Rob Lewis reports from the ICAEW annual policy summit.

That cunning instructor of Italian princes, Niccolo Machiavelli, once taught his young rulers that policy was never something one should get caught out on. Complete flexibility, rather than passionate conviction, was the key to survival. The near-collapse of the western financial system has not yet seen the ICAEW led to the scaffold, but as the Institute's annual policy summit showed last week, citizens will have a hard job proving it ever espoused anything that could have contributed to the crisis.

The summit, as ever, was as close to an all-star billing as the accountancy calendar can boast. Moorgate Place regular Stephanie Flanders, the BBC's economics editor, did her usual excellent job as host, providing the crowd with a useful maxim to bear in mind when it comes to any critical situation.

“You know a crisis is bottoming out when a politician says something that is too pessimistic,” she said. With the possible exception of Ed Balls' off-record slip that the current recession will prove worse than the 30s depression, that isn't a line we have crossed yet, and the room knew it. And as the day went on, the occasional shaking head and comment from the floor showed guests were none too happy about it either. Yet Flanders went on to say something that shows why she is just such a favourite at Institute events:

“It was the US that caused this, and we look to them for leadership to get us out of it.”

It was a viewpoint that set the tone for much of the summit. A wringing of hands, yes, but an acceptance of the share of collective responsibility: certainly not. Michael Izza, the ICAEW's chief executive, had maintained in his three recent grillings before the Treasury committee that this is an economic crisis, not an accounting one, and the man is sticking to his guns.

So the theme for the day was leadership; better business leadership, better political leadership, and how to inspire the leaders of tomorrow. It was soft, and it was fluffy, and for the most part it stayed well away from the dry, technical issues like regulation and professional responsibility. The line-up contained only one practicing accountant, Scott Halliday, UK country managing partner of Ernst&Young, and only one accountant in industry (to use an antiquated term), Gaynor Coley, managing director of the Eden Project.

For the Institute, at least, it was a sensible strategy, because the die has already been cast. As both Larry Elliot of the Guardian and John Fund of the Wall Street Journal told the crowd, bar quantitative easing of the money supply, which is shortly about to come into effect, governments have now done just about everything they can.

We will see whether it works, or as the panel put it, fighting the recession is now more about implementation than policy. It was further evidence that we are past the point of policy, and indeed, the cynical might observe that the summit itself was designed to dissociate the Institute from any specific kind of policy at all.

While the morning's panel admitted that ‘playing the blame game is getting us nowhere’, it was perhaps inevitable that in the general efforts to give the accounting profession a clean sheet over the credit crunch that some scapegoats crept in. The bankers received the usual vilification they are getting everywhere else, and the lacklustre job done by Britain's non-executive directors was also highlighted. There were feints, at times, in the direction of insufficiently robust business models, but they fooled no one. Underpinning everything that was said lay a largely unspoken consensus that there had been an ethical collapse.

Michael Portillo, undoubtedly the day's main attraction, put it best – but then he is at liberty to, given that his parliamentary days are behind him. But not so far behind him that he isn't familiar with London's political circuit, and he voiced anger and surprise at the many senior banking figures who saw no shame in turning up for the champagne and canapés at Westminster's political do's.

“They can no longer claim they are acting in the interests of stakeholder value,” he complained, “or even shareholder value. They are in there carting out all the value they can for themselves while the company collapses around them.”

The subsequent fuss about Sir Fred Goodwin's pension over the weekend only proved his point. He also made a good observation that the failure of capitalism will anger conservatives more than socialists. After all, the left always kind of expected it. It may be, as Portillo suggests, that the right will now embark on a “reinvention of stigma” when it comes to the greed of the wealthy, something that will see it swap places with old Labour on one level.

But most acutely of all came his admission on the issues of business ethics and corporate social responsibility and leadership. You can put whatever value statements in your company reports that you like, but such tokens will no longer fool anyone.

“It's all shit,” he concluded, with genuine anger. Such gestures, and they occurred at institutional as well as corporate levels, have proved to be nothing more than hollow public relations, at least as far as the finance sector is concerned. And the accounting bodies have been as guilty of this as the plc's.

Ultimately we are left with something more serious than a simple case of scapegoating. We have assumed that because an individual has risen to career prominence in his chosen field, he is, de facto, a leader. Yet leadership comes with responsibility. An entire generation of supremely well-rewarded bankers and financiers have displayed remarkable a remarkable deficiency in both qualities. And no one knows what to do about it. It goes without saying that something a little bit more substantial than a new ethics course is required.

“We need a return to my word is my bond,” stuttered one speaker. Yet a return to that nostalgic city ideal is unthinkable in today's individualistic society.

As for inspiring the leaders of the future, to which the rest of the afternoon was devoted, one suspects the best we can do is to admit our sins, hang our heads, and let them get on with it themselves. Given that leadership was the key issue of the day, and considering the timing of it all, it was a great pity not to see some expression of culpability on the part of the Institute, even if it was only condemning the acts of others. Instead Moorgate Place maintained its customary, if not entirely dignified, silence.

Wrapping up, Michael Izza explained about the work the Institute did on the policy front. A vast number of submissions were made to regulatory bodies and political entities every year. At times, the Institute was the sole responder. Undoubtedly there is work being done, but the effectiveness of that work is not always self-evident.

It would be great to see a more outspoken Institute, one that was unafraid of speaking harshly when strong words are due. An Institute that really did the right thing, that stood up for the profession in general and was not afraid about the clout of the Big Four, overly precious of the ear of government, or too cosy with the Financial Reporting Council and the International Accounting Standards Board. Nevertheless, it is trying to make a difference. Michael Izza still attends CCAB meetings, at least, unlike the ACCA's chief executive, Helen Brand. But whatever the vision of its leadership, the Institute's power to change things for the good needs exercising if it is to become effective. Otherwise the ICAEW's leadership policy will come to resemble the front of Moorgate Place itself: a grand and elaborate facade.

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