Proposed changes to the Institute’s Disciplinary Scheme

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In this article, John Trowbridge, Convenor of the Disciplinary Scheme Review Committee and Past President of the Institute, outlines the proposed changes to the Disciplinary Scheme and why they are important to the profession.

The Case for Change

The Institute’s Disciplinary Scheme is a crucial component of self-regulation and is one of the cornerstones of a strong professional body.   Governments and the community expect a disciplinary scheme characterised by:

  • public interest as the primary focus;
  • independence and fairness;
  • transparency and efficiency;
  • transparency includes publication of outcomes; and
  • efficiency includes expeditious resolution of complaints.

The Institute’s current Disciplinary Scheme falls short on these criteria.  The proposed new Scheme Rules are designed to deliver these features.

Key Features of the proposed new Scheme

  • The main structure of the Scheme is unchanged – see diagram below.
  • Principles-based scheme to complement the Code of Conduct.
  • Independence from Council and other parts of the Institute.
  • Scheme to be separated from the Constitution.
  • Covers all conduct - professional and personal.
  • Self-disclosure.
  • External (non-actuary) participants on each body (Conduct Committee, Tribunal and Appeal Board).
  • Public communication of the outcomes with reasons for decisions.
  • Limited terms for members of Conduct Committee, Tribunal Panel and Appeal Board Panel (two terms of up to five years).

Background

The current Scheme was introduced in 2006. Given the passage of time, Council decided that there was a governance-related case for considering a review of the Scheme. The current Scheme is part of the Institute’s Constitution and therefore requires member approval to change it.  In June 2016, Council agreed to review the Scheme in two stages:

  • agree on the terms of reference [which happened at the September 2016 Council meeting]; and
  • review the Scheme itself.

The review has been undertaken by a Committee of Institute members and an external legal adviser who have considered the current Scheme against changing expectations of professional self-regulation by government and the community, comparable schemes and trends in self-regulation in Australia and overseas and some recognised shortcomings in the current Scheme.

The Disciplinary Scheme Review Committee (DSRC) comprises a diverse and senior group of Fellows and others: John Trowbridge (Convenor), David Bell (and more recently Elayne Grace), Narelle Bell (external lawyer), Caroline Bennet, Briallen Cummings, Rob Daly, David Knox and Peter Martin. 
The Committee has interacted cooperatively with the Code of Professional Conduct Review Taskforce, chaired by Rob Daly.

Member Consultation

In September 2017, an Initial Consultation Paper was issued making a series of recommendations for modifying the existing scheme. There were eight responses from members.  A revised set of scheme rules was then drafted by the Institute’s lawyers on instructions from the DSRC.  The proposed new scheme rules were issued to members for consultation in January 2018.  Once again there were eight responses all from senior members of the profession, and two from Council members.  Overall these responses were supportive of the proposed direction but raised several points of detail for clarification or amendment that have been considered, and in many cases utilised in refining the proposed scheme rules put to Council at its meeting on 5 March 2018. 

Council

Discussion on the scheme rules at the 5 March Council Meeting included covering the scope of misconduct, when the CEO and Council will be informed on a complaint and CEO delegation of authority. Council requested that further information be provided by the DSRC on some of the issues raised before the resolution was put to a vote.  A meeting was subsequently arranged for 16 March with the DSRC and concerned Council members, to facilitate a greater understanding of why the scheme rules are structured as they are, how the Scheme compares to other best practice schemes and to deal with the concerns raised. Following this, on 13 April 2018 Council resolved via circular resolution that:

  • The revised Disciplinary Scheme rules be approved and incorporated as resolution 3 in the “Constitution Review Explanatory Memorandum”; and,
  • be placed before Members as an annexure to the “Notice of 2018 Annual General Meeting” detailing special resolution 2(c) and subsequently removed by special resolution 2(d).

As members would be aware, Council subsequently withdrew all special resolutions from the AGM held on 22 May 2018.  Resolutions will now be put to members at the upcoming Extraordinary General Meeting (date to be confirmed).

Next steps

Further discussion will now be held at the Insights session on Friday 22 June.  Members can register to attend in person or participate via webinar.  I encourage you to attend this session to ensure you are fully informed on the proposed changes.  Revised resolutions will then be put to members at the upcoming Extraordinary General Meeting (date to be confirmed).

While the Scheme Review Committee appreciates that the decision to make these changes will require the support of 75% at the Extraordinary General Meeting, it considers them to be changes worth making as an investment in the effectiveness of the Institute’s Disciplinary Scheme. As noted above, such a scheme is a crucial component of the profession’s self-regulation.

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About the author

John Trowbridge

John Trowbridge is the Convenor of the Disciplinary Scheme Review Committee and was President of the Actuaries Institute in 1998.

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