Role: member of IFAC’s international ethics standards board and former global privacy officer, Towers Perrin
Highlights: varied career
You’ve recently left Towers Perrin to start up your own consultancy. What work did you do there?
As well as working for IFAC, you also serve on CIMA’s professional standards committee. What part do professional standards play in business?
Most people I deal with, in all walks of life, want to be professional. They want to do well in their careers and constantly strive to do better. They’re not necessarily trying to be world experts, but they do want to perform their jobs confidently and gain the knowledge to make the best decisions. That’s the core of good professional standards, which feeds through into good corporate governance. Some people already know what they must do and want help to find the best way to achieve it in the shortest time. They still want to do it well – not only because it’s legal, but because it’s ethical and makes business sense. Part of the fun of my work is that I won’t know every detail about their situation. I have to understand what they want to do and the environment they work in to help them find the right solution.
How do you go about doing that?
I explain the core principles of how good professional standards lead to good corporate governance. That helps people to assess their situation so that we can find a solution together. They say what works for them, I say what works within the principles and ethical standards, and we go from there.
Do you have any advice for management accountants on presenting information in the downturn?
Always think of your audience. Accountants are trained to work with information and meet certain standards by following rules and guidelines. This doesn’t change in an economic crisis – it simply becomes more important. Any information must still be handled in such a way as to reflect the company’s policies and the need to present it with integrity so that people can rely on that information. The challenge will be to ensure that the information you handle is useful and that you have made every effort to keep it relevant and appropriate.
This is where the accountant’s professional capabilities can help – in determining the level of risk and materiality and taking steps to address the risks. It’s not always as simple as that but, if there are situations where you’re faced with several options, it’s the point at which external auditors may be a useful sounding board.
All the main professions approach the same issues of corporate governance differently. Accountants often want to see a process and understand how they get from A to B; they want an audit trail. Lawyers may focus more on whether you’re working within the rules. If you aren’t, they will go back to see what the rules actually stipulate and find out why there might be some confusion. This back-to-basics approach feeds into professional processes and is the basis of all principles-based regulation.
But isn’t corporate governance a mix of all these different approaches?
In essence, yes, because you reach a place where principles, corporate governance codes and ethics guidelines all feed into a common language that’s global, no matter what culture you are operating in. I do lots of work in Asia, Europe, the Middle East and Africa and most questions ultimately come back to core principles: what’s the desired output and how does a business get there in a way that reflects its standards of integrity and serves the public interest? These are the bases for professional work worldwide. Once you’ve identified that is how you work, you can add the local laws and culture into the mix. In practice, while many people say “I don’t deal with ethics”, they are really trying to do a good job within the rules that apply to their situation, so they’re working ethically even when they don’t realise it.
But don’t intentions matter?
No matter how junior or senior you are, you should know your duties and the structure in which you’re working. As soon as you go outside these, for whatever reason, you are in uncharted territory. You always have a choice. If you’re really junior, you might need the structure to be set by your managers because you may not yet be fully aware of the norms for your environment. But, once you do know them, as soon as you stop thinking about the right way to do something and start behaving like a robot, you stop using your professional judgment. It’s this framework of questioning and behaviour that marks out a professional.
Surely the “right” thing would change over time?
The principles of usefulness, being aware of the shareholders’ interests and operating professionally remain constant, but the details will shift over time. This is why you need to keep questioning: is the way I do this still useful to the business and does it match up with my professional standards?
Why did you want to be an accountant?
When I was about 13 I saw a TV programme about young copper miners in South America. They had to borrow money to survive and then became ill because of their jobs, which meant they had to go further into debt. A man who’d made his fortune in business started to educate the children of the copper miners so that they could escape this vicious circle. I decided that I wanted to be able to do this. I took a joint economics and Arabic degree because I thought that it would lead to a lucrative job in the oil industry in the Middle East so that I could make my fortune and become a philanthropist.
You went on to become a lawyer and arbitrator as well. Why?
I’d been working for KPMG and studying for the ICAEW qualification, but I flunked the statistics paper because I couldn’t see any use for that at the time. So I left and started working in industry. I began a law degree because I’d been told that it would give me exemptions on the CIMA course (I’d missed that year’s intake). I had so much fun doing the law course that I continued with it even after starting with CIMA. I moved to work on systems at BT because of my audit experience.
My next few roles were all about changing systems – at Reuters, NCR and Associated Newspapers. Reuters was particularly interesting because I was involved in setting up Europe-wide processes and systems, which started me looking for consistent, common ways to work across borders. When I moved to the telecoms regulator Oftel, I realised how law, finance and statistics combined to affect how an industry could develop.
What prompted the move into arbitration?
This was a big turning point for me. I became a lawyer because I was able to do the course part time while working, but I found that I enjoyed supporting people at a crossroads in their lives and thought that I should improve my skills in this area to do it better. I took arbitration and mediation courses, which gave me the skills to stand back, take a look and consider both sides of a situation. It was a revelation – I’d had no idea that this would be so useful. I’d been so busy learning new information that I didn’t realise the importance of a skill that would help me to encourage other people to come up with their own solutions. I’m now a fellow of the Institute of Arbitrators and am also accredited at mediation.
How unusual is this mix of skills? Would you recommend it to other accountants?
Quite a lot of management accountants also have legal qualifications, but I think that the arbitration and mediation aspect adds a whole extra layer. It’s important for younger CIMA members to realise that they must not let anyone put them in a box as an 'accountant'. The qualification is a springboard, not a barrier. It means you have reasoning ability, rigour, the capacity to marshal facts and a professional framework. You must use these to help you choose where you go next – and sometimes you need to take a risk. You must decide for yourself how to develop your skills and accept that this may take many years. Learning doesn’t stop because you are qualified at one thing – a qualification merely gives you the advantage of being able to pursue further qualifications because you’re already earning.
Tell us about your latest challenge.
I’ve just joined IFAC’s international ethics standards board for accountants (IESBA). The board has a work programme covering particular issues affecting accountants worldwide – member bodies from around the globe contribute to its programme. I’m already on CIMA’s professional standards committee, so I get input from all of these and then feed into the IESBA. Once again, it all comes down to two questions: how does it work in practice and does it match up with professional standards?
This article first appeared in Financial Management Magazine, July 2009.