AGM, concerned members tabled eight resolutions seeking an end to the use of the delegated proxy voting system and calls for greater accountability. About 5,300, or 3 per cent of the membership, votes were cast. This includes 700 votes cast by the President, sufficient to change the outcomes.
All were defeated, and one by just a single vote. Not only did the hierarchy use the organisation’s vast resources to maintain its hegemony, it also inserted a statement on the ballot paper, which in bold letters stated “Council recommends that members Vote AGAINST the following resolutions”.
Whether Electoral Reform Services objected is not known. The fees paid to it by ACCA are not disclosed. Trade unions are not permitted to insert such recommendations on ballot papers. One can imagine the outcry if the ballot papers for trade unions, Scottish independence, or the forthcoming EU referendum contained such recommendations.
A comparison of the treatment meted out to trade unions and accountancy trade associations shows that the government is engaged in a class war. The practices of accountancy trade associations affect every citizen, yet there is virtually no accountability to their own members, far less the general public.
Prem Sikka is professor of accounting at the University of Essex
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