Ousted former CPA Australia chief executive Alex Malley did not comply with internal procedures in appointing board members of the association’s troubled financial advice arm.
Yesterday, ifa reported that the independent panel reviewing governance and remuneration issues at CPA Australia has confirmed financial losses and performance shortfalls in the professional association’s independent financial advice subsidiary.
The report also reveals that controversial former CEO Alex Malley, who publicly launched the CPA Australia Advice business alongside ASIC chairman Greg Medcraft, seized personal control over the process of appointing board directors to the AFSL.
At a CPA Australia board meeting in February 2015, Mr Malley – who was also chief executive of CPA Australia Advice – personally recommended candidates for appointment to the advice arm's board, according to minutes of the meeting.
The board then approved the appointment and remuneration of Mr Malley’s five recommended candidates, a number of whom were existing members of the board, including then-CPA president Graeme Wade, who received an additional $100,000 to serve as chair of the advice arm.
According to CPA’s reviewers, this process was out of step with the association’s own internal procedure for appointing board members.
“CPA Advice board appointment and remuneration did not follow the same procedure as CPA Australia,” the report stated. “Some members raised queries regarding the appointment of directors, especially the lack of clarity around the candidates for selection.”
The report said that it is “not unusual” for directors to be paid additional fees to sit on the boards of subsidiaries, but added that usually additional remuneration is reserved for “office-holders”.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 10 Dec 2018Only 12% of advice practices have exit plansBy Adrian Flores
- 10 Dec 2018CIPRs need to account for future mortality rates, study findsBy Adrian Flores
- 10 Dec 2018Freedom halts selling of life insuranceBy Adrian Flores
- 7 Dec 2018New ASIC deputy chair announcedBy Adrian Flores
- 7 Dec 2018Growth companies fund added to Macquarie WrapBy Adrian Flores
- 7 Dec 2018ASIC makes unique AFSL decision on foreign adviserBy Adrian Flores
- view all