When CFOs Fall from Grace

Scandals and misleading conduct put CFOs in the spotlight.

Finance professionals have no doubt caught the recent sensational headlines about the spectacular fall from grace for two CFOs for misleading conduct and a damaging disclosure and governance scandal.

Tech software CFO Stephen Doyle has this week been ‘terminated by mutual agreement’ after a media investigation exposed serious culture and governance issues, missed sales forecasts and a previous attempted coup to oust CEO Rod Vawdrey.

The ASX announcement states that Doyle had been in the CFO role at Nuix for a decade, and wished him all the best for the future.

Doyle describes himself on LinkedIn as a finance executive with a strong track record of experience in APAC ASX listed small capital and medium sized businesses. He has extensive experience in capital raising, IPO, domestic and international business turnarounds, change management, performance manager and merger and acquisitions, which is yet to be updated since his fall from grace this week.

Doyle’s termination followed a high profile investigation by The Sydney Morning Herald, The Age and The Australian Financial Review. The stories revealed that the Australian Federal Police is investigating possible breaches of the Corporations Act after the investigation exposed apparent gaps in Nuix’s records concerning the date that an offshore company obtained 300,000 share options in Nuix.

The Chartered Accountants Association of Australia and New Zealand confirmed to CFO magazine that Doyle is a current member.

In what has made sensational headlines, the media revealed that Doyle cleared his desk at Nuix’s Sydney head office shortly after news broke that contained details of his share transfers to his brother in tax-friendly Switzerland.

Nuix provides the software platforms that regulators, tax officials and law enforcement agencies, such as the US Department of Justice, the Serious Fraud Office in the UK and the Australian Federal Police rely on to run top-sensitive investigations.

A second CFO, Michael Potts, has also been ordered by the NSW Supreme Court to fork out an eye-watering $43 millionplus interest to the National Australia Bank after he engaged in misleading and deceptive conduct during negotiations for a loan facility, according to media reports.

The case follows revelations made very public in the media that Potts failed to disclose the company’s dependence on ‘over and above’ rebates from suppliers on earnings. Dick Smith was placed in voluntary administration and receivership owing $390 million in debt.

The case against Potts, who was a CFO of the fallen electronics retailer between 2013 and 2016, was brought against him by Dick Smith in the wake of the company’s collapse in 2016. The Australian reports that the case was launched by the retailer’s lenders NAB and HSBC and the company’s receivers.

Aside from that, up to 3200 staff were underpaid, estimated at around $2 million in annual leave payments.

Potts fled Australia back in 2016, where he’s been working in financial roles ever since.

These days, he’s a director of a chocolate-based desserts business in Bristol, Mrs Potts Chocolate House, which he runs with his wife, according to his LinkedIn profile.

Potts finished up as a director at Xero bookkeeping firm Steele Financial in August 2020. It’s website states it is a ‘team of certified chartered accountants with over a decade of experience helping businesses reach their full potential.”


The CAANZ received 297 complaints in 2019/20 about its members, and 337 in the 2018/19 year.

Kristen Wydell, general manager at Professional Standards at CA ANZ said she is monitoring the matters relating to CFOs that have been reported in the media.

“Information relating to members and investigations by CA ANZ in confidential. In some cases, CA ANZ may not be the most appropriate agency to deal with the allegations in the first instance,” Wydell says.

“Allegations are often dealt with by regulators and the courts, which have powers to impose civil and criminal sanctions. An adverse finding against one of our members by a statutory or regulatory body may result in a complaint or investigation under our professional conduct process,” she says.

CAANZ members are governed by a Code of Ethics and are obliged to meet high standards of professional conduct. The Code is based on five fundamental principles including integrity which is to be straightforward and honest in all professional and business relationships, professional competence and due care and professional behaviour.

“We continue to encourage members to review the Code and consider how it affects their activities.

The CCA recently extended mandatory ethics training to all members, which demonstrates the importance it places on ethics training, which is consistent with communication expectations and the responsibility of our members to act in the public interest,” Wydell says.

The CAANZ annual report states that: “Complaint numbers can vary significantly from year to year. This year the number of complaints received continued at slightly lower than averages in recent years. We continue with our in-depth investigations into complex and more serious complaints. In addition, there have been a number of cases heard by the Disciplinary Tribunal during 2019/20, which were not finalised by year end.”

Complaints are mostly about breaches of charter, by-laws, regulations, rules or standards, failure to observe proper standards, negligence or incompetence, it reveals. Failure to comply with the organisation’s direction, conduct unbecoming, professional misconduct and insolvency or bankruptcy are also common breaches listed in the report.