The next few weeks could see landmark legislation in the UK. Effectively the government is looking to act to prevent a type of corporate failure that hasn’t even happened in the UK. Yet.
That is a slightly simplistic reading of the Enron/WorldCom situation. But nevertheless there is a sense that UK ministers need to be seen to act as much as anything else before the winds of corporate failure cross the Atlantic.As trade and industry secretary Patricia Hewitt finds herself leading this accountancy ‘pre-crime’ police force.
In a keynote speech last week Hewitt said the government is considering introducing auditor rotation and stripping executive directors of their powers to appoint company auditors in the wake of global accounting scandals.
‘It would be crazy to say it can’t happen here,’ she told BBC Radio Four’s Today programme. The government, as political commentator Chris Moncrieff wrote in Accountancy Age recently, wants to shut the gate to make sure that the second horse doesn’t bolt from the UK stable.
Hewitt of course knows the industry better than most of her ministerial peers. She spent five years as director of research for Andersen Consulting – ‘now Accenture’, as the DTI website is at pains to stress lest anyone confuse her former employer with its discredited former sister. She left to become MP for Leicester West in 1997.
She spent six years as press and broadcasting officer and policy co-ordinator for then Labour leader Neil Kinnock, and spent five years as deputy director of the Institute for Public Policy Research before moving to Andersen.
She was economic secretary at the Treasury from 1998 to 1999 and minister for small business and e-commerce from 1999 to 2001.
A Cambridge graduate, Hewitt has overall responsibility for the Department of Trade and Industry, the Office of Science and Technology, the Export Credits Guarantee Department, and the Women’s Unit. Widely seen as a safe pair of hands, attempts to link Hewitt to the Andersen / Enron scandal have failed. She admitted she attended a business dinner hosted by Andersen and had chaired a seminar hosted by the DTI and Andersen Consulting. But that’s about it.