Lack of oversight raises ‘potential for harm’ in consulting sector
Senator Deborah O’Neill has highlighted concerns about a lack of regulatory oversight over the growing consulting services sector as part of the inquiry into consulting services.
The absence of a regulatory bodies and professionals bodies overseeing the consultancy sectors presents major issues around professionalism and accountability, Senator O’Neill has said as part of the inquiry into consulting services.
Ms O’Neill said there was great professionalism and responsibility required by consultants, particularly those dealing in areas such as technology, given the huge knowledge gap between clients and the consultants providing services.
“Where is the accreditation of these people who have this incredible power? Have we got a problem with a failure to have any regulatory oversight of the burgeoning consultancy sector,” Senator ‘l said in the hearing held yesterday.
“There’s no regulatory oversight for the [consulting industry] overall. There’s not even a body for enterprise management or one for data scientists or for cyber specialist ones. There’s not even discrete ones let alone a [regulatory body] that looks over the whole lot in one go,” she said.
Senator O’Neill said it was difficult to determine if consultants are behaving professionally when they don’t actually belong to a profession that is managed in a way that ensures integrity.
Consultants working in areas such data and AI and the transformation of businesses have “incredible power” and have the potential to “great good or great harm”, she said.
In addressing the inquiry, consulting services firm Accenture acknowledged that there was no singular regulatory authority that would audit or provide oversight over a consulting firm’s adherence to a business code of ethics.
“We are still accountable to all the laws of the country and ASIC and then to a global publicly listed company which holds a very high standard,” said Accenture market unit lead, Australia and New Zealand, Peter Burns.
Senator O’Neill noted in the case of PwC, the tax practitioners involved did in fact have entities to whom they were accountable but failed to engage with.
“They also had all of the window dressing, they had all of the ethics language, they had everything up on display for almost like a mirror to put out for the world because that was what was required to be seen,” she said.
“Behind the scenes there was something else going on entirely. So even when the systems are in place that can be failures, but for this whole consultancy sector, there are no professional bodies overseeing the consultancy sector.”
The absence of a professional body for the consulting sector also creates issues where individuals have been dismissed for workplace bullying or sexual harassment as there is nowhere to report this information where the consultant is not professionally registered anywhere, said Ms O’Neill.
“If the Federal Government is discerning who they should engage with and wanted to assess the ethical dimensions of an entity, the only way they could do that is by relying on the attestation [of that entity],” said Ms O’Neill.
“There is no uniformity about what needs to be disclosed and the place in which disclosure should be made about particular individuals who engage in workplace behaviours that could be considered unethical, or dangerous with exception of criminal activities.”
Ms O’Neill said there needs to be a commonality of what is required in terms of disclosures regardless of the shape and nature of each firm.
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