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ON THE RIGHT: Accounts’ focus on corporate governance

Helen Brand

ON THE RIGHT: Accounts’ focus  on corporate governance

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Should more attention be paid to corporate governance issues?

We see governance as an issue arising everywhere in the world. We can look at many of the scandals that have arisen, the financial crisis itself in 2008, and many things before that and since that, that has really arisen because of bad governance and we think that accounting professionals and ACCA members in particular ought to be at the forefront of understanding and implementing good governance practices to ensure sustainability.

And the core purpose of the profession, which is to deliver public value, so acting in the public interest, supporting economic growth and developing ethical business practices.

It is at the heart of the ACCA’s mission to ensure that that is implemented for the benefit of society as a whole.

I think it has become more important because people want to see more accountability, be that from directors or boards, or from governments themselves, and to have accountability you have to have transparency and a system of governance that enables that transparency to take place.

In 2015 – we did a series of research reports with the Economic and Social Research Council looking at how corporate culture influences the good governance and that was a very interesting series. One of the glaring statistics that came out of that from a global survey we did of our members in the final report was that only ten per cent of the people we surveyed would put rules and regulation at the top of the things that make a difference to good culture.What they did put at the top, over 60 per cent of them, was tone from the top, how leaders lead and their behaviours, absolutely influences the corporate culture and therefore the good governance that takes place within a business.”

So I think that those who are appointing boards, who are setting up corporate governance systems, really need to look at the capability that they are putting into those systems.

And certainly the professional accountant has a set of competencies and professionalism that is going to help any organisation govern itself better.

We survey CEOs, they say that the person who has their ear most now is the CFO, so the chief financial officer has more and more influence on the actions of the CEO and we have quite frequently heard the CFO referred to as the ethical guardian of the business.

So it’s not just about financial compliance, it’s about ethical behaviour. So it’s not just that things are being done but they are being done in the right way and the finance leader in a business is very often now being looked at there.

We think it’s very important to focus on the future of reporting because what you measure often gets managed, and you certainly can’t manage things you don’t measure so the rise of integrated reporting as a new form of corporate reporting is something that we are focusing on and that is where the report of a business combines the financial governance and sustainability information from the perspective of stakeholders and looks at the value that’s being created by a business in the short, medium and long term.

Helen Brand is chief executive of the Association of Certified Chartered Accountants.