Communication, disclosure and power games: a figurational approach to understanding CPA Australia's corporate governance scandal

2.1 Crisis management and corporate scandals

Crisis management is a growing, fragmented research field (Bundy et al., 2017). Strategy, organisational theory and organisational behaviour researchers address crises from internal or external perspectives. The internal perspective examines organisational structures and coordination efforts to prevent corporate crises, reduce their impact and learn from the aftermath. The external perspective analyses the interactions with an organisation's stakeholders to avoid, limit and bounce back from a crisis. To date, these research strands have evolved in a way that is largely independent of the other. However, there is room for fruitful research that adopts an integrative approach. For example, it may be highly worthwhile to “explore the real-time discourse and information exchange that occurs between an organization and its stakeholders as they make sense of a crisis” (Bundy et al., 2017, p. 22).

Organisational, management and accounting researchers see organisational crises as highly salient, unexpected and potentially disruptive events that can undermine the organisation's relationships with its stakeholders and hinder its ability to pursue its strategy and achieve its goals (Bundy et al., 2017). Corporate crises might originate from data breaches, accounting frauds, product failures, corruption, environmental incidents and deadly accidents, often ending in legal proceedings (Akbar and Deegan, 2021; Belluci et al., 2021; Blanc et al., 2019; Corazza et al., 2020). However, in some cases, corporate crises do not imply illegal activity. Rather, they simply involve behaviour that goes against accepted social values (Coombs and Holladay, 2023). Therefore, corporate crises are infrequent events with a high potential to negatively affect how an organisation is framed by and interacts with its stakeholders (Bundy et al., 2017).

Organisational crises usually follow three stages: pre-crisis prevention, crisis management and post-crisis outcomes (Bundy et al., 2017; Coombs and Laufer, 2018). Organisations engage with stakeholders and set up internal procedures during crisis prevention to prepare for and reduce the likelihood of a crisis. When a crisis does occur, organisations enter crisis management and try to fix the root cause, allocate responsibility and manage stakeholder perceptions (Belluci et al., 2021; Blanc et al., 2019; Brändström and Kuipers, 2003; Coombs and Laufer, 2018). Post-crisis, organisations can learn from their mistakes, repair their broken reputation, regain trust and restore legitimacy (Belluci et al., 2021; Blanc et al., 2019; Bundy et al., 2017; Coombs and Holladay, 2023). These three stages have overlapping boundaries since post-crisis outcomes such as organisational learning might begin even when the crisis is still at its peak. However, research mainly focuses on one of the three stages, with post-crisis being the least researched (Coombs and Laufer, 2018).

Scandals are crises characterised by intensive media coverage, strong moral outrage and calls for an organisation's punishment (Coombs, 2007). A consequence of distinguishing between crises and scandals is that “the moral component of scandals demands we focus on the managers and not the organization itself because the managers, not the organization, commit the moral violations” (Coombs and Tachkova, 2019, p. 73). However, the individuals in an organisation do not operate in a vacuum. Rather, they are interwoven in relationships and power structures that give boundaries to their evolving actions. Even if the individuals ultimately take action, they can only act thanks to the network of relationships that empower them and grant them agency (Elias, 1978; Latour, 1986). Crisis management researchers have been calling for more research on how power and power differentials may impact stakeholders' ability to respond to a crisis and how interactions among individuals, groups, organisations and institutions influence crises and crisis management (Bundy et al., 2017; Coombs and Holladay, 2023).

Section 2.2 explores the potential role of voluntary, involuntary and absent disclosures in crises and scandals. Specifically, we explore the role of communication and disclosure in reinforcing and countering powerful figurations.

2.2 Crisis communication and disclosure

Regarding financial and non-financial information, three kinds of disclosures can trigger a crisis: voluntary, involuntary and absent disclosures. Organisations often disclose information voluntarily to build reputation, legitimacy and trust (Coombs and Holladay, 2023; Corazza et al., 2020; Ulmer et al., 2019). They also communicate with stakeholders “to reduce the likelihood of a crisis, work to minimize harm from a crisis, and endeavour to re-establish order following a crisis” (Bundy et al., 2017, p. 3). If a crisis does erupt, the first (ethical) responses from the organisation are usually based on taking individual or collective responsibility and addressing the physical and psychological concerns of the parties affected (Edgar et al., 2022; Shrives and Brennan, 2017; Ulmer et al., 2019). However, organisations do not always take responsibility immediately after the crisis. Instead, they may be forced to do so due to pressure from their stakeholders and the media (Andon and Free, 2014; Coombs and Tachkova, 2019). Then, organisational communication generally involves coordinating with stakeholders, shaping their perceptions and managing their impressions (Andon and Free, 2012; Bundy et al., 2017; Belluci et al., 2021; Edgar et al., 2022). Voluntary disclosure, therefore, becomes a response strategy to ease stakeholder pressure on the organisation and channel the crisis towards its solution (Akbar and Deegan, 2021; Belluci et al., 2021; Corazza et al., 2020).

Involuntary disclosure refers to information uncovered by stakeholders that is not willingly disclosed by an organisation. Such information may also trigger a crisis (Andrew and Baker, 2020; Dumay and Guthrie, 2017). For example, the media triggered the National Rugby League's Melbourne Storm scandal over salary caps by providing details of anomalous invoices and player contracts (Andon and Free, 2012, 2014). In the Northern Rock Bank case, the BBC News disclosed that the bank had asked for emergency financial support, which triggered the crisis that led to nationalising the bank (Liff and Wahlström, 2018). Moreover, counter-accounting research shows how groups of people use different reporting and disclosure tools, like social networks, TV and newspapers, to produce financial, non-financial, qualitative and quantitative information that allows stakeholders to make economic, moral and political decisions (Perkiss et al., 2020; Vinnari and Laine, 2017). Therefore, many groups use communication channels beyond traditional corporate reporting to construct a common agency and alternate representations of reality (Couldry and Hepp, 2017).

The absent disclosure can also be a source of crisis (Firoozi and Ku, 2023; Merkl-Davies and Brennan, 2017) because stakeholders are left alone to fill the void of information with their interpretations (Firoozi and Ku, 2023). And, once an interpretation crystallises, organisations might be unable to overcome it (Firoozi and Ku, 2023). Withholding information and not disclosing it upon request can also be a deliberate concealment strategy that organisations use to deny responsibility, distance themselves from negative outcomes, control the flow of information or conform to a “no comment” strategy (Belluci et al., 2021; Corazza et al., 2020; Firoozi and Ku, 2023; Shrives and Brennan, 2017). Alternatively, not disclosing information can be due to an unconscious bias where organisations underplay, neglect or do not know the information's importance to stakeholders (Coombs and Holladay, 2023; Corazza et al., 2020; Edgar et al., 2022). Identifying and studying the absence of information is not trivial. However, it does offer an interesting take on how a crisis might originate and transform into a broader corporate scandal (Firoozi and Ku, 2023; Merkl-Davies and Brennan, 2017).

Research on communication during crises and scandals falls short of tackling the issue of how and to what extent information is disclosed or concealed by those in power and those opposing the status quo. According to the symbolic-interpretive tradition, powerful individuals in organisations often imbue framing, rituals and masking with rhetoric that portrays a business-as-usual reality that runs counter to a behind-the-scenes reality to control the narrative and avoid conflict (Edgar et al., 2022; Merkl-Davies and Brennan, 2017). However, in the functionalist-behavioural tradition, information is a one-directional communication tool for achieving economic, social or political goals and exerting control (Merkl-Davies and Brennan, 2017).

While research has explored how powerful individuals and organisations strategically disclose information to distance themselves from a crisis, seek legitimacy, convey accountability or ensure that stakeholders buy the actors' decisions, less is known about how stakeholders strategically communicate to oppose the status quo (Andon and Free, 2014; Tregidga, 2017; Akbar and Deegan, 2021). Power differentials between an organisation and its stakeholders may constrain how stakeholders learn about and respond to crisis events. However, more research is needed to unravel how such constraints, if any, might be resisted and overcome (Belluci et al., 2021; Bundy et al., 2017; Merkl-Davies and Brennan, 2017; Perkiss et al., 2020).

We, therefore, formulate the following research question to inform our study.

3.1 Norbert Elias' figurational sociology and ANT: common premises

Organisations are not monolithic actors seeking legitimacy from a unified society in a one-to-one relationship. Instead, they resemble webs of functionally interdependent people interacting and measuring their relative strength to achieve their goals (Elias, 1978). These webs of interdependent people are referred to as figurations (Connolly and Dolan, 2012; Latour, 2005). Figurations comprise three elements: relevance-frames, actor-constellations and communicative practices (Couldry and Hepp, 2017). Relevance-frames represent the figuration's social meaning as expressed by the common orientation of its constituents towards a shared purpose. Actor-constellations represent arrangements of roles and relationships that actors have in the figuration, which is not a random accumulation of individuals. Communicative practices involve media ensembles and interrelated actions through which individuals coordinate, do certain things together and contribute to the overall meaning of the figuration (Couldry and Hepp, 2017). Figurations compose the operating environment in which the organisation operates and with which the organisation interacts. Organisations, internal and external stakeholder groups, the press and local communities can be modelled as actor networks negotiating and pursuing shared or opposing purposes and agendas (Gooneratne and Hoque, 2021).

Elias' (1978, 1984) figurational approach and Latour's (2005) actor–network theory share many similarities. Both theories see reality as a process. Both go beyond the structure–agent dichotomy to theorise agency as distributed across interdependent actors. Additionally, both are useful for analysing webs of interdependent actors (i.e. networks and figurations), where boundaries are considered to result from interactions between actors. Both also recognise these interactions as tight and loose relationships (Newton, 1999, 2001, 2002). However, figuration theory provides a useful conceptualisation of dynamic and collective power and how communication can be used in power games to augment actor–network theory's take on power. The benefits of using the figuration approach for our analysis are discussed next.

3.2 Collective and dynamic power: the power games

In both actor–network and figurational theory, power is not something that one can possess or hoard (Elias, 1978; Latour, 1986). Instead, it is made whenever actors attribute their actions to one among them; that person or entity becomes powerful (Latour, 1986). Latour (1986) distinguishes between power in actu and in potentia. Power in actu manifests whenever an actor exerts power and makes others perform actions. Power in potentia is the initial condition of having power in actu since actors attribute their actions to the one entitled enough to exert such power:

Power over something or someone is a composition made by many people […] and attributed to one of them. (Latour, 1986, p. 265)

If power is not something you can hoard or possess, it is something that has to be made. Who will make it? Others, by definition […]. These others, the only ones who are really powerful (in actu), therefore have to attribute their action to one amongst them who becomes powerful in potentia. (Latour, 1986, p. 274)

While for Latour (1986), a powerful actor is someone or something able to secure others' actions through enrolment, enlistment and conviction, Elias (1978) talks about groups of people playing trials of strength as a power game. Such trials of strength are a two-person game where each player tries to increase control over the other. The power game can also be played as one-vs-many when an individual seeks to increase control over others who cannot cooperate. However, the trial of strength gets complicated when an actor faces opponents that can form coalitions, and even more complex when coalitions play against other coalitions to increase their “power to withhold from each other such elementary requirements as that of preserving their physical and social integrity, and ultimately of survival” (Elias, 1978, p. 78). Multi-person, multi-level power games make “the figuration, development and direction of the game […] more and more opaque to the individual player” so that understanding the power in actu and in potentia of an actor becomes almost impossible (Elias, 1978, p. 85). Such a collective dimension of power is evident in co-operations and conflicts between managers and employees, an organisation and the media, political parties and the government and allied nations and enemies (Connolly and Dolan, 2012; Dopson, 2001).

Similar to how power is conceptualised in actor–network theory, the figurational approach maintains that power is a structural characteristic within the game of all human relationships. This naturally implies that actors are immersed in webs of functional interdependencies characterised by fluid balances of power (Dopson, 2001; Elias, 1978). Such a fluid characteristic of power implies that the participants always have, some control over each other though in considerably varying degrees (Elias, 1978). It also becomes possible to understand “the course of the game largely in terms of the goals and plans of the stronger player” (Dopson, 2001, p. 519). As the game's complexity increases, involving multiple people and layers, “the course of the game becomes increasingly unpredictable and increasingly beyond the ability of any single individual or group of players to control” (Dopson, 2005, p. 1134). It follows that the power in potentia of actors and figurations at a certain moment is seldom the same in the following moment since a changing balance of power – a power ratio – emerges from the interaction (Dopson, 2001). We refer to this ever-changing dimension of power as “power in fieri”. As Connolly and Dolan (2012, p. 492) note, power in fieri can explain organisational and societal change:

It is the shifting dependencies (and the changes in power and identity connected with this) between those individuals/groups at an intraorganizational level, between those at inter-organizational level, and between social groups on a higher level of integration and competition, and the overlapping and intertwining of these that explains the type and degree of organizational change.

3.3 Communication and media in figurations

Communication practices and media are constitutive elements of figurations (Couldry and Hepp, 2017). Communication and media channels enable coordination among actors, contribute to the overall meaning of the figuration, support the pursuit of shared goals and influence power balances (Couldry and Hepp, 2017). Communication devices and inscriptions can be mobilised to gain support and persuade, which actors can use to strengthen their bonds in a network, reinforce power ties (Callon, 1986; Latour, 1986), and project control to distant places (Law, 1986b). This way, corporate reports, statements, articles, emails and posts become instruments, tools and tricks for enrolling actors (Callon, 1986; Law, 1986a). Hence, the constitutive role of communication comes from making connections among people possible (Couldry and Hepp, 2017; Hepp and Hasebrink, 2014).

Couldry and Hepp (2017) argue that figurations use media and communication to construct their common agency and representation of reality. For example, groups of stakeholders and activists use social networks, TV and newspapers to produce and disseminate financial, non-financial, qualitative and quantitative information that allows stakeholders to make economic, moral and political decisions as well as counter mainstream, hegemonic narratives (Perkiss et al., 2020; Vinnari and Laine, 2017). Organisations, campaigners and activists are figurations – or figurations of figurations (Couldry and Hepp, 2017) – characterised by “patterns of processes of communicative interweaving” (Hepp, 2013, p. 93). According to Couldry and Hepp (2017), communication channels significantly impact organisations because they construct shared meanings and identity. They also transform organisational processes by making new networks possible.

We argue that analysing the role of media and communication in power games may help expand the research on voluntary, involuntary and absent disclosures. Indeed, figurations extend beyond the traditionally conceived organisational boundaries to include different communication channels through which agency or a particular representation of reality is constructed (Connolly and Dolan, 2012; Couldry and Hepp, 2017). Also, the communications media can alter power imbalances by making interactions with previously distant actors feasible, thus expanding the figurations by forming coalitions (Hepp and Hasebrink, 2014). We believe that augmenting classic actor–network theory with both the dynamic and collective take on power and the constitutive role of communication from the figuration approach may help us to understand how actors use (and/or conceal) disclosures to win the power game by shifting the balance to their favour.

4.1 Data sources

CPAA has a considerable tradition of reporting. From 2008 to 2010, CPAA published three sustainability reports alongside just as many annual reports. This choice reflects a willingness of CPAA to respond to the beliefs of its members that sustainability concerns are strategic to the organisation and its members. In 2011, CPAA stopped issuing a separate sustainability report and combined its “existing corporate and sustainability reports – with aspirations for the mid-term to produce a report that recognises the wider range of issues and how they connect and interact to create value” (AR2011, p. 2). From 2013, CPAA began to issue integrated reports aimed at “provid[ing] readers with a comprehensive picture of how CPAA has created value through its business model” and “play[ing] a pivotal role in ensuring that integrated thinking on the capitals […] feeds into business management and reporting” (IR2013, p. 1). CPAA has continued to issue integrated reports ever since, with the latest publicly available report being issued in 2022.

In addition to the IIRC's (2021) IR framework, CPAA follows four additional frameworks for reporting (CPAA, 2021c): the Australian Accounting Standards Board's accounting standards, the Australian Stock Exchange Corporate Governance Council's Corporate Governance Principles and Recommendations, the Workplace Gender Equality Act 2012's (WGEA, 2021) gender equality report and the Global Reporting Initiative (GRI) standards for sustainability reporting. It is worth highlighting that CPAA goes beyond compulsory disclosure because the Corporate Governance Principles and Recommendations, the GRI standards and the IR framework are frameworks that CPAA adopts without being obliged to do so. Lastly, not only does CPAA adopt the IIRC's (2021) IR framework to produce its integrated report, but it is also a member of the IIRC's business network. This network brings together worldwide organisations committed to integrated thinking, strategy and reporting. Therefore, CPAA's membership signals its commitment to embracing integrated thinking and demonstrates that it is at the fore of contemporary corporate reporting practice (CPAA, 2021c).

Our research builds mainly on CPAA's integrated reports because these integrated reports bring together information from the other frameworks. The overall integrated reports contain CPAA's financial report, a section dedicated to corporate governance, information on workforce diversity and a GRI index. We first collected CPAA's corporate reports to analyse the narrative conveyed by the CPAA establishment. These annual, sustainability and integrated reports were our primary data sources. Secondly, we used CPAA's website, press releases and the annual general meetings (AGM) minutes to corroborate relevant information (see Appendix 1). Lastly, we analysed the IRP's final report on the scandal. The IRP was instituted by the Board and acted on CPAA's issued terms of reference. Nonetheless, its members' independence and professional experience differentiate the IRP report from the CPAA data issued before the scandal. This diversity allowed us to see the CPAA story from a different angle.

In discussing these primary data sources, we acknowledge that scholars risk concentrating on a subset of narratives that privilege the view of top management by focusing only on corporate material (Corazza et al., 2020). In turn, this downplays the ability of alternative narratives to enforce pluralism and mobilise change (Vaara et al., 2016). To offset this risk, we broadened our data collection beyond CPAA, collecting news articles to understand the point of view of other relevant figurations (Perkiss et al., 2020).

We relied on the Dow Jones' global news monitoring search engine, which is a Factiva database, to retrieve articles about CPAA from 1 Jan 2008 to 31 Dec 2019. Nothing from 2020 onwards was included in the sample since the COVID-19 pandemic captured most of the attention during this time, and including these disclosures would have shifted the scope of our research. Our research focuses mainly on the governance scandal that exploded in 2017. Therefore, we restricted the search to the keywords “CPA Australia” and “governance”, obtaining 464 hits, which captured most of the themes in the media surge surrounding CPAA's governance and the scandal. After eliminating duplicates and 10 articles that were simply CPAA's media releases already included in the corporate material, the candidate dataset comprised 246 useable articles. These articles were then analysed to understand whether they were relevant to our research aim. 110 articles did not refer to the governance scandal, so the final dataset was filtered down to 135 case articles (see Supplementary File). When using news articles as a data source, we acknowledge the risk of big organisations capturing the news and influencing the press's agenda (Herman and Chomsky, 2002; Perkiss et al., 2020). However, this risk was mitigated because, in our case, the press acted as a figuration opposing the CPAA establishment and did not spare criticism towards CPAA's Board and top management.

From the news articles, we were able to reconstruct the communication and coordination channels used by the concerned members: emails, social media and websites. Unfortunately, we were not able to directly access these channels, with a few notable exceptions, such as www.jendalitz.com/cpaboardspill/ (accessed 09/08/2021). Nevertheless, the press gave considerable coverage of the emails, social media and websites allowing us to have a fair understanding of their content. Moreover, the press conveyed the opinions of the concerned members directly through interviews and releases. This allowed us to reconstruct the positions and demands of concerned members.

4.2 Content analysis

We followed a three-step procedure to infer relevant meaning from the text (Steenkamp and Northcott, 2007). Firstly, we manually read all 135 articles to construct a timeline of events. We triangulated relevant events found in each article – directors' appointments and resignations, emails sent, investigations underway, issue of reports and so forth – with information from other articles, corporate reports, IRP reports and the CPAA website. For constructing the timeline, we considered as relevant and valid events only those reported at least by two sources. This step gave us a clear overview of the CPAA scandal's timeline, and based on this analysis, we divided the crisis into three timeframes: before the scandal (2006–2016), during the scandal (early 2017) and after the scandal (late 2017–2019).

Further, we manually coded CPAA corporate reports to understand how CPAA voluntary reporting developed (Table 1). CPAA reports were read in their entirety to uncover thematic changes across the years. We flagged the changes in the reports' main chapters, whether present or only partially present, starting from the 2008 annual and sustainability reports.

In the second step, we used NVivo12's word count functionality to identify changes in relevant themes over the years and corroborate the insights gleaned from the manual coding (Woolf and Silver, 2018). We uploaded a PDF or an MS Word file for each data source. NVivo returns the most frequent words appearing in the file – or a group of files as an objective form of content analysis (Smith and Taffler, 2000; Steenkamp and Northcott, 2007). We ran the analysis, extracting the top 30 words used in the different data sources and examined the lists to spot any relevant differences. As an example of the differences, we found, in IR 2016, words such as engage, director, review and governance did not appear in the top 30, but they did in 2017, while the term strategy did not appear until 2018. These first two steps led us to identify four main themes and the changes within them over time: strategy, remuneration, governance and engagement.

The third methodological step was to analyse the case study data following the four themes identified in the previous steps. Again, we used manual coding and NVivo – specifically, its word tree functionality. Word trees “display the searched-for word as a tree, with branches representing the contexts within which the word occurs. The font size of the words in the branches indicates the frequency with which those words appear in close proximity to the searched-for word” (Woolf and Silver, 2018, p. 105). Therefore, word trees helped us determine whether a certain theme needed to be split into sub-themes. Once complete, the word tree analysis led us to divide the theme “strategy” into two sub-themes: “marketing strategy” and “CPAA Advice strategy”. This step is coherent with subjective meaning-oriented content analysis to infer the text's underlying meaning (Smith and Taffler, 2000; Steenkamp and Northcott, 2007).

5.1 CPAA before the scandal 2006–2016

In 2016, the year before the scandal, CPAA's Board had 12 members (IR2016). As shown in Appendix 2, the directors had different tenures spanning from 10 years for Petty and Wade to less than one year for Lang and Hourigan (IR2016). In 2009, the Board appointed Alex Malley as CEO, previously President of the Board, from 2007 to 2009 (IR2016). The Representative Council appointed the directors and a body representing the Divisional Councils and other “groups, bodies or committees established or recognised by the Board” (IRP2017, p. 22). That Board had “overall control and management of CPA Australia”, delegating some of its power to committees and management (IRP2017, p. 20).

Over the years, CPAA has used different communication channels to reach its stakeholders and promote its activities. For example, alongside traditional corporate reports, CPAA also produces a magazine – InTheBlack (https://www.intheblack.com/). From 2010, CPAA began following a marketing strategy centred on its CEO's persona to build brand awareness and stakeholder engagement (IRP2017). For example, in 2010, Malley hosted evoTV's 12-episode TV series, The Bottom Line (Fenton-Jones, 2010). In 2014, he published an autobiography titled The Naked CEO, promoted on billboards and signage in Times Square (New York City) and at Australian airports (IRP2017). In 2016, he hosted a talk show on the Nine Network called In Conversation with Alex Malley (https://www.imdb.com/title/tt6140980/), where he interviewed guests such as the former Mayor of New York City Rudy Giuliani, the violinist and conductor André Rieu, the actor and Happy Days' star Henry Winkler and the NASA astronaut Andy Thomas. It follows that while the corporate reports still aimed “to provide readers with a comprehensive picture of how CPA Australia has created value” (IR2016, p. 1), the other channels ended up exposing CPAA to financial and reputational risks by over-relying on the CEO's persona (IRP2017).

CPAA's communication strategy aligned with the Board's agenda to “maximise the share of people who want a career built on professional accounting skills” (IR2016, p. 3). CPAA pursued this goal through significant marketing activity – between 16% and 20% of its total turnover – centred on the CEO's persona to reach and secure future talents (COO2017; IRP2017). In a letter to members, the Chief Operating Officer further explained the CEO's role and the Board's decision to rely on his persona (COO2017):

With a view to sustaining market recognition and brand relevance, the Board made a conscious, strategic decision to focus on building the youth market and securing future talent. The chief executive was selected not just for his leadership skills but also for his ability to communicate to this vital audience and in the media more broadly. His ability to engage with the youth market through teaching and mentoring resulted in the development of The Naked CEO book and website (both of which are products of CPA Australia). […] The Naked CEO book and website and In Conversation support our strategy to attract new members, primarily in the youth market.

Therefore, the Board considered the marketing expenditures appropriate to achieving the strategic objectives of CPAA and increasing its brand awareness and recognition (IRP2017).

On 5 June 2015, CPAA announced its financial consulting arm – CPAA Advice – to provide “an independent licensing solution for CPAA members in public practice” (IR2016, p. 40). This choice was justified by the need to respond to failures in financial planning with “fit-for-purpose, independent and transparent advice to the Australian consumer” (IR2016, p. 22). Over the long term, the goal for CPAA Advice was to become a strategic business providing a “robust platform for [CPAA's] future growth”, and CPAA made “extensive work on the development of [CPAA Advice's] business structure, […] team, product offer and compliance regime” (IR2016, p. 40). CPAA Advice became fully operational on 1 July 2016 after receiving the green light from the Australian Securities and Investment Commission.

On 3 February 2016, scant criticism on the choice to establish CPAA Advice emerged. For example, King et al. (2016) reported that:

Members who spoke to the Financial Review on condition of anonymity raised questions about whether the spin-off was the best way to use members' money. However, some supported it. […] One of the key risks worrying members is reputational damage, like that suffered by Macquarie, ANZ, NAB and CBA, who fronted a Senate committee over financial planning scandals. [CPAA] declined to respond in detail to questions about how it would deal with non-compliance issues, reputation risk, its ratio of compliance managers to advisers, or the number of members who have expressed an interest in taking up the offer.

Moreover, The Australian Financial Review's journalists Aston and Glasgow (2016) openly criticised CPAA's marketing expenditures for promoting Malley's book. Therefore, latent crisis triggers were already there in 2016.

5.2 Scandal and capitulation of the board in early 2017

Overt criticism directed at CPAA's marketing expenditures, remuneration scheme, and strategy erupted in February 2017 with CPAA's member Brett Stevenson sending an email complaining about CPAA governance to another 1,000 members (Tadros, 2017d; Aston, 2018). This criticism was mainly sparked by two parties: a group of concerned CPAA members – called “rebels” by the press; and Fairfax Media's newspaper, The Australian Financial Review (The Sydney Morning Herald, 2018).

The [CPAA] push for transparency is effectively led by member Brett Stevenson, an accountant who has now set up an independent website in response to issues such as alleged censorship of an official [CPAA] forum on business networking site LinkedIn. “We have established a website – cpamembers.org – for members to freely discuss and communicate on some major concerns within our organisation,” Mr Stevenson said. (Tadros, 2017a)

The number of hits by keyword retrieved from the Factiva database indicates the rising outrage and the increased media coverage. In 2017, the keyword “CPAA” alone appeared in 453 articles, 198 of which also contained the keyword “governance”, a surge of 107% and 313% from 2016, respectively. Moreover, the concerned members built up consensus around their demands for more transparency on CPAA's marketing expenditures and executive compensations through emails to other members (Tadros, 2017d), social media and websites such as www.jendalitz.com/cpaboardspill/ (accessed 09/08/2021) and www.cpamembers.org (Aston and Corbett, 2017b). These two figurations – the press and the concerned members – were able to turn the spotlight onto a series of criticalities hitting the CPAA establishment (IRP2017).

Both figurations started their campaign by asking for more transparency from CPAA because information on remuneration schemes and marketing expenses was incomplete or absent (Tadros, 2017a). However, as time passed, the two figurations pushed for profound change at CPAA that should have started with spilling the Board and firing the CEO (The Australian Financial Review, 2017). Calls for the Board's renewal came from the press, especially The Australian Financial Review, and organised members calling themselves The Spillers (https://jendalitz.com/cpaboardspill/ accessed 09/08/2021). Therefore, these two figurations expanded their requests to cover five themes: CPAA's marketing strategy, executive remuneration scheme, governance mechanisms, member engagement strategy and CPAA Advice.

At the beginning of 2017, we observe an increasing number of press articles citing concerned members, their opinions and their actions for reaching out to other members. In fact, the press often acted as a sounding board for concerned members. For example, Brett Stevenson's name was cited 128 times in 39 articles, and the press often identified him as leading the campaign for more transparency and accountability at CPAA (Patrick and Tadros, 2017). As the scandal mounted, these two separate figurations – the concerned members and the press – formed a sort of coalition of communicative figurations by coalescing around the same communication channel: news articles (Couldry and Hepp, 2017). Through content analysis, we found that, in such articles, the concerned members and the press made similar requests. Therefore, we will present the findings relating to these two figurations together.

5.3 Late 2017–2019: restoring CPAA

6.1 Voluntary, involuntary and absent disclosure in crises

Before, during and after the scandal, the role of disclosure changed in type and relevance (Bundy et al., 2017; Coombs and Holladay, 2023; Corazza et al., 2020). In the pre-crisis stage, CPAA managed and maintained control over the narrative by voluntarily disclosing enough information to satisfy its members. It portrayed a behind-the-scenes reality of an organisation looking to go beyond simply reporting mandated disclosures to one that leads by example in the voluntary reporting landscape (Merkl-Davies and Brennan, 2017). As such, the old Board used sustainability reports, annual reports and eventually integrated reports to communicate its strategy for gaining new members and to highlight the organisation's achievements to its members. For example, two prominent achievements were a growing member base and increased brand recognition. Even though the disclosure content changed over the years, up to 2016, the overall voluntary disclosure strategy went almost unchallenged as the press acted mainly as CPAA's sounding board (Herman and Chomsky, 2002; Perkiss et al., 2020). However, in 2016, the establishment of CPAA Advice and the promotion of The Naked CEO and the In Conversation with Alex Malley TV series started to raise the eyebrows of a few vocal concerned members who began to put the actions of CPAA board under scrutiny.

We expand Firoozi and Ku's (2023), p. 28) argument that “lack of response may create a vacuum that lets the stakeholders frame the crisis as they wish” because the absence of disclosure can also be found in the pre-crisis stage and can become the trigger, not just the frame, of crises and scandals. Eventually, the spark that set the CPAA scandal afire was the absence of disclosure. It was the absence of information about remuneration schemes and obscure or partial data on marketing expenditures that attracted the attention of concerned members. The old Board disclosed remuneration schemes up to 2009, but these disappeared from the reports after Mr Malley became CEO. Therefore, the absence of disclosure can not only be a crisis management strategy to repair broken legitimacy (Belluci et al., 2021; Corazza et al., 2020), but in this case, it was also a trigger setting the scandal in motion.

As the scandal mounted in 2017, concerned members and the press produced involuntary disclosures to frame the scandal, assign responsibility and oppose the status quo. Specifically, CPAA did not willingly disclose information on remuneration and marketing expenditures, but stakeholders still uncovered this information (Andrew and Baker, 2020; Dumay and Guthrie, 2017). These were involuntary disclosures, pushed by opposing figurations that took the form of counternarratives and accounts (Dumay and Guthrie, 2017; Perkiss et al., 2020). The counter-narratives and accounts opposed the reports and numbers provided by the Board and mobilised the members in support of change (Vaara et al., 2016). For example, the two figurations relied on their information sources to fill the absence of disclosure with their interpretations, such as benchmarking with CPAA's competitors and the market research firm's estimates (Firoozi and Ku, 2023). Moreover, the two figurations soon assigned to the CEO – and to the President to a lesser extent – the major responsibilities of the scandal even though CPAA was publicly defending the CEO and undermining members' concerns in interviews, media releases and through the letter from the COO to members. In the crisis phase, we can conclude that the press and the concerned members took control of the narrative from CPAA and imposed their own narrative through involuntary disclosures forcing CPAA to answer to their questions, engage with external actors (e.g. the Senate Committee) and act.

After the scandal, CPAA partially retook control of the narrative and centred the attention of the public on the remedies and actions taken to end the scandal. CPAA partially retook control by relying on the IRP and its requested disclosures. The IRP helped the new Board foster organisational legitimacy, show commitment to resolving problems and put an end to the scandal (Andon and Free, 2012; Belluci et al., 2021). The IRP reports fall into the involuntary disclosure strategy because of the IRP's independence and professional experience. From CPAA's perspective, it was not possible to control the information contained in the IRP's final report. However, it would be not entirely correct to view the IRP report as merely an involuntary disclosure since the IRP was still set up by the Board and still operated under CPAA's terms of reference. For this reason, we refer to the IRP's disclosure as requested. Therefore, we propose requested disclosure as a type of disclosure that is neither entirely involuntary nor entirely under the control of an organisation since it is influenced by that control. Requested disclosure adds a more nuanced view to voluntary and involuntary disclosures in a crisis (Coombs and Holladay, 2023; Dumay and Guthrie, 2017).

6.2 Communication, media channels and power games

The five figurations playing the CPAA power game resorted to different communication channels and different forms of media to coordinate, gain support, persuade and ultimately influence the power balance (Couldry and Hepp, 2017). On the one hand, the old Board mainly chose silence to fend off criticisms and remained indifferent to the concerned members' requests for information until this strategy became untenable (Belluci et al., 2021). Inside the CPAA figuration, the CEO secured a favourable power balance and eventually exerted his power in actu by negotiating an uncompetitive remuneration scheme and a marketing strategy that revolved around his personal branding (Latour, 1986). By influencing the Divisional Councils and obstructing the organising of concerned members (e.g. holding the AGM in Singapore and interrupting a member gathering), the Board delayed opposing figurations with enough collective power for confronting the Board. In the first phase of the game – the pre-crisis stage – no figuration surfaced with sufficient functional interdependence to withhold power from the Board. So, the Board continued to control the game and pursue its agenda (Dopson, 2001; Elias, 1978). To this end, the communication strategy to its power in potentia relied on not including remuneration and marketing expenditure data disclosures in the corporate reports.

On the other hand, other communications media, such as emails and the press, became the source through which members could inform themselves of the evolving issues at CPAA. Communication was also the means through which they demanded change, broke the old Board's stranglehold on power, and established power in fieri (Couldry and Hepp, 2017; Hepp and Hasebrink, 2014). Eventually, the members' concerns gained support and were amplified by the press. The opposing narratives became dominant when the two different figurations – the concerned members and the press – formed a coalition of communication powerful enough to shift the power balance (Couldry and Hepp, 2017; Elias, 1978).

The collective dimension of power was crucial for the concerned members' ability to stir the power balance in their favour (Connolly and Dolan, 2012; Dopson, 2001). In 2016, the concerned members and The Australian Financial Review were dissatisfied with how the CPAA figuration behaved. However, it was only when the two figurations could enrol a critical mass of actors (e.g. more members, other journals, ASIC, the Senate Economics Committee, etc.) that the power balance shifted. The more the power game acquired new players and increased complexity, the less the CEO and the old Board could control the game and the disclosures. Eventually, the former dominant player, the old Board, experienced an unexpected outcome – its demise (Dopson, 2005; Elias, 1978).

In the third phase of the power game – the post-crisis phase – the collective dimension of power explains why the CPAA figuration regained a favourable power balance. By establishing a novel and independent figuration, the IRP, CPAA modified the power game from a one-vs-many to a multi-level, multi-person power game and, in the end, undermined the ability of concerned members to control the game's outcome (Elias, 1978). Being independent yet subject to CPAA's terms of reference, the IRP communicated with the concerned members, collected their feedback, sifted through it and ultimately recommended to the new Board ways to regain its legitimacy and, eventually, its power (Andon and Free, 2012; Couldry and Hepp, 2017). The IRP's creation, therefore, added another layer to the power game. With this manoeuvre, the new Board could detach itself from the game, leaving the IRP to play the Board's role in its stead (Elias, 1978). Consequently, all that was left for the new Board was to use the integrated annual report and the three updated reports on the IRP's recommendations to inform members of the changes it chose to implement.

However, these corporate reports were also part of the new Board's strategy to restore power (Elias, 1978; Latour, 1986). In the front of the report, the President and CEO's Letters acknowledged that CPAA underwent hard times, but they fell short of apologising, expressing regret or identifying the guilty parties (Koehn, 2013). In this way, they distanced themselves from the scandal (Andon and Free, 2012; Edgar et al., 2022). Moreover, a new thorny issue – the loss of the Professional Standards Council's liability-cap scheme – was only briefly reported on page 35 of the 2017 report (IR2017). Also, during the 2018 AGM, only those amendments backed by the new Board were approved by the assembly, thus returning a clear picture of the restored power in actu.

Elias' (1978) figurational approach provides an innovative theoretical framework for understanding power's collective and dynamic characteristics, of which the CPAA scandal is an interesting example – even if it was only single individuals who “commit[ed] the moral violation” (Coombs and Tachkova, 2019, p. 73). Soon the whole organisation, its governance mechanisms and its power structures came under fire. Such structures, in the end, were recognised as flawed and empowered managers to commit moral violations (Elias, 1978; Latour, 1986). Moreover, the in actu – in potentia dichotomy returns a snapshot of the actor–network relationships empowering a certain actor (Latour, 1986). Power in fieri emphasises the shifting dependencies among communicative actors and figurations, which formed coalitions and opposing parties, and explains the changing power balance occurring from a certain in actu/in potentia configuration to another one (Connolly and Dolan, 2012; Dopson, 2001). Therefore, the augmentation of actor–network theory with the figurational approach better explains the power collective and dynamism at the heart of organisational and societal change (Connolly and Dolan, 2012; Elias, 1978).

7.1 Limitations

Our research does not come without limitations. Firstly, we relied only on secondary data, and we acknowledge that complementing our dataset with primary data, such as interviews with concerned members and the CPAA establishment, could have returned an even more enriched and nuanced narration. However, we tried to mitigate this by using data sources that could proxy the main characters' voices, such as news articles quoting the concerned members, the President's and CEO's letters in the reports, media releases and communications to members, to compile a fair representation of the CPAA story.

Secondly, the content analysis methodology is subjective since it implies reading, understanding and manually coding the data. We reduced such subjectivity to the minimum by complementing it with objective procedures such as word count and word tree analyses. Still, we believe that a certain degree of subjectivity endures (Smith and Taffler, 2000; Steenkamp and Northcott, 2007).

Lastly, we did not deepen the discussion of the whole body of work on figuration theory, its limits and its intertwining with cultural and social processes (Connolly and Dolan, 2012). Instead, we focused only on the figurational conceptualisation of power, power games and figurations. Therefore, we acknowledge to have just started to scratch the surface of figuration theory applied to accounting, and we call for further research on such a promising yet little-known approach.