The days of making money at any cost are long gone
By Mike McKeon CA, President, ICAS
27 February 2020
Our profession needs to contribute to the health of society at large, as well as to climate rescue and restoration, else it risks being left behind, says President Mike McKeon CA
I was at the Investors’ Forum meeting in January, where a wide ranging discussion was held around shareholder engagement and the ever increasing need to address the environmental, social and governance (ESG) agenda in their investee companies.
The keynote speaker was the Financial Reporting Council’s new Chair, Simon Dingemans, who in his speech, and in a quick chat with me afterwards, confirmed that they will be holding several consultations on the way forward for regulation of investors, companies and auditors, all of which will likely have profound implications for the wider accounting profession and how we go about our business.
Whether you’re an auditor, whether you sit on corporate boards, or whether you’re simply interested in how wider business and markets work, this is going to be a seminal moment in our profession, and we all need to be paying attention. A lot of things are going to change.
As suggested, and most significantly, there has been a sharp rise in interest in ESG impacts on corporate life. The days of “we’ll make money at any cost” are long gone. And anybody who still believes otherwise may struggle to find finance.
Investors, such as BlackRock, the biggest in the world, are now warning they won’t be investing with companies that don’t take ESG seriously.
Look wider and you will also see that young people, in particular, don’t want to work for companies that ignore environmental or social measures, because it is simply their future at stake. But we all need to be contributing to social growth and to the wellbeing of the planet. And this is very real and it is now.
At a recent board meeting of a transport group that I am associated with, we talked about how we are going to change our approach to the procurement of our fleet. Will electric buses be the new norm; will the technology do the job or, quite frankly, do we have to find a way to make it do the job?
All of these things are now genuinely on the agenda. Quite simply, if you don’t believe business bears some responsibility for our social and environmental health today then you shouldn’t be in business.
The UK isn’t unique in addressing this, and we’re not perfect by any means. But I’d argue we’re towards the front of the queue.
And in the profession of accounting and auditing and in terms of corporate governance we still punch above our weight in the world, so what we do matters.
If you don’t believe the environment and society are important you shouldn’t be in business
We’ve looked at the picture and said, “We really should be doing better than we are.”
Politicians can and will talk a lot about this, but some of the key actors in the world are the business communities, including our profession.
We are heading towards a much more enlightened and, dare I say it, rewarding profession than has been the case for the last 10 years.
And it starts with the restoration of trust in business and the auditing profession and regaining that sense of public respect.
That word “respect” is crucial here, because from respect you build trust. Now is a real moment of inflection in our profession. There’s no question in my mind that things are changing for the better.
It’s going to be painful for some – these kind of changes always are – but it’s about making sure we can support our members, future members and each other as the new landscape evolves.
And yes, we also do this in the wider public interest. If you’ve felt a bit down about life as a professional auditor, or in the corporate world, and you didn’t know where things were going, well now is the chance to look up and to move forward.
You can engage with the future and step by step we will rebuild trust in our profession, and in wider business, and once again we will lead the world to a better place.
This article first appeared in the March 2020 issue of CA magazine.