If ever there’s been a time to think about the big picture, this is it. Whether you’re talking about the environment, the economy or your own organisation, the spotlight is on sustainability. 
 
Story Tony Malkovic 
 
Depending on your point of view, Kevin Rudd’s 2020 summit earlier this year was an innovative way of tapping into the collective talents of our best thinkers and leaders to help shape a better Australia. Or perhaps – as some critics did – you might have seen it as a massive PR stunt from a do-nothing government undertaking a blatantly political exercise. 
 
But one thing it did achieve was to focus many people on thinking about the future and the sort of country we want Australia to be, the sort of economy and tax system we want to work with and the sort of lifestyle we want for our kids. 
 
The summit fuelled debates at bars, dinner parties and backyard barbecues. Which is no mean feat. People who might not normally think beyond their next pay packet were suddenly challenged to think in terms of where we are now – and where we want to be in a decade’s time. 
 
It’s that approach that everyone in business needs. Because if you’re not thinking of where you’re heading – and how to get there – you’re not doing your job. And the key to making sure your organisation has a viable future is to make it sustainable. 
 
The concept of sustainability is a difficult one to define in concrete terms. But in essence, it embraces the concepts of change, keeping things in good shape for the future – and staying relevant. Brooke Broughton is keenly aware of the changes an organisation goes through as it matures and changes to keep ahead of the times. 
 
Broughton is writing a history of the Institute of Chartered Accountants over the last 30 years. 
 
In effect, it’s an update of the history of the Institute’s first half century that was written as part of its golden jubilee in 1978. Broughton says he’s not looking for skeletons in closets, but if there were any, he’d probably have a reasonable idea where to find them. 
 
“I’ve been with the Institute for 28 years, so I’ve been here for nearly all of that 30-year period,” he says. 
 
“I’ve now got a part-time role in the professional conduct area, but I’ve had a number of other roles with the Institute, including being part of the senior management team for quite a long time.” 
 
Enormous Growth 
The economy might have been progressing in fits and starts in that 30-year period. But for the Institute, one constant, dominant theme has emerged. 
 
“The last 30 years has been a period of enormous growth for the Institute,” says Broughton. 
 
“Way back in 1928, membership was in the order of about 860 members who were members of the predecessor body which obtained the Royal Charter. 
 
“It took until 1978 for membership to reach 10,000 – which happened within weeks of the 50th anniversary. 
 
“But by 1990, it was about 20,000 – so it doubled within that 12-year period and then doubled again to 40,000 by 2004. 
 
“So there’s been huge growth of the membership in that period. And that’s had all sorts of implications in terms of what we do and the services required.” 
 
That membership has now swelled to some 47,000 Chartered Accountants, along with some 12,000 graduates enrolled in the postgraduate Institute’s Chartered Accountants Program. 
 
Providing the facilities and services for that membership has also meant a corresponding rise in Institute staff. Broughton says in 1980 the Institute had 73 staff, now it has 320. 
 
In some ways, the growth of the Institute follows that of the Australian economy. There were boom times throughout most of the 1980s and again for much of the 1990s and the current century. 
 
“Business has become more complex, tax laws have become more complex and so have reporting requirements for companies. As a result, there’s just been a greater demand for accountants, which is ongoing, of course.” 
 
Mind you, the Institute nearly became much bigger, much quicker, when members voted on whether to amalgamate with CPA Australia, the body representing Certified Practising Accountants. 
 
Broughton says that in the three decades his history is covering, there were three merger votes – in the early 1980s, in 1991, and again in late 1998 – but none was successful. 
 
“In 1998, just over 40 per cent voted in favour, and the proposal would have required a two-thirds majority, so it was a fairly decisive ‘no’,” says Broughton. 
 
Under Attack  
Anyone who lived and worked through the past three decades in Australia knows that times weren’t always good. And when the economy sours, rightly or wrongly, fingers are sometimes pointed. 
 
“There have been periods when the profession has been under attack or perhaps criticised for its role in the wake of various corporate collapses,” says Broughton. “And that is a cyclical thing. It happened right at the beginning of the very period I’m writing about. In the late 1970s, for instance, there was criticism of the role of the auditor and so on.” 
 
The Institute responded to concerns and carried out a review of professional standards. 
 
“In fact, one of the things that led to was a significant rewrite of the independence standard which was fairly old at that point,” recalls Broughton. 
 
“More recently, there was another major revision of the independence statement a few years ago. 
 
“And that was in the light of fairly widespread concern about independence issues both here and overseas, because increasingly we look at things like this on an international basis.” 
 
One thing that Broughton has noticed in chronicling the last three decades is the change in expectations demanded of the profession, a desire for greater accountability. “People treated accountants, like a lot of professions, with a certain amount of awe and didn’t question them,” explains Broughton. 
 
“But now there’s questioning about the role of accountants, about expertise and other things, so the Institute and other professional bodies have had to meet those expectations. 
 
“One of the things that was introduced in the mid-1980s was compulsory continuing education. 
 
“Prior to that, people were simply expected to keep up to date with their education. “So we introduced compulsory continuing education so that we can satisfy the broader community that we are monitoring and enforcing our standards.” 
 
What was the original professional year program, or PY as it was known, underwent considerable change (see accompanying story). 
 
“That was progressively refined and developed over the years and then replaced in 2001 by what is now the Chartered Accountants program,” explains Broughton. “So there’s been a continuous shift and emphasis on raising the entry standards.” 
 
More Professional 
Coinciding with that accent on professional standards was an emphasis on the Institute becoming more professional in the way it operated. 
 
“Until the mid-1970s, the Institute was largely run by the members, partly because it was a much smaller body and also members had the time to devote to it,” says Broughton. “One of the changes that happened around the time I’m covering was a major shift in the governance and management of the Institute, firstly away from volunteers running it – although that’s an important part of it and remains to this day – to staff managing the Institute with the board setting the policy. 
 
“In 1978-79, there was a review of the operations and that led to the appointment of the Institute’s first executive director and also a number of other senior management staff.” In effect, the Institute was showing the classic signs of an organisation growing and adapting to meet changing demands and expectations. In other words, it was reinventing itself to be more sustainable in the long-term. 
 
“In fact, that happened at a number of levels, the Institute was traditionally governed by a national council with state councils doing the legwork on the ground,” he says. “Traditionally – and this goes back to before the period I’m covering – the State branches had control of the purse stings, for example. So the subscriptions were collected at the State level and a levy was paid to the national office to carry out the national office functions.” 
 
That was reversed in the early 1970s, he says, with the national office then collecting the money and then distributing it to the states. 
 
Broughton says history doesn’t record if the state branches were over the moon at the national office taking control of the purse strings: “I suspect they probably weren’t,” he suggests, but adds that it did result in better overall budgeting and financial control. Getting any group of individuals based in separate states to work closer together and accept change can be a complicated juggling act. You generally need someone with vision, leadership and good people skills. 
 
While successive presidents and other senior members led the process of change, Vic Prosser played a pivotal role. Prosser was the Institute’s first executive director, from 1979 to 1991. 
 
“Vic really drove the process to where staff managed the place,” Broughton says. “After Vic came along, there was much more of a focus on communications with outside bodies and government relations. There was also a much more structured planning process with the development of a strategic plan. He was responsible for setting 
all that up.” 
 
After Prosser, Stephen Harrison was Executive Director and then CEO for some 14 years until he retired in 2005. Harrison consolidated the role of the chief executive, which started with Prosser, as being the main spokesman for the Institute, rather than the president, who is elected for a period of only one year. 
 
“The decision was taken that for continuity purposes it should be the chief executive,” explains Broughton. “That was where he became, in effect, the face of the Institute.” 
 
International Links 
But while the Institute was re-organising itself at the national level, it also kept a keen eye on developments offshore, with a view to having a voice in the profession at the international level. 
 
Broughton says Australia has always had a strong role in the international accountancy field, partly due to the continuity and personalities of the Institute’s leaders. “Because of their length of service, both Vic and Stephen became, if you like, senior executives of the whole international accounting scene and became very well known and played a very significant role on the international scene,” says Broughton. 
 
“There were two bodies set up in the 1970s, one was the International Federation of Accountants and the other the International Accounting Standards Committee, which is now the InternationalAccounting Standards Board. 
 
“Australia was a foundation member of both of those bodies and has always been represented on the councils of those bodies. So we have played a major role in the international scene.” 
 
It’s a role the Institute continues to pursue, particularly with its involvement with the Global Accounting Alliance. 
 
There’s another issue that the Institute has actively been involved with over the decades, one which Kevin Rudd has pledged to investigate in the wake of the 2020 summit: reforming Australia’s tax system. 
 
“The Institute was involved in both the economic summit and the tax summit that Bob Hawke held way back in the 1980s,”Broughton says. 
 
“The Institute always had a keen interest in tax reform and it’s been advocating reform for a long time, particularly the move to indirect taxes (which resulted in the GST) rather than a reliance on direct taxes. 
 
“And also on tax avoidance, the Institute in 1979 was one of the first to come out and make a public stance about tax avoidance, that it was improper.” 
 
Broughton’s updated history of the Institute will be available later this year. He says although the Institute has flourished and has constantly sought to re-examine its role and services, there’s one other key to being sustainable. 
 
“We have to remain relevant to our members, and the growth over that period shows that we have remained relevant. And of course, the challenge for the future is to continue to do so,” he says. 
 
And that’s not just the challenge for the Institute, it applies to any organisation looking ahead to 2020 – and the decades beyond. 
 
 
A case study in future -proofing 
In MBA courses these days, they talk about studying organisations and the need to embed sustainability and espouse corporate social responsibility. 
 
The buzzwords might mean different things to different people, but in essence, what you’re doing is trying to ensure your organisation’s future, while at the same time being aware of your social and ethical responsibilities. 
 
It’s a lesson the Institute took onboard a long time ago, having gone through several transformations during the past 80 years. 
 
Most recently, the Institute carried out a comprehensive overhaul of the way it operates to make sure that it hits the spot with its members and the profession. The Fit For The Future program was launched in 2006, aiming to improve operational effectiveness across every part of the Institute’s activities. 
 
“A lot of that work involved making us more efficient. We took a fresh look at the entire organisation, and asked ourselves some tough questions, no stone was left unturned,” is how Rob DiMonte, the Institute’s then president, described the program. 
 
Basically, the Fit For The Future program involved taking a fresh look at the Institute – internally and externally – to see what was working, and what could be improved. 
 
As a result, the Institute introduced a new customer service division, making it easier for members to deal with it. 
 
Accountability  
It also introduced an organisation-wide management operating system to increase efficiency and accountability.  
 
And it conducted a complete review of its Royal Charter and by-laws to ensure a more nimble governance structure to assist faster decision-making. 
 
But the program involved more than internal housekeeping. It also focused externally on recruiting and training new members, meeting the needs of current members, leading debate on industry issues and making a contribution at the international level. 
 
A strong emphasis was put on making the Institute more sustainable by tackling the skills shortage through recruitment and the retention of members. 
 
The Chartered Accountants Program was overhauled, with four new technical modules and a new ethics and business module introduced. Along with better timetabling, these changes sought to help address the skills shortage by fast tracking technically competent, work-ready graduates. 
 
But it also aimed to serve existing members by providing more than 2000 events, forums and seminars around the country over the last year, as well as a host of publications and electronic tools such as DVDs and CDs. 
 
The program also addressed the big picture through focusing on lobbying and leadership issues for business such as tax, auditing, financial reporting and superannuation, as well as contributing to the campaign on differential auditing. And on a different level, the Institute consolidated its position as the only Australian member of the Global Accounting Alliance, ensuring it has a voice on the worldwide body that represents more than 700,000 accountants.