Accountable crises - Richard Aitken-Davies

The irresponsible bosses should face court. Others, we accountants included, must accept we've erred.

Richard Aitken-Davies, President of ACCA writes in The Guardian

Remuneration and incentivisation packages for senior figures within the banking world have rocketed, but these rewards have become too closely linked to short-term, easy-to-manipulate financial metrics. The traders of derivatives want to have their "profits" recognised straight away in the employers' accounts and, thus, in their annual bonuses. But bonuses need to be related far more closely to long-term financial performance and, importantly, to movements in cashflow, rather than profitability. Rewards should not be paid out until proceeds have been banked.

Big savings on digital cameras at Misco

The roles of the chairman and chief executive are ultimately ones of accountability - to shareholders, to customers, to staff and, whether they like it or not, to government, the taxpayer and society at large. But our increasingly well-defined principles of corporate governance have not prevented this crisis. We therefore need to open our thinking to alternative models and, in particular, to the role and effectiveness of independent non-executive directors.

Visit for great offers. Click here.

If directors ignored bad habits, if they accepted complacency after a prolonged bull market then they should be held accountable. If they have overseen failure, and allowed greed to flourish then they are accountable for this, too.

2 shirts for £50 at Charles Tyrwhitt!

Naivety has also played its part, with well-meaning people succumbing to the seductions of advanced risk management techniques at the expense of common sense. And perhaps we accountants haven't said no enough, either.

Read Full Article on The Guardian

Do you like to be updated in Accountancy ?

Subscribe to Management Accountant by Email


Subscribe in a reader

SAP Store, UK

Visit MA Stores ? You will find something you are looking for ....

Management Accountant Store, US - Powered by Amazon
Management Accountant Store, UK Stores - Powered by Amazon, UK
Digital Store, US

You may also like to read

  1. Does IT strategy of your company influence your career
  2. ICAEW, UK launches new qualifications
  3. Choosing an Accountancy Qualification
  4. Ethics on ACCA website 11-Feb-2008
  5. Combined of Corporate Governance UK 20-April-08
  6. 100 Most Influential People in Business Ethics 18-Feb-08
  7. Professional Body 28-April-07
  8. Accountancy Profession in India 22-May-08
  9. Membership of Accounting Body - Value Proposition 20-Mar-08
  10. The Audit Cartel - Prem Sikka in Guardian 06- June-08
  11. Profession v/s Professionalism
  12. Accounting Technician course in India
  13. CMA 2.0 Portal Launched
  14. How to Share Blog posts with friends 25-May-08
  15. Management Accountant Blog Home
Post a Comment


Popular posts from this blog

Throughput Accounting

Learning Curve Theory

Resistence to Change - Approaches of Kotter and Schlesinger