I was told about the speech by Lord Benson by Martyn Jones, the President of the Institute of Chartered Accountants of England and Wales during his visit to Kuala Lumpur recently. The speech clearly provides the foundation of the accountancy profession which sometimes may not be understood by those who are in the leadership position of the profession itself.
Interestingly, Lord Benson mentioned the concept of public benefit, instead of public interest which we are accustomed to.
I trust accountants out there would benefit from this speech.
|Myself with Martyn Jones and Ramesh Rajaratnam at the |
welcoming dinner of the MIA Conference 2013
Hansard of the speech by Lord Benson at the House of Lords on 8 July 1992
My Lords, I should perhaps declare an interest. I am a member of the accountancy profession and have been practising that profession for the past 66 years. Around eight years ago my profession set down what it believed were its obligations to the public. It is worth recounting them because they are the foundation on which all professions must be built and on which their futures depend. Moreover, any profession which follows those obligations will have no need to fear the future. The Government can always be satisfied that it is healthy.
The nine obligations to the public are these. First, the profession must be controlled by a governing body which in professional matters directs the behaviour of its members. For their part the members have a responsibility to subordinate their selfish private interests in favour of support for the governing body.
Secondly, the governing body must set adequate standards of education as a condition of entry and thereafter ensure that students obtain an acceptable standard of professional competence. Training and education do not stop at qualification. They must continue throughout the member's professional life.
Thirdly, the governing body must set the ethical rules and professional standards which are to be observed by the members. They should be higher than those established by the general law. Fourthly, the rules and standards enforced by the governing body should be designed for the benefit of the public and not for the private advantage of the members.
Fifthly, the governing body must take disciplinary action, including, if necessary, expulsion from 1209 membership should the rules and standards it lays down not be observed or should a member be guilty of bad professional work.
Sixthly, work is often reserved to a profession by statute —not because it was for the advantage of the members but because, for the protection of the public, it should be carried out only by persons with the requisite training, standards and disciplines. Seventh, the governing body must satisfy itself that there is fair and open competition in the practice of the profession so that the public are not at risk of being exploited. It follows that members in practice must give information to the public about their experience, competence, capacity to do the work and the fees payable.
Eighth, the members of the profession, whether in practice or in employment, must be independent in thought and outlook. They must be willing to speak their minds without fear or favour. They must not allow themselves to be put under the control or dominance of any person or organisation which could impair that independence. Ninth, in its specific field of learning a profession must give leadership to the public it serves.
It is one thing to define the obligations, it is another to see that they are observed. It is an unending battle for the members of my profession and its governing body to see that its 100,000 members observe those obligations at all times. There will never be perfection but the striving is there.
For my part I believe that on the whole the professions in this country have served the public well. I have only one reservation on that point. But as far as I know all of them seek to improve their standards year by year; to tighten their disciplines and to give better service to the public. The one reservation that I have is that in recent years I believe that some professions have paid too much attention to marketing themselves and selling themselves to the public.
That has been exacerbated—in fact it has been to some extent caused—by the doctrine of government which, as far as I can detect, regards the professions as an undesirable monopoly which must be broken open. These two factors together are unfortunate. I believe that they have damaged the image of the professions. Some of the members have fallen below the standard of professionalism which is necessary for the conduct of their profession. In short, some of the nine obligations are at risk.
If there is time I should like to mention five other subjects. The first is that I do not share the rosy views of the noble Viscount, Lord Ullswater, who in an earlier debate expressed great satisfaction with manufacturing industry in this country. For those who move in the inner circles of industry it is common ground that our manufacturing base is too small and has been diminishing for a long time. The average productivity in manufacturing is below that of our competitors. In that respect all the relevant professions, particularly my own and the numerous branches of the engineering profession, have something vital to contribute. All of them ought to 1210 concentrate on introducing a much higher standard of professionalism into the management of manufacturing industry than has been the case in the past.
The second point is one which I believe other noble Lords have mentioned tonight. I believe that a professional body, provided it observes the obligations which I have mentioned, should be self-regulating. In my experience the members who are engaged in the cut and thrust of professional practice every day of their lives and in open competition are the persons best fitted to set the standards for the profession and to see that they are observed by all of them.
The third point is that in my view all the professions should be guided by written standards. Several professions have not gone far enough in that respect. I believe that they should close the gaps in their armament. My own has been fairly active in that and has done a good deal. But it is an unending road—we shall never reach the end of it. We have been fortunate in that we have been able to establish an international code of accounting standards. That is a good step forward. It has been a help in assisting international finance and trade.
The fourth point is that everybody makes mistakes and the professions are not free of that. Errors of judgment arise, as does negligence in varying degrees of severity. Negligence must be punished. Of that I have no doubt. But the country is now developing into a litigious society and whenever there is a breath of an error of judgment or negligence actions for damages are immediately launched. Usually they are launched against the professions if they possibly can be because it is known that we are covered by insurance for the most part. These claims have become so extravagant and the legal cost involved in dealing with them so enormous that I believe that in due time they will have to be restricted by statute. If that does not happen we shall not be able to recruit into the professions the quality of person whom we want. Already America has found that it is unable to recruit in some professions for the reasons which I have just given.
The last point is this: I believe that in every profession the citizens should be allowed to join irrespective of colour, creed, class or money. Several of the professions have not been able to achieve that. I believe that they should direct their attention to it very carefully. We have only one bar in my profession and that is this: the standards we set require a certain quality of intellect before a member can join. He must also be subjected to a proper educational and training standard which we have defined. We can do nothing about intellectual capacity because that is a matter for nature. But the training and education which are needed, not for our benefit but for that of the public before we can admit anybody to a profession, must be dealt with in the schools and universities. We have found grave defects in some of those fields which prevent members of the public from joining our profession. We have had a wearying afternoon and my time is up. I shall leave the matter there.
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