Reorganization proposals top agenda for institute Fall meeting

by Melissa Klein

When members of the governing Council of the American Institute of CPAs gather in New Orleans this month for their Fall meeting, one of the critical issues on their agendas will be a discussion of their own role and responsibilities.

Council members will attend breakout sessions to review the recommendations made by a seven-member task force charged with reviewing Council’s role and responsibilities. That task force recommended several changes to the way the body operates, including electing its members more democratically, changing the length of their terms, and having them sign a statement of responsibilities upon accepting their posts.

In all, the committee, led by Colorado CPA Timothy O’Brien, made 14 recommendations.

The group was appointed in February by AICPA chair William Ezzell after the Massachusetts and New York CPA societies issued separate proposals last year calling for a committee to study Council’s responsibilities.

Both states raised concerns about Council’s role after its board approved the creation of the controversial XYZ global business credential, an all-encompassing designation that spanned several disciplines, including CPAs.

Council then voted to put the matter up for a full membership vote, only to have it soundly defeated by a margin of 68 percent to 32 percent. That left many institute members wondering why so much time and roughly $5 million in research were spent on the project.

“Council was not doing its job, letting [XYZ] out the door for a vote,” said Theodore Flynn, executive director of the Massachusetts Society of CPAs and a member of the task force. “Council wasn’t understanding what was going on in their own states. That brought up the issue of, what is Council’s role? The task force recommendations re-establish Council’s role as leaders of the profession.”

“After the situation we had with XYZ, there was a concern on the part of a number of people that the AICPA Council and the board of directors were becoming disconnected from the membership, and there were some questions about the role and responsibility of Council,” said Jeff Hoops, president of the New York State Society of CPAs and a member of the task force. “I’m personally comfortable that the AICPA addressed the issues I was concerned about, but there are other New York CPAs on Council and it remains to be seen what they’re going to think.”

Task force member Donald Gursey, a partner with Gursey Schneider & Co. in Los Angeles and a member of Council, said that the group’s goal was to make Council “a more cohesive group where more people are working more closely with the board.”

“We’re trying to get more input, to improve communication between the membership and the board,” he said.

Other task force members were Lisa Germano of Virginia, Mary Kline-Cueter of Michigan, and Scott Nelson of Iowa.

The group recommended that all AICPA Council and board members sign a statement of responsibilities upon accepting their positions, and said that once Council takes a position, members “should present the endorsed view of Council.”

“Members need to know that when you have a forum, the majority still rules,” Gursey said. “The minority is heard, but once a position is taken, you have a duty to support the initiative. You have a duty to support the conclusion of the majority, as compared to your own personal opinion.”

“The issue is, should Council members vote based on the best interests of the profession, or should a Council member be a funnel for his or her own constituency?” Hoops said. “We think Council members need to exercise their roles as leaders, but part of being a leader is being informed, soliciting input, and coming to an educated conclusion. If Council adopts something or takes a position, even if a Council member voted against it, they have a responsibility to present the Council’s view to the membership in a fair, objective manner. It doesn’t mean they can’t say they’re opposed to something, but they have to present it in a fair and objective manner.”

“That’s something I’m seeing in every organization I’m involved with,” said Council member Nita Clyde, chair of the Texas Society of CPAs. “But I don’t know that we’ll be able to legislate that.”

The group also proposed changing Council’s meeting schedule to include one national meeting and up to three regional meetings a year, instead of the current two national meetings and one set of regional meetings.

“The task force view was that the regional meetings are often a better way to get input and have an exchange of dialogue,” said Hoops. “The national meeting is very large, and it’s harder to get your view across.”

“There’s an intimidation factor” at national meetings, said Gursey. “New members are reluctant to speak up.”

Other recommendations aim to shake up the group’s composition, including one that Council adopt a resolution urging the state societies to use a democratic process in electing Council members. Currently, the process for getting on Council varies by state. In some states, like Texas, Council members are elected, while in others, like New York, Council members can be appointed by the state society president.

The group recommended changing term lengths for all designated and elected members to two years, with a maximum of six consecutive years. Currently, designated members (one in each state) are appointed to one-year terms, while elected members (the number of which is based on the AICPA membership in each state) are appointed for three-year terms.

“We’re trying to give the designated members more experience by changing their term to two years, and to give Council more turnover by making all terms two years,” explained Flynn.

The task force also suggested that new Council members be elected at the Spring meeting and assume their positions on August 1, the first day of the AICPA’s fiscal year, and that attendance at Council meetings be made mandatory, with any member who misses three consecutive meetings forfeiting their seat.

It also proposed that the board investigate ways to provide Council with more timely and comprehensive information on issues under discussion; that there be a mechanism so that Council members can suggest items for board and Council agendas in advance of meetings; that Council members receive more extensive training; and that they receive issues-briefing binders.

In addition, the task force called for breakout sessions and electronic polling to be regular parts of Council proceedings, for a forum open to all AICPA members at every Council meeting, and for Council to be permitted to vote by electronic ballot when it is not in session.

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