President's report
In this report:
New Zealand on the world stage
2007/2008 has certainly been an interesting year. We began our centenary celebrations, our membership numbers went over 30,000, we have appointed a new chief executive and initiated a significant review of our governance through the Fit for the Future review.
Chief executive appointment
There is no doubt the key position in any organisation is the chief executive. At the end of 2007, Garry Muriwai resigned to take up a position in Bahrain. Garry had been the chief executive of the Institute since 2003, through a time of considerable change. In his five years as our chief executive, the Institute has set in place a long-term strategy; launched a new brand – changing our trading name to the New Zealand Institute of Chartered Accountants; become a moving force on the world stage, including as initiators and inaugural members of the Global Accounting Alliance (with Garry is first chair); and relaunched the Associate Chartered Accountants College.
The Executive Board worked through an extensive recruitment process and in May we announced that Terry McLaughlin FCA would take up the role of chief executive of the Institute. Terry’s most recent experience has been as the Executive Director of Audit New Zealand, the operating arm of the Office of the Controller and Auditor-General (OAG), since April 2004. He was with the OAG for nearly ten years, previously as an Assistant Auditor-General in the Parliamentary Group and Director Quality Assurance. Prior to that, Terry had six years’ experience working for Ernst & Young in both New Zealand and the United Kingdom.
Terry’s long involvement with the Institute led to him being awarded a Fellowship for service to the Institute and the profession in October 2007. He was a member of the Professional Standards Board from 1998 to 2005, latterly as the deputy chair, and is a past member of the National Professional Development Committee and the Wellington Public Sector Committee. He has been a member of the Institute's Executive Board since 2006.
All of this experience and his own personal leadership qualities made him the ideal candidate for our chief executive role. He understands how the profession works, and we are delighted to have secured him to lead the Institute into its second century.
100 years on
On 15 September 2008, we celebrated the 100th anniversary of the signing into law of our founding Act.
It was clear that, to have lasting value, the centenary celebrations had to be about more than just looking at the past; more than just an excuse for a party. Yes, we had every right to be proud of what we’d achieved for the profession, for business and for the wider society over the last 100 years. Yes, we intended to celebrate. But beyond that, we wanted the centenary celebrations to look forward, to help build a platform for our contribution in the next 100 years.
We’ve taken every opportunity at branch and national level to use the centenary as a peg to hang a message on – to our members and to the wider community through newspapers and other media. That message is that you, our members, are skilled and vital professionals who have been contributing to business growth for 100 years, and who can be counted on for business leadership for the next 100. The centenary conference in August focused on looking forward, and was a great success. I believe we have set a good base for the next 100 years.
Growing the profession
One of our celebrations this year was the morning tea in April for the young woman whose acceptance into membership tipped our numbers over 30,000 for the first time. Malaysian-born but now based in Auckland, Sandra Wee did her BCA at Victoria University of Wellington in the 1990s, returned for a time to Malaysia, then settled in New Zealand in 2000 where she put her career on hold to begin a family.
Being given a chance to do accounting work in her current role made her revisit this pathway and she completed her graduate diploma in accounting at Victoria University in 2004. I was delighted to be part of this important milestone in the Institute’s 100-year history in New Zealand.
As at 30 June 2008, the membership was 30,461. Much of this increase is due to the success of the Associate Chartered Accountants College special entry route, which has seen 596 members accepted as provisional or full members of the relaunched College in the year to 30 June 2008.
It is interesting to note that the Institute, in its lifetime, has accepted a total of 46,000 people into membership. That means that approximately two-thirds of that number are members today; our members are both loyal and long-lived!
Reviewing the way we govern
As part of our commitment to our members, we need to continually reassess whether our structures and processes are appropriate to the challenges and pressures that we face.
This year we engaged an external reviewer (Effective Governance Ltd) to look at the Institute’s current governance structure, processes and performance. This is to ensure that the Institute is "Fit for the Future" in achieving its strategic direction and meeting future challenges. This review is expected to be completed and recommendations presented to Council in October 2008.
A wide range of stakeholders (including Council, Board, national committees, branch committees, Institute staff, all members and some external organisations) have been involved in the review, providing views as to what is working and what we could do better.
We live in interesting times
The times we live in are indeed “interesting”. The world has basked in a long period of financial growth, but trying economic times lead to more pressures on professionalism as business owners face an increased likelihood of business failure.
As a profession, we need to be more accountable and more transparent in such an environment, and to maintain public confidence in the profession and in the businesses that we serve. This is a challenge as we continually try to strike a balance between a seeming narrowing of the profession in terms of external reporting, compliance reporting and assurance services and, at the same time, a broadening in terms of business management, finance, strategy and business leadership.
New Zealand on the world stage
These are matters that affect the profession throughout the world, and New Zealand continues to make a significant contribution to the international debate. Fraud on an unprecedented scale has led to legislative responses that our members need to deal with. In our submissions on international standards we are seeking to ensure that the compliance costs of such responses do not outweigh the benefits, and that the interests of public confidence are met with appropriate measures.
The international financial reporting standards are now law and are beginning to have an impact in the market place, which has meant a huge workload for the Institute’s Financial Reporting Standards Board and the financial reporting and professional development teams. I thank them for their efforts. We are currently working with the Ministry of Economic Development on a significant project on the Financial Reporting requirements for non IFRS entities. This will have a significant effect on businesses into the future.
Financial performance
Despite these pressures, the Institute held its costs within budget. Indeed, as you will see from the financial reports, we returned a surplus, which has meant that we could hold subscriptions at their previous level.
At the same time, as you will see from the chief executives’ and divisional reports, we have progressed a number of important projects to ensure that the Institute remains strong and effective as we enter our second century.
Thanks
I’d like to take the opportunity to thank the three chief executives I’ve worked with in this financial year – Garry Muriwai, Keith Wedlock, and Terry McLaughlin.
I particularly want to thank Keith, who took on the role of interim chief executive when Garry left and held the fort for the first six months of calendar year 2008. Keith’s leadership – and the support given to him by the management team – meant a seamless transition between permanent chief executives.
I also want to acknowledge my fellow Board members, Council members, people on the many national and branch committees, and all of those who give generously of their time to ensure that the Institute is the best it can be.
Graham Crombie
President