Corporate governance - "It stands to reason".

(From Financial Director)

Byline: Robert Bruce, a leading commentator on accountancy issues.

There is an assumption that accountants will always insist that their heads will rule their hearts when it comes to policy or decisions. The perennial exception to this rule is the failures of the six major UK accounting bodies to manage a merger between themselves. The vast majority of financial directors are trained by the bodies, but the accumulated wisdom and ability of mature financial directors never seems to come to the top when mergers are mooted. There is an inexorable logic to the notion that fewer than six competing bodies would serve the overall profession better. It should be somewhat cheaper as well.

But time and again whenever mergers are proposed they tend to founder and, in the end, it is down to the assumption that the logic of the proposals will be unanswerable. As the unruly hero of the 'William' books always used to say when asked to justify his latest escapade: "It stands to reason". Last year, when I was researching the book celebrating the 150th anniversary of ICAS (Institute of Chartered Accountants of Scotland), I found definitive evidence in the archives. On the 19 January 1900 a past-president of the Scots accountants spoke at the annual London dinner and referred to the illogicality of having separate accounting bodies within Scotland and across the border in England as well as different frameworks to the legal professions. The account of his speech concluded: "The present diversity was an absurdity, which he ventured to say would, before the close of the twentieth century, have passed away".

Well, here we are, around 105 years later and the diversity and the absurdity has not been resolved. The present efforts to pull together the ICAEW, CIPFA, the public sector accounting body and CIMA, the management accounting body, look to have foundered. Meanwhile, ICAS, the Irish ICA and ACCA, the certified accountants, look on. If anything, the absurdity is getting worse.

The reasons why this is so are many. But fundamentally, it is the heart over the head. In 1965, a comprehensive effort at merger of all six bodies was made. The problems, the then secretary of ICAS Victor McDougall, later said, "were found to be almost awe-inspiring in their complexity". With hindsight he reported that: "One should not be surprised that the resulting plans were complicated, largely misunderstood by members generally, and a failure."

His words should probably now be emblazoned above the desks of all chief executives of accounting bodies. Since that effort forty years ago no one has attempted to put all six bodies together, however logical that might seem. But that has not stopped people trying. A sensible framework was established in 1989 for a merger of the English and Scottish ICAs. But that, despite offering the Scots enormous advantages, was voted down by the Scots.