Roads leading from Rome

wcoa-panel-b
Over 300 people packed the large auditorium at Parco Dela Musica in Rome – all eager to hear more about the innovative AuditFutures programme and to listen to the discussion on the new horizons for accountancy, led by panellists with quite unexpected backgrounds and experiences. Multi-disciplinary approach is our hallmark and our panellists reflected that: Dr Nick de Leon is an engineer and designer, Brett Scott is an activist and journalist, Dr Ivan Krastev is political scientist and Lee Bryant is an organisational strategist.

These four people brought new disciplines, new skills and new perspectives to change our thinking. Their messages were framed by ICAEW’s executive director Robert Hodgkinson, who chaired the panel: the world is changing, society’s requirements are changing, and the profession needs to change too – here’s your opportunity to be the change you want to see.

Make history

Nick de Leon leads service design at the Royal College of Art and sees that one of the key things about the 175-years-old institutions is to have a number of provocateurs over the years. The RCA has made history, but was not made by history – their role is to make history. This is something that he reflected on about accountancy. Is accounting made by history or are we in the business of making history? Are we responding to change of regulation and where regulation has failed? Should the profession work that response mode or should it take one of leadership, of being proactive in the nature of changes.

Many professions have changed over the years and many people are saying these changes are taking place because of the tide of technology that has come. Nick argues that the tide of technology is merely a sideshow. That tide of technological change is enabling something which the accounting profession has to respond to. Globalization, empowered citizens, social media – all these trends have dramatic changes on the businesses, on the way leaders behave and even on the way we interact with businesses. Accountancy can make history by leading society through these changes.

Take responsibility

Lee Bryant sees many of these changes to impact how we think about business and how business is conducted – primarily how businesses are organised. He believes that business is an amazing power for change – both good and bad. But at its heart is the challenge of how you organise people, their labour and their creativity to create value. What Lee finds interesting from a historical perspective is that most of the American and European corporate models are locked in a very old structural model. There is a corporate structure with a cascading hierarchy, departments, budget meetings, project managers and all this high cost of doing business. All this is the invention of the late nineteenth century, updated with Fordism and Taylorism in the early part of the twentieth and solidified with enterprise, technology and IT from the mid-twentieth century onwards.

Lee strongly believes that these models are no longer fit for purpose in the 21st century. Because of the collaboration and social technology, it has never been easier to operate a business using that you might call alternative models or structures. How do we move away from an emphasis on process and post-factum regulation, which is often ‘a reaction to prior stupidity’? How can we go from that to a situation where we hire the right people, give them the right set of values and sense of purpose and join them together, in way that they can take responsibility – both as individuals and as a group?

Lee is optimistic about the opportunities for accountancy. Just as business is dramatically changing in the 21st century – getting better, getting cheaper, getting much easier to scale and grow on a global basis – so many of these changes we will see in the profession and these are good challenges to start with.

Question transparency

Dr Ivan Krastev created a stir in the audience with his challenge to question transparency. He argues that there are two ways to hide information – one is by not telling anything and the other is by giving too much information. We live in times when the levels of mistrust towards institutions – both governmental and corporate – are very high. There is a strong perception that transparency by itself can create trust in society. Ivan believes that transparency is very important. The required disclosures on food and medicine labels, for example make people more powerful customers. However, he is concerned that we are reaching a point where transparency is not treated as an instrument for better functioning world but as an objective by itself.

Ivan does not believe that it is simply enough something to be more transparent. Transparency should work for the public interest. If we push out more and more regulation asking business for more transparency, we won’t achieve something significant. We are creating this illusion that we can make business more transparent and thus more accountable to someone who has no good sense of business. This illusion could backfire. Dr. Krastev’s challenge to accountancy is to question transparency because people often have these tendencies to make objectives out of instruments.

Empower all groups

Brett Scott sees horizons as a way of seeing yourself and where you want to get to. He thinks that accountants have an important role to play if we are trying to create self-organising structures in society, which do not rely on external forces but help keep everyone accountable. There’s a difference between the day-to-day practice and how you consider yourself and how the public perceives you. Brett shared the perception of many NGOs and civil society groups that the accountancy profession is too tight up with the corporate sector. One of the questions he raised for the profession going forward is: how do you change that image? Brett did not suggest we should reject the corporate involvement, but that we could you demonstrate that we are connected to other groups in society and represent their interests.

With his activist hat on, Brett challenged the phrase ‘serving the clients’. He thinks that people find this problematic, as there is a difference between mastering a profession, serving a client and serving the public interest. They can be aligned with each other but are not necessary the same thing.

 

The overall message from the panel was the accounting profession has phenomenal potential for engagement with society, businesses and things that are happening on the ground. We are embedded in what happens. The speakers did not come to us as a designer, engineer, organisational strategist, political scientist and journalist activist and said “we have some things to tell you”. Instead they said: you’re all political scientists, you’re all organisational strategists, you’re all journalist/activists. You have got these values – just give expression to them. We have a lot of these in the profession and should have a bit more courage to take them forward.

To read more about the rest of the ‘New Horizons for Accountancy’, please download our Panorama 15:01