Equitable appointments code concedes to reality

This week the Turnaround Management Association (TMA) launched its Voluntary Code for Equitable Insolvency & Restructuring Appointments (EIRA) – with some fanfare if Linked In is any guide – but like many well intentioned initiatives, reality’s reception was mixed.

The ERIA code is modelled on the Law Council of Australia’s Equitable Briefing Policy for barristers and aims to get more of the scant minority of female registered liquidators (RegLiqs) appointed on large formal administrations, particularly when three or more RegLiqs are appointed.

“While the TMA would expect firms or organisations adopting the EIRA to monitor their compliance internally, it is not proposed that there be actual reporting undertaken of compliance with the EIRA.” Turnaround Management Association of Australia.

Pictures were posted on Linked In by FTI Consulting showing its head of restructuring John Park hunched over a table, signing on to the voluntary code.

TMA chair and ClaytonUtz restructuring and insolvency guru Maria O’Brien lauded FTI for its “moral leadership”, along with that shown by other early signatories including Allegro Funds, Clayton Utz, McGrathNicol, Hamilton Locke, Houlihan Lokey, KPMG, Pickles Auctions, Ashurst, Wexted Advisors and Grant Thornton.

Signing up to a voluntary code however is far easier than ensuring that a large appointment won by someone in your firm will have at least one female appointee among the three or more RegLiqs from your firm. Just ask McGrathNicol.

Yesterday’s insolvency appointments lists reveal that McGrathNicol’s Anthony Connelly, Mark Holland and Jamie Harris were appointed voluntary administrators of NDIS housing provider Eternus Group.

Three appointees but none of them bearing the requisite chromosomal arrangement making this appointment EIRA code compliant.

But then Eternus is Queensland based. So are the three appointees. If McGrathNicol doesn’t have a female RegLiq based in Queensland what benefit would there be for creditors in say appointing Kathy Sozou, the firm’s Sydney-based female RegLiq?

We doubt however that O’Brien will be calling TMA vice president and McGrathNicol managing partner Jason Preston to lament the poor look.

The code’s drafters were clearly aware of moral leadership’s limitations in the face of practical reality, as evidenced by the code’s final two paragraphs.

“The ultimate choice of appointees or advisers is of course made by the principal, and compliance with the EIRA is not intended in any way to undermine client autonomy, compliance with client directives or duties to clients,” the code states.

“While the TMA would expect firms or organisations adopting the EIRA to monitor their compliance internally, it is not proposed that there be actual reporting undertaken of compliance with the EIRA.”