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 Ideal 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. …