I want to come to you next. Sorry to keep you waiting you've been very patient didn't how early it is over overall. Hey, you are very kindly please join us. Take us through your thoughts on this. I mean, obviously, coming from a slightly different perspective, you're coming from the boardroom, having been in the profession I know for many, many years yourself, you now find yourself leading one of the biggest company or the biggest companies in the US, take us through your perspective on the industry and what it needs to do next. So in
00:33
many respects, I would summarise the survey and the Trust Barometer as a call to action. And it's really, I think, a call to action to broaden the base of trust. The reality of Chartered Accountants is that the majority of Chartered Accountants work in industry, not actually in the profession. And many of them like myself work not necessarily in financial roles, but there is a clear credibility for the profession and members of the profession in relation to trust ethics, business performance, etc. And so I really see down the opportunity for us to broaden the base of leadership built around the credibility, the ethical standards that the various chartered institutes have established and the credibility of trusting when Penn was going through the results. 86% of CEOs are expected to have opinions and express opinions in relation to purpose and societal matters, but only 70% of accountants Well, in many instances, it's the same person, the CEO is a chartered accountant as it is in, in my case. So I really see the opportunity for us to be more influential in the business environment, particularly around the area of establishing purpose and citizenship. For corporates. It's very clear, not just for the last 18 months, but particularly highlighted in the last 18 months is the businesses need to be part of the solution they need to be collapse and sorts of coalition's to create a better outcome that's more inclusive, that covers Yes, ESG, you know, D and I what really drives a more balanced approach to business. And it's notable that in the US, the Business Roundtable, probably the most influential business body in 2019, took the explicit decision to read its purpose, recognise that the simple pursuit of profit was not in and of itself an exclusive business knowledge that he was a multi stakeholder at balanced
02:56
science, customers and shareholders were equally considered in the purpose of business. The other thing that I would call it strongly, Dan is that the role of knowledge based fact based, we have had probably the greatest challenge in the history of humankind over the last couple of years around the role of the expert, and in fundamental challenge to the role of the expert. And I think chartered accountants have a hugely important role to play in the reestablishment of the bona fie days of experts and expertise, whether it comes into areas as Carolyn was talking about cybersecurity, data integrity, other areas, or just simply the role the business has and the credibility it has in moving us forward. So I would really encapsulate the researchers saying, let's broaden the base of trust. Let's ensure that the role of Chartered Accountants play outside the profession is as equally impactful and influential, and let's establish within every organisation, the fact that leadership should happen at every level in an organisation and the chartered accountants have a role to play in establishing credible, deep, societally relevant leadership in businesses that to be sustainable need, in my view, to reflect and represent that balanced stakeholder map. I don't think you can build a sustainable corporate these days if you're not appropriately considering ESG D and AI, inclusion, but also critically, that the areas of environment and societal outcomes are essential. If we have significant unemployment. If we have limitations on the access to knowledge to information to education, we're essentially allowing a group of people to potentially be be economically inactive, that can never be an outcome that any business should consider as being appropriate because our business models, our business cases, our future growth potential is defined around creating an environment in which people can be economically active because they have a right to the dignity of work. And in doing so we create an environment in which we can contribute to a better societal outcome and a better business outcome at the same time, so let's expand the role of Chartered Accountants select, let's recognise that we can be influential in the fabric of business in the corporate world just as much as we have in the profession and in the auditing world.
05:44
Absolutely. I mean, one interesting things in that area is that the rigour that depression brings to financial accounts can be brought to bear on, you know, things like the ESG objectives, which I don't know, but for your perspective, but from from a financial gems perspective can be somewhat wishy washy in the sense of big big noises, big sort of things being spoken about, but ultimately, you know, measurable deliverables need to be in there as well to truly drive us forward and to see where we get to. And I think we're seeing that a couple 26 at the moment. But just one question for you. I mean, well, partly that, but also, you know, I think one of the things that pens presentation really showed is that is that balance between the financial need for financial resilience and financial scrutiny, and the need for obviously, to now progress into a different area. How do you balance those as a company? Because I'm not saying they're opposites, but they are different? There can be different mindset. It can't there, there is a you know, there's a call on price and our financial balance sheets, right. And there is a different sort of stream before, which is perhaps around the other side, how do you bring those together? How do you balance those two, sometimes contrasting objectives?
06:54
I think in my view down, that's where the role of the Chartered Accountants come to the fore, because I think in many organisations in the past, we have seen the new set of objectives. And in watching, I would challenge that hypothesis and say that actually a sustainable business model and a sustainable business strategy requires a much more integrated and holistic approach. So that that stakeholder debate actually reflected in guess what happy employees create, for a surprise, surprise, paying a living wage makes a difference to the way employees turn up every single day. So there is no inherent conflict unless we choose to make it so. And I think the role that finance people and Chartered Accountants, in particular in the ESG agenda can play is bring it into the mainstream and into the forefront of how we run our businesses in a fundamentally sustainable way. And then a pro societal pro economy weigh and in doing that, I think what we've seen is in the last 18 months, is that the environment for ethics, etc, is coming under a lot of challenge, but even to the practical reality of diverse working environments where we have a highly distributed workforces, most organisations will going forward, how do you make sure that the same influences they're about shadow of leadership and the behaviours that people can observe in a work environment are also brought to bear in a much more distributed employment environment where maybe there isn't as many opportunities for people to reinforce trust and ethics and standards by their direct visible behaviours. So I think we have both a challenge and an opportunity, but we will not succeed if we consider these to be mutually exclusive objectives within a business. Yeah.
09:00
Excellent. And you know, I get the as you say that the role of the profession in making that work is going to be crucial.
Mike often come to you. And now I'm very patiently waiting for us. So thank you. Thank you so much. And just take us through again, your thoughts, responding, responding really, to what the survey showed, and what you thought were the key takeaways, but also perhaps what our other panellists were saying. So we, you know, we covered a lot of ground already in the last 25 minutes, you know, in terms of both some challenges in South Africa, some of the kind of potentials in, you know, in Australia, and then Rowan and taking us through those ideas that actually bring it all together within the boardroom, and delivering some objectives that's going to be crucial for the future. So take us through your thoughts on all these matters. And we can go from from there and some questions. So Michael, please take us away.
00:45
Okay. Thanks, Dan, that Well, the first thing I'm struck by is that, as we heard from Rowan and Carolyn and Freeman, how many of the things that they actually said, had resonance with what's happening both in Europe and the UK are experiencing things in our own situation, which is not being replicated in some way, in other territories and geographies. In terms of the in terms of the survey, I'm, I'm a longtime follower of the Edelman barometer. And I know that trust has been under a great deal of scrutiny and challenge now for a number of years. So it's good to see that over the past few years, business CEOs and chartered accountants have actually picked up a little bit in the last in the last few years. I am like Freeman, I'm not, I'm not satisfied with those results, and certainly not complacent. But I think what they do reflect is the fact that the accountancy profession, in many parts of the world where it is under scrutiny, has taken some steps to try and get its house in order, working with others. And certainly, during the course of the pandemic, which we should all remember has been absolutely terrible in many countries around the world. So it would be wrong for me to say that anyone has had a good pandemic, but during the pandemic, Chartered Accountants in the UK, Europe, and I think Indeed, many countries around the world, were actually the first port of call for business, particularly the SME community, they picked up the phone to their chartered accountant and said, What do I do? And the reality is that those chartered accountants were able to work with those businesses, and they didn't save lives, but they saved livelihoods. And I think that's really important that we recognise that and acknowledge it. One of the things that I was pretty pleased with quite early on, is that the, the World Economic Forum did a big re rewatch of sustainability and some of the things that Ron was talking about, in the summer of 2020, they called it the great reset. And on the front page of the World Economic Forum's great reset was a piece about the accountancy profession, and the accountancy profession were called the first responders of the business world. And that very much reflected everything that we did during that period. Just coming back to some of the backdrop because Dan, you alluded to this in your opening comments. We in the UK have seen a number of corporate failures. And every time we have a corporate failure in the UK, rightly, we're asked questions as to what was the management doing? What were the directors doing? What were the auditors doing? And what were the regulator's doing. And they're a chartered accountant sitting in each of those pillars. Now, as Ronan said, Actually, most of our members are in business or in the boardroom. We certainly provide auditors for the practice side of the house. But lots of Chartered Accountants are regulators. And what we what we need to do is look at why some of these corporate failures have occurred across that governance and reporting chain and put steps in place to restore that trust. So for those of you who are watching this from international locations, the UK has had three very significant reports in the past four years, John Keenan did a review into the regulator. The Competition and Markets Authority did a review into competition. And so Donald Bryden did a review into audit and What the audit product needs to do to evolve to make it more fit for purpose. In the 21st century, the accountancy profession supported all of those inquiries. In fact, as far as Donald Brighton's review was concerned, we actually provided the funding as well. So these weren't things that were done to us, we were cooperating. What we're waiting for now in the UK is the government's response. And I think that government response is going to be looked at very closely in Europe, and other jurisdictions around the world is going to put in place we expect a new regulator, Olga is going to
05:42
is going to recommend that there's a strengthening of the internal controls in the UK, it's going to strengthen director accountability is going to hopefully bring forward a stronger audit product that's more forward looking. And I think I think around all of those, there are many other things that are also going to be part of the supporting cast. The progress in the UK in terms of getting this actually out, announced the dental legislation. And the Fred has been Blaisdell the, the corporate family of Carillion happened in January 2018. We're rapidly approaching the four year anniversary. So I mean, for this, as far as this is concerned, we can't come quickly enough. And And one final final thought down and then I'll then I'll be quiet. I mean, obviously, we can't we can't talk about the realm of the accountancy profession, and our our purpose and our positioning in the world without recognising that cop 26 is going on at the moment in the UK. And this is this is possibly one of the biggest challenges the profession has ever faced the planet has ever faced. The good news is that Chartered Accountants are problem solvers. We look to how we can find solutions for these things. And for those of you who aren't aware, the president of cop 26 And look, Sharma is actually a chartered accountant. So hopefully, it will bring home the bacon as they say. So, Dan, a few a few thoughts from me, hopefully bringing together some of those excellent thoughts from our panellists. Absolutely,
07:26
I actually had hadn't realised that Alec was chartered accountant before. I knew as your business and reading wasn't it before, but it's a bit late that I cannot lead to get excited to just ask one more question before we move on to the to the to the broader questions, but I mean, take us through the I mean, it's so obviously the UK has got this new framework coming out. We hope in the next next few months, we'll send the response from the government. But do you think there's enough to your point? There we go. Let your last point. Do you think there's enough in there about future directives that the you know, as Ronin says the need to really drive, you know, change the agenda from just financially? You know, literacy and, you know, making sure the numbers stack up to actually, you know, moving into an ESG sort of metric world. Do you think it's nothing there in the in the white paper? Or is it just too focused on, you know, solving the problems from four years ago?
08:18
Well, I think first of all, it's it's a very large package. I mean, the white paper that that came out in March 2021, closed consultation in July 2020, is well over 200 pages. I mean, it's it's actually the biggest piece of corporate governance, audit reform that we've ever seen in the UK. Is there enough in it, there is enough in it providing what doesn't happen, things get and diluted, because a number of those things that I measured mentioned, are all important legs of the stool, and you start to take away any legs of the stool, and it becomes less stable. I think it's directly to the point that is there enough in it around some of the forward looking pieces. I think certainly in terms of what investors and society wants to see around ESG measures and ESG reporting. It doesn't touch in that in enough detail. The bit of announced this week with appropriate timing, cop 20 Is that the if IFRS foundation is going to announce the establishment of an international sustainability standards board, which will sit alongside the IFRS financial reports, and it will be focused entirely on all facets of sustainability. ESG metric reporting. This is something that they consulted on in 2020 there was almost unanimous support from urandom World for that. And it's it's it's very important that that comes forward because, you know, as some of my fellow panellists have said, you know, there is so much data out there in the world, we need to be happy with with the data, we need to be happy that it's being measured properly, reporting properly, and that we're seeing some assurance against it. And that measurement reporting and assurance, frankly, are things that chartered accountants do better than anyone else.
10:28
It's, well that does sound like a good development progress.