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CIPDThe HR profession

CIPD defends £3m Bridge deal after ‘anti-competitive’ criticisms

by Mike Berry 23 Oct 2009
by Mike Berry 23 Oct 2009

The CIPD has defended its £3m acquisition of Bridge Partnership following criticism from some in the HR community that the deal is anti-competitive.

The Chartered Institute of Personnel and Development said it bought Bridge – which specialises in strategy and leadership and organisational development – to build its links with business leaders and senior HR professionals.

Bridge has close ties with CIPD chief Jackie Orme, having worked with her during her previous role at PepsiCo. The firm was brought in by Orme last year to work on the institute’s ‘Next Generation HR’ research project. One of its directors, Lee Sears, has been on secondment to the CIPD as a “strategic adviser”.

In detail:
The CIPD-Bridge deal

Bridge Management Training Ltd – trading as Bridge Partnership – and its associated brand Lifeworx (a coaching firm) are now both wholly owned subsidiaries of the CIPD, with Jackie Orme becoming a director.

The CIPD paid £3.7m in total for Bridge and acquired £700,000 in cash – a net £3m purchase. Further payments will be due dependent on Bridge meeting performance earning targets.

According to credit rating website Checksure, the firm has an ‘average’ risk status and should be treated with a degree of caution. Its latest accounts filed at Companies House for the year ending 30 September 2008 showed Bridge owed £1.78m to creditors, but had debtors and cash at bank and in hand of £2.45m. Its working capital was £667,699. Revenue and profit figures were unavailable. Lifeworx made a profit of £73,279 in 2008, up from £29,274 the previous year.

The CIPD made almost £1m operating profit in 2007-08, according to its annual report, with £28.8m in net assets.

 

But some members – a significant chunk of which are involved in HR consultancy – have questioned the deal’s lack of transparency and whether it throws the CIPD open to conflicts of interest.

One post on Personnel Today‘s community site HR Space said: “I am very disturbed by this. Bridge are direct competitors to many CIPD members working in change and leadership consulting. It means that I am faced with paying to be an active supporter and Fellow of a professional body that is competing with me.”

Another blogger said: “I don’t believe this would happen in the accounting profession due to a massive conflict of interest. There is a fine line for a professional standards body to be offering mainline consultancy services.”

Other forum posts questioned why there was no tender process or consultation with members. Concerns were also raised about whether long-term decisions on policy or standards would be influenced by a need to sell services in the short-term.

A CIPD spokesman said a shortlist of potential targets was drawn up after detailed research on members’ professional requirements, and insisted the acquisition would add value for them.

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“Bridge is one of a number of small consultancies operating and poses no special competitive threat to members. All profits from the commercial side are ploughed back into member services and benefits,” he said.

The Bridge deal is another chapter in a turbulent year for the CIPD. It follows widespread criticism of Orme’s decision to take a performance bonus despite a staff-wide pay and reward freeze, tens of redundancies earlier this year, and the closure of its final salary pension scheme.

Mike Berry

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