Stoy era ends as BDO plots global move

by Alex Hawkes

04 Sep 2008

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Jeremy Newman. BDO Stoy Hayward
Jeremy Newman: BDO has to ‘deal with the name [issue]’

BDO member firms around the world are set to lose their individual firm names, as the global network gears up to take on the Big Four.

The new head of the BDO International network has told Accountancy Age that he intends to reopen the debate about the names of the firms ­ which are different according to which country a firm is in ­ when he takes over the job in three weeks’ time.

Jeremy Newman, who was BDO Stoy Hayward’s managing partner until July of this year, said the network would have to ‘deal with the name [issue]’.

‘I assume [the new name] will be BDO. No decision has been made but it’s a big perception barrier and we have to address it and go to a single name.’

BDO firms around the world are tagged according to their historical firm names, with BDO at the beginning ­ the US branch of the network is called BDO Seidman.

When the name structure was set up, it was thought it might protect firms against liability creep.
The move may now be seen as part of the general move to smooth the firms’ international networks, until now a preserve of the Big Four, but now spreading to the mid-tier.

But it would also involve bringing to an end more than 100 years of the history of the firm in the UK and may prove controversial among more conservatively minded firms. The original AF Stoy firm in the UK was founded in 1902 and became Stoy Hayward in 1932.

In the interview, Newman also indicates that while he thinks it is unlikely that BDO International will move to merge in the way that E&Y has pushed firms together, he wants to foster ties between firms.

Some firms in the network have equity stakes in others, and he plans to increase the ‘mutuality of interest’.
‘We need to be looking at those sorts of arrangements,’ he said.

The network this week announced an investment in its new Indian arm, the Haribhakti Group.

‘BDO Stoy Hayward, the UK member firm of BDO International, will be providing strategic advice and counsel to the new Indian firm and, as such, has made an investment into the business,’ the firm said in a statement.

Newman also spoke of his greatest achievements and regrets,as well as other details of his time at BDO Stoy Hayward, where he took on a high-profile campaign for greater audit choice.

Newman said he decided to take a more public route to achieving his objectives after the Big Four moved to push for liability caps.

Newman was against the move, believing that a liability cap would have been good for the Big Four, but not necessarily for the mid-tier. He believes that the mid-tier would have been crushed by the big firms’, which would have had a global scope and capacity, but a much reduced risk profile.

‘The Big Four have big PR and lobbying exercises. The DTI briefing paper [on liability] had been written by a secondee from a Big Four firm and government policy was influenced by headlines. That was a Eureka moment.’

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