Ken McHattie CA: ‘CAs can lead the way in restoring trust in business’
Ken McHattie CA outlines his strategy for the year ahead as he takes the reins as ICAS President.
Two years ago, ICAS faced up to the challenge of acting as a neutral and trusted source of information, in the campaign leading up to the referendum on Scottish independence.
Now, the UK-wide vote on Britain’s relationship with the European Union presents similar challenges. In the hot seat will be Ken McHattie CA, who succeeded Jim Pettigrew CA as ICAS President at the AGM on 22 April.
Ken says: “ICAS will not take a political position, because that’s not what we are for.”
Ken, chairman of Aurora Petroleum, is a qualified solicitor as well as a CA. As Vice-President and Deputy President over the past two years, and chair of the ICAS Oversight Board before that, he has been closely involved with the Institute as it has steered a careful course through potentially controversial territory.
He says: “We set out during the independence referendum to inform people who wanted more information on what independence would mean, and I think that’s where we should be in the EU referendum. We should be seeking to inform the debate.”
Ken adds: “We shone a light on one or two areas that were not completely understood [in the Scottish referendum] and we will do our best to provide objective, non-partisan information to help people make up their mind on EU membership.”
Restoring trust in business
Another key issue for ICAS, says Ken, is professional ethics and the need to restore the public’s trust in business. The Power of One initiative, launched by ICAS last year, stresses the ethical role of the individual.
He says: “The public’s lack of trust in business is damaging. We have to convince the general public, and the media, that while businesses are clearly trying to make a profit, the vast majority want to do so in a fair and ethical manner. CAs, both individually and collectively, can lead the way.”
This is partly about getting the message across about the benefits businesses bring to the community, he says, and partly about tackling issues such as tax avoidance.
Ken says: “I don’t like seeing major multinationals trading in this country and paying very little corporation tax, but we also have to recognise the benefits they bring by being here.
“The issues over fair levels of tax need to be tackled by worldwide cooperation; one country can’t deal with this on its own. And we have to continue to say to politicians, if you don’t like the outcome, change the rules!”
Another issue he is keen to see emphasised in his presidential year is the “disproportionate” burden placed by regulation and the UK’s complex tax code on small and medium-sized enterprises (SMEs).
Ken says: “SMEs are the foundation of the UK economy and they get a raw deal from regulations that are, relatively, much more burdensome on them than on bigger businesses. Not all regulation needs to be imposed on all businesses and a more considered approach is needed.”
The public’s lack of trust in business is damaging. We have to convince the general public, and the media, that while businesses are clearly trying to make a profit, the vast majority want to do so in a fair and ethical manner. CAs, both individually and collectively, can lead the way.
Ken is also keen to meet ICAS members, not just in the big conurbations but also in smaller communities throughout the UK, as well as the growing number based overseas.
He says: “We are in the process of building communities of CAs in the UK and overseas. Nothing beats face-to-face contact, but a lot of their engagement with ICAS will have to be digital, and the more effective we can make that the better.”
From law to finance
Ken’s career has taken him through the advisory role – in both the accountancy and legal professions – and onto the client side as a finance director with entrepreneurial businesses.
He studied law and accountancy at Aberdeen University before training as a CA with Thomson McLintock (now part of KPMG). After qualifying, he joined Oilfield Hydrographic Projects.
He was still drawn to the legal world, however, where he felt he would be able to bring a combination of skills that help him to stand out. He joined Aberdeen-based Stronachs and trained as a solicitor, before moving on to his first job outside Scotland, with 3i’s legal team in Birmingham.
“I loved my time there,” he recalls, but he and his wife Lorna wanted to educate their two young daughters in Aberdeen, and he returned to Scotland to join law firm Edmonds & Ledingham (now Ledingham Chalmers LLP)as a corporate law partner. That, for many people, would have been a solid career track but, as Ken admits, “I like taking on new challenges.”
In March 1998 he joined Atlantic Power and Gas, an entrepreneurial oil and gas services business, as finance director, with the aim of floating the company on the stock market. As things turned out, however, the board received an offer for the business and by June of that year it had been sold to a US-Norwegian company, Petroleum Geo-Services.
We are in the process of building communities of CAs in the UK and overseas. Nothing beats face-to-face contact, but a lot of their engagement with ICAS will have to be digital, and the more effective we can make that the better.
Ken stayed on for two years before leaving, with other members of the management team, to found Tuscan Energy, which went on to establish and operate the Ardmore field in the North Sea.
As he puts it: “It went from an idea to, within three years, an offshore installation producing 25,000 barrels of oil a day. They were exciting times and I was working with some outstanding individuals.”
Industry highs and lows
Unfortunately, further drilling proved to be very disappointing, at a time when, much as now, the oil price was in the doldrums.
Tuscan didn’t survive that setback and Ken moved on to join Energy Development Partners (EDP), which had been set up to acquire and bring into production stranded assets in the North Sea. By this time the problem was the reverse of Tuscan’s – the oil price began to climb again and there was less of an opportunity to make acquisitions.
As Ken says: “The oil industry has experienced many highs and lows and the position in which it now finds itself is nothing new. The problem is that the downturn comes when the basin is very mature.”
Ken’s current business, Aurora, is still in the oil and gas sector but firmly land-based. Aurora was set up to explore and develop shale gas in the north-west of England.
He says: “The challenges of onshore development are completely different from those of offshore, but no easier. A lot of the problems we face are driven by misinformation; we [the industry as a whole] have to continue to provide robust scientific evidence to convince people that the extraction of shale gas can be done safely and in an environmentally friendly manner.
“Many people in Lancashire support shale gas development because it will bring investment and jobs. It has the potential to be an enormous industry for that area. The gas in these shales could power the UK for decades to come.”
Meanwhile, Ken is looking forward to his year as ICAS President. He would advise other ICAS members to consider what they could do to play their part, too.
He says: “All of our boards have executive directors and chairs who are hugely talented, hugely knowledgeable and I would defy any of our members to say that they could not get an enormous amount out of spending time with them.”
He adds: “I’ve been incredibly lucky, with the people I’ve been able to work with. They have taught me so much, and it’s been a real privilege working with them.”
This article was first published in the April 2016 edition of The CA magazine.