‘We live in an era of warrior accountants’
By CA magazine
7 July 2021
Business has a chance to remake itself post-pandemic and, as Gillian Tett tells Lysanne Currie, finance professionals have a pivotal role to play
There’s a word in anthropology: liminality. It refers to a period of transition, where the normal rules and symbols of our world are all in a state of flux. It’s a phrase Gillian Tett is especially interested in right now – not least because, for many people, the past year has swept all those previous certainties away.
Tett, a 26-year veteran of the Financial Times, where she is now US Editor-at-Large and chairs its editorial board, has a PhD in social anthropology from Cambridge. She is fascinated by the subject – which explores unfamiliar cultures with a view to shedding light on our own – and, more particularly, how it might be applied to the business sector.
That’s the thesis for her new book, Anthro-Vision: How Anthropology Can Explain Business and Life, which suggests leaders and business people could learn a lot by approaching problems, from financial crises to corporate conflicts, from an anthropological view. “There’s a huge number of anthropological studies of how people use liminal rituals to mark a transition moment,” says Tett. “And the key point about this transition moment is that it’s not just dead space – it’s a moment of potential transformation.”
Naturally, there’s much in here for the accountancy sector to chew on. “When I was at college, we anthropologists thought that we were the ones who were going to change the world,” she says. “What’s become very clear in the last couple of years is it’s actually accountants who have the ability to change the world far more by changing the way they value companies.”
Currently, there’s lots of talk about how we should rebuild and reset, for a fairer society and greener world. For Tett, lockdown wasn’t a limbo state, more a liminal moment. “In some ways, lockdown turned us all into amateur anthropologists, in the sense that we’ve been forced to notice the stuff we normally ignore,” she says. “Do we want to go back to the old system we had? Do we want to go back to crazy, crowded roads and everyone jumping on planes every two seconds? Or are we going to try to embrace some of the things we’ve been forced to think about in lockdown and reimagine a better way of being?”
With many a company opting for a coveted B Corp status, “the passion in business is palpable,” she says. But how easy is it to make such an enormous shift when success has, for the past 50 years, been almost completely measured by profit, courtesy of Milton Friedman?
Wake-up moment
“The best way to understand this,” she says, “is to recognise that the second half of the 20th century was an era when a lot of amazing intellectual tools were developed to make sense of the world – which we needed. Corporate accountancy was one of those. It allowed a company to track what it was doing in terms of profit and loss and double entry and bookkeeping. If we hadn’t got those, we’d be in a fog.
“I’m not saying in any way shape or form that corporate accounts should stop what it’s doing, but what it should recognise is that any balance sheet it creates is only as good as the inputs and the boundaries it sets around that balance sheet. And when the context changes, you’re in danger of missing some really important inputs.”
Environmental matters have for too long been treated as a by-product, ignored or simply footnoted – “both in terms of the way the company is having an impact on the environment, which can come back to haunt it, and potentially destroy the very thing it wants to use for its company, but also in terms of the assets that it’s actually drawing on. Nature is not a free resource.”
Sustainability, she says, isn’t just about trying to do good or saving the world: “It’s about trying to save yourself as well. If you ignore it, you’re opening yourself up to reputational risks, to loss of customers, employees and also loss of assets. If you’re an oil and gas company, a lot of what you have in your balance sheet will turn out to be worthless. So sustainability has actually moved away from being mainly about virtue, to being about risk management. And, fundamentally, about self-defence.
“You can say, well, that’s all incredibly hypocritical. A lot of the companies talking about sustainability don’t actually care about it. But early in my career, as a war reporter, I covered real-life revolutions. I know that revolutions can happen when the silent majority go along for the ride because they think it’s in their own interests. I think that’s where we are with sustainability.”
And business is indeed waking up: “People are beginning to say, ‘Listen, this balance sheet stuff is brilliant, but it’s limited.’ If you’re walking through a dark wood at night with a compass, you don’t want to throw it away, because it’s useful. But you do need to recognise its limitations: no matter how brilliant that compass may be, if you only stare at the dial and don’t look up and employ some lateral vision, you will walk into a tree. Context matters.”
Future rules
While Tett is optimistic that “we’re living in an era of warrior accountants, activist accountants”, how can they get through to the more conservative stick-in-the-muds? “I think we need pretty strong rules to give accountants the justification for what they’re doing.”
For accountants explaining their actions to a corporate board, it’s often easier if they can invoke official guidance or a law, she says. And she refers to the “explosion of interest” in new accounting systems that have brought green sustainability issues onto the balance sheet, such as the Task Force on Climate-related Financial Disclosures (TCFD) – a way to improve and increase reporting of climate-related financial information.
“The UK has indicated that it’s going to make the TCFD mandatory – and the US may well go down that path as well. So there’s a momentum building up around this. And I think it’s the right thing to say, ‘Listen, guys, this is coming down the tracks, we need to prepare for it.’”
She points to Walmart, which once “epitomised the rise of the mom-and-pop entrepreneur, small-time America making it big. In the late 20th century, it was all about supply chain management and outsourcing everything to China, paring everything down to the bone in the name of efficiency and just going for profits at all costs. And it got a lot of criticism for its environmental and social footprint.
“Then in about 2005, it switched tack: it hired a chief sustainability officer. And this snowballed, to the point where Walmart has an incredibly extensive programme not just to measure its own internal carbon emissions, but those of all of its suppliers and customers as well. It’s going back to all the little companies in Asia that serve it, and saying: ‘This is what we want you to do. And by the way, we’re not going to buy from you unless you actually start changing your carbon footprint.’ Walmart would never talk about embracing anthropology. But that’s really what it’s doing. It’s saying: ‘I want to look at our footprint in a wider sense, and talk about all the things we weren’t talking about before.’”
Tett, who describes herself as a born optimist (“there’s more optimism in my pot than pessimism”), sees us emerging from this period more enlightened than before. “One of the reasons I love anthropology is that it’s actually an incredibly optimistic discipline,” she says. “There are masses of people out there who live in a gazillion different ways and, more importantly, have a gazillion different ways of looking at the world. And you can say, ‘I want to fight them, or ignore them, or crush them or disparage them’, which is what we do a lot of the time. Which is crazy in a globalised world.
“The pandemic has shown that we are all exposed to other people. What’s really important, however, is to remember that, post-pandemic, we can change. We don’t have to live the way we used to. Our world may be digitised and data-based, but humans are not robots, but rather gloriously contradictory, complex, multi-layered beings. In a world shaped by one AI, artificial intelligence, we need a second AI, too – anthropology intelligence.”
Anthro-Vision: How Anthropology Can Explain Business and Life (Random House Business, £20) is available now.