Q&A: Baker Tilly International's CEO Francesca Lagerberg on shaping the future of accounting

Francesca Lagerberg, CEO of Baker Tilly International (BTI), is at the helm of a network navigating through a transformative period in the accounting industry.

Recently honoured as the 2024 Accounting Personality of the Year, Francesca’s leadership has been pivotal in driving Baker Tilly’s global strategy and growth. The firm reported record global revenues of $5.2 billion, reflecting its robust performance and expanding influence.

Beyond her professional achievements, Francesca is known for her somewhat unusual hobby of axe throwing, which she discovered through her personal trainer. “Twice a week I go out and run around a muddy field and climb trees and stuff,” she shares, describing her unconventional fitness routine.

This unique hobby not only provides a refreshing break from her professional responsibilities but also reflects her dynamic and adventurous spirit. It’s a testament to her belief in balancing a demanding career with activities that bring joy and relaxation. ”

Evolution of the accounting landscape

Lagerberg’s passion for axe throwing exemplifies her dynamic and adventurous spirit, which extends into her professional life. As the accounting industry has evolved significantly over the past decade, Francesca has witnessed and navigated these changes with the same zest.

“You’ve seen the whole industry explode over the last couple of decades, both in terms of the variety of offerings and the sophistication of client needs,” she remarked. Traditional services like audit and tax have expanded to include a broader range of advisory services “Clients have more sophisticated needs, more complex needs, or just different needs than perhaps was true a few decades ago,” she explains.

Globalisation has also played a critical role in this evolution. “The international element of that, the globalisation, so that individuals might be going my business is predominantly in this country but I’m now beginning to trade with that country or I want to trade with that country,” she says, emphasising the necessity for firms to adapt to the global marketplace.

These industry-wide changes have not only impacted the nature of services but have also shaped careers within the profession – Lagerberg’s is no exception.

“I’ve worked in audit, I’ve worked in tax, I’ve worked in advisory, and been in leadership. It’s given me a career that I would never have expected to have and phenomenal opportunities all the way across the line,” she says.

Despite these opportunities, the profession faces challenges, particularly in attracting new talent amidst an array of career options. As the head of one of the largest international accounting networks, Lagerberg says it is the job of the firms to now ensure that accounting continues to be recognised as a great career path.

Is there a way to win the talent war?

BTI addresses this by offering diverse entry routes, including apprenticeships, which provide opportunities for individuals from various backgrounds. Lagerberg acknowledged the importance of social mobility in the recruitment strategy of the member firms.

“Social mobility issues are massive here. You don’t have to come from a certain type of schooling or a certain area to be able to get in,” she says.  The firms within the network also focus on creating a supportive and engaging work environment.

“You want people to have an experience where they go, ‘Not only am I getting great knowledge and learning, but this is a good place to work,’” she says. This involves fostering a culture where employees feel valued, supported, and able to develop their careers.

Moreover, BTI emphasises the importance of providing early responsibility and exposure to diverse experiences. “As a relatively new recruit, you’re going to get access to interesting clients and responsibilities early on,” Lagerberg shares. This approach not only helps in retaining talent but also ensures that employees are continuously challenged and engaged.

Challenging the Mid-Market Leaders

BTI is positioning itself to challenge major players like BDO and RSM in the mid-market sector. Lagerberg highlights the importance of differentiating through unique service delivery and brand strength. “In the mid-market space, fundamentally everyone’s roughly doing the same thing,” she notes, emphasising that it’s not what they do, but how they do it that sets BTI apart.

BTI leverages its global network and deep local expertise to provide tailored solutions that meet clients’ specific needs. This client-centric approach ensures that the firm can offer the personalised service of a smaller firm with the resources and reach of a global network.

Moreover, the firm focuses on fostering strong relationships with clients, understanding their businesses, and providing proactive, value-added services. This approach builds trust and loyalty, setting BTI apart in a competitive market. Lagerberg explained that providing early responsibility and significant exposure to diverse clients helps attract and retain top talent, which in turn enhances the firm’s service quality.

Additionally, BTI invests in technology and innovation to improve service delivery and operational efficiency. By staying ahead of technological advancements, the firm ensures that it can offer cutting-edge solutions to its clients, further strengthening its market position.

The Power of Brand in Accounting

One of the key strategies for BTI’s success in the mid-market sector is its strong focus on branding. Lagerberg emphasises that accounting firms often underestimate the power of brand.

“We want people to look at the Baker Tilly International network and think, ‘This is a place where I can grow and thrive,'” she says. The network’s commitment to professional development and a supportive work environment is a key message in its branding strategy, helping to attract and retain top talent.

By investing in technology and innovation, Baker Tilly enhances its service delivery, further strengthening its brand position. Staying ahead of technological advancements allows the firm to offer cutting-edge solutions to clients, reinforcing its reputation as a leader in the accounting industry.

Leveraging PE for growth

Firms within the Baker Tilly International network have strategically engaged with private equity (PE) to fuel their growth and innovation.

Lagerberg highlights that private equity investment allows  firms to make significant capital investments in technology, employee benefits, and expansion efforts. “We’re no longer a capital-light industry,” she remarks, noting the necessity of substantial financial resources to stay competitive.

Private equity partnerships offer more than just financial support; they bring strategic insight and operational expertise. “PE houses are brilliant at dealing with your internal processes and helping you get better,” she explains. These partners can help firms build the infrastructure needed for rapid growth, positioning them for long-term success.

However, Lagerberg acknowledges that private equity isn’t suitable for every firm. The decision to engage with PE requires careful consideration of cultural fit and alignment of values. “You need to find the right partner,” she advises, emphasising the importance of a synergistic relationship to maximise the benefits of the investment.

For Baker Tilly in the United States, the strategic investment led by Hellman & Friedman has been instrumental in their ambitious growth plans. This partnership has provided the resources and expertise needed to expand their services and improve their operational efficiency.

Leading with sustainability

Environmental, Social, and Governance (ESG) considerations have become increasingly crucial for businesses, and BTI is at the forefront of supporting its clients in this area. Lagerberg emphasises the importance of ESG, stating, “It’s the right thing to do.”

She explains that many clients are now focused on sustainability, not just because of regulatory requirements but also due to genuine commitment to making a positive impact. BTI assists clients at various stages of their ESG journey. For some, this involves helping them comply with new reporting requirements, such as the EU Corporate Sustainability Reporting Directive (CSRD).

To assist clients, BTI provides tailored guidance and support, helping them to understand the specific requirements of the CSRD and how they can comply effectively. This includes conducting gap analyses to identify areas where current practices fall short of the new standards, developing robust sustainability strategies, and implementing processes to gather and report the necessary data accurately.

Lagerberg noted that proactive engagement with these new regulations not only ensures compliance but also positions companies as leaders in sustainability. “Clients who go early and adapt quickly to these new standards often find that they gain a competitive advantage,” she explained.

Moreover, BTI leverages its extensive experience in sustainability and reporting to provide best practices and innovative solutions. This comprehensive support helps clients not only meet regulatory requirements but also enhance their overall sustainability performance, driving long-term value and resilience.

In addition to compliance, BTI helps clients develop and implement sustainability strategies that align with their business goals and values. This holistic approach ensures that ESG initiatives are integrated into the core operations of the business, driving long-term value and resilience.

Lagerberg highlighted that the network’s commitment to ESG is also reflected internally. BTI continuously strives to improve its sustainability practices, setting an example for clients and the industry. This commitment not only enhances the firm’s reputation but also attracts clients who prioritise sustainability.