AN INTERESTING VIEW

This week the AFR contained a story relating to independent reports and a comment by the Commonwealth Auditor-General that was made to a parliamentary Committee that “his organisation would rarely consider external advice purchased from consultants ‘independent’”.   I must say that in my experience within my own industry many of the situations where change has been sought on the basis of independence, it has oft had to do with finding someone who will support the view of the applicant rather than an absolute and genuine need for independence.

Many large organisations, and government departments are no different and create lists of preferred advisors or consultants and it is from this limited, or controlled, pool that most advice is obtained.  On the one hand the argument may well be that the quality or professionalism can be better guaranteed, but correspondingly what must also be considered is the willingness to form the answer to suit the need.  An example of this also recently hitting the same tome that involved an unfair dismissal claim for the firm concerned in the provision of external advice.

To properly understand any situation any business operator must harness the broadest of knowledge, involvement in professional bodies, attendance at forums and conversations with relevant experts outside of the normal inner sanctum of advisers will offer the greatest protection against error or misdirection.  One of the common themes continually raised with problems within the insolvency industry has been brought about by extremely close relationships between a small group of players, all operating on a common pool of advice and guidance.

Every now and then the stupidity of the situation raises to the surface, one that quickly comes to mind was a point raised by Chris Jordan, Commissioner of Taxation in an after dinner speech where he had identified swags of unnecessary rules, one was a policy that related to the provision of shade for staff operating on ranges, I recognised it immediately, it was written for Defence after an unfortunate dehydration issue on a weapons range.  The one size fits all mentality is rampant amongst closed circles.

Another and external example was when an organisation I was dealing with was provided with a list of recommended auditors and they were seeking my input on the selection of one.  To my amazement the listing included three notable and predictable insolvency firms that are not necessarily known for their auditing prowess!

If you do go out to get independent advice then be aware that you just may not get the answer you wanted, thus be sure that you asked for it early enough so that you can modify your plans for success; rather than having asked for the answer you want and thus being supported in failure.

I remember at university one of the lecturers taught it as: – “an increasing investment in a failing course of action”.