PracticeAuditProfile: David Leather, from airport to audit

Profile: David Leather, from airport to audit

The finance director now leaving from gate 14 is David Leather. The Manchester Airport FD and former Commonwealth Games deputy chief executive describes his experiences in industry and why he's returning to practice.

They say the smell of kerosene gives you itchy feet. So given that he’s spent the last two years working from a fourth floor office overlooking the runways of Manchester Airport, with its birds-eye view of the millions of passengers en route to the four corners of the world – it’s little wonder that David Leather has decided that it’s time to move on.

This ambitious 40-year-old has set his sights on a new challenge, having accepted the offer of a position as audit partner at Ernst & Young, based at the Big Four firm’s Manchester office. At first glance, it seems a rather odd move for someone who’s had his feet firmly planted in industry for the past eight years – initially as finance director and deputy chief executive of the Commonwealth Games and then in his current role at Manchester Airport.

Even Leather admits it’s not a career path he’d envisaged. ‘I had a phone call from a headhunter and I didn’t think I’d be interested, but we went through a process over a number of months, during which time I met a huge number of partners and staff at the firm. The opportunities they were laying before me were very attractive – the variety of the work, developing knowledge of different industries and bringing some of my industry knowledge back to practice.’

There’s also an element of unfulfilled ambition to the move. Leather initially qualified as an accountant with KPMG, spending 13 years with the firm during which time he moved up the ranks to senior manager.

‘I was in my pre-partnership year when I went to the Commonwealth Games for a 12-month secondment. While I was there, they offered me the finance director job and I stayed for six years. The extension of the project diverted me away from my goal of becoming a partner. In a way, going to Ernst & Young allows me to tick another box.’

The experience will also add another string to Leather’s bow, further expanding the diverse experiences and management approaches he’s been exposed to at the Commonwealth Games and Manchester Airport. ‘With the Commonwealth Games, there was no question of the date slipping. Whether you’re in finance or an operations department, you have to do what it takes to deliver on time and to budget, which did mean some personal sacrifices. But it’s a very satisfying thing, particularly if you’re goal-oriented and interested in sports like I am.’

But more than just a highly satisfying personal experience for Leather, the Commonwealth Games also succeeded in bucking the trend in international sporting events, and proved to be huge commercial success too. A post-event report from Cambridge Policy Consultants concluded that it had left a powerful economic legacy, succeeding in regenerating a run-down part of the City, creating thousands of new full-time jobs and attracting Blue Chip employers such as Fujitsu and Wal-Mart into the region.

‘We were able to pass back £14m to the public sector funders – Manchester city council, Sport England and the government. We generated more revenue than we expected – the sponsored TV rights were where we expected but funding to cover contractual risks was not required, due to a very rigorous contracting process with every supplier which meant that virtually none of the projects went over budget.’

Leather admits being one of the first full-time members of the management team and knowing that he was going to be the last person out – and consequently the one left to sort out any potential mess – was an added incentive to make sure things went according to plan. In fact, even though the games finished two and a half years ago, technically speaking, Leather is still the finance director.

‘The company is no longer trading and there are no staff apart from me and the treasurer, but we’re still going through the process of winding it up. Our financial year end is 31 December.’

Leather doesn’t have much opportunity to indulge his sporting interest these days. His hefty workload and some back problems have put stop to too much time playing racquet sports, although he still swims every day.

From the outside at least, the move from the Commonwealth Games to Manchester Airport was a big step. ‘People said “he’s got a real job now”. But finding 10,000 volunteers for the Commonwealth Games, and doing all of that under the media spotlight – it was a fair challenge and I don’t think people realised what was involved.’

But even Leather admits he joined Manchester Airport at a turbulent time. The airport is a key driver for the North West economy, catering for 21 million passengers a year, employing 2,500 people (although 18,000 people work on the site) and with a turnover of £260m, mainly generated by the airport’s retail and car parking revenues.

The boom in no frills carriers may be good news for holidaymakers with an eye for a bargain, but the easyJets of this world have put the airport under increasing pressure to reduce its charges to all airlines. The airport is also being forced by its regulator to slash the prices it charges by 5% a year.

Combined with the growing popularity of regional airports -Liverpool, Leeds/Bradford and even Blackpool, to name but three in the vicinity of Manchester – and ongoing competition with London for longhaul flights, the onus is on devising new ways to attract more people to the site.

‘We have to work harder to provide returns to shareholders. These days there’s less emphasis on aviation prices and more focus on generating other commercial revenues. There are far more specialist retail facilities and better catering so people want to spend more money. We want to make it a more enjoyable retail experience.’

On the face of it at least, there aren’t many comparisons to be made between running a one-off sporting event, and being FD of something the size of a small town, but Leather’s made it his job to inject some new and more dynamic management processes into an organisation that had, in his words, ‘a very public sector way of thinking’.

‘Manchester Airport is a very different organisation to the Commonwealth Games,’ Leather explains. ‘There, we recruited everyone in a very short timeframe. We had to develop a new culture and it was very focused. At the airport, many people have been employees for more than 20 years and have never worked anywhere else. There isn’t the time criticality to delivering projects.’

Developing a culture that is ‘accepting of change’, as Leather puts it, rather than creating that culture from scratch in a new organisation, is an ongoing challenge. ‘At the moment we’re going through a leadership programme to encourage managers to think differently and be more challenging of each other.

‘If I look at my legacy, the focus has changed to being much more commercial with a sharper delivery focus. We’ve also become much more performance-focused and goal-oriented in our appraisals than was previously the case. People used to get pay increases because they’d been in the job for a certain amount of time. I think things have changed a lot in the last two years.’

Leather’s certainly not looking to take all the credit for the transformation at Manchester Airport. Indeed, he says it’s largely down to the influence of his boss, CEO John Spooner, who took the bold step of introducing a new management structure, and a whole team of new managers from outside the sector, of which Leather was just one new face.

If he thought his last few weeks in the job would allow him to wind down before starting at Ernst & Young next month, then John Spooner certainly had other plans. ‘John’s getting all of his holiday in before the end of the financial year, and we’re going through a huge budget-setting process at the moment.’

No doubt there will be a few moments of quiet reflection over the next few weeks as Leather contemplates the next chapter in his already illustrious career. ‘Ernst & Young is number two in the pecking order in the UK but not in the North West. It’s not that they’re going wrong, but mergers have led some firms to be larger than others. It’s part of my goal to change that,’ Leather says.

‘I’ve no intention of disappearing among throngs of partners. My intention will be to take a more active part in the general management of E&Y. I wouldn’t be satisfied being another audit partner. Ultimately I’d like Nick Land’s job,’ he jokes, although deep down you sense there’s an element of truth to the comment.

He’s confident that his experiences in industry will go a long way to forging the all-important customer relationships that business growth will depend on. ‘Having been an FD, I can empathise with clients – I appreciate their needs and the pressures on them.’

Meanwhile, as tension surrounding the likely outcome of London’s bid to host the 2012 Olympic Games mounts, Leather is doing more than keep an eye on progress. In fact, given his career background it’s perhaps no surprise that he was invited to join the London bid’s finance committee. ‘I don’t have a huge amount of time to commit to it, but I have provided my expertise.’

He says that he wasn’t interested in a full-time job on the bid committee. ‘It’s a very different job to running an event. Essentially, it’s about putting together a technically excellent bid, then marketing it and getting the political support. My strengths are more operationally focused.’

And if London won the bid? Leather smiles ruefully. ‘If we won the bid, that would be different,’ he says. ‘It would be very exciting to get involved in some way – I guess in an advisory capacity. I’m quite impressed with what I’ve seen. I think Paris would be very difficult to beat, but we stand as good a chance as anybody.’

Accounting scandals may have taken the gloss off the prospect of a career in accountancy for some people, but for David Leather, who’s spent the past eight years on the industry side of the fence, ‘now is a great time to be going into the profession.’

After a successful stint as finance director and deputy chief executive of the Commonwealth Games, and more recently as FD of Manchester Airport, Leather has decided to fulfil an ambition he first touted as a senior manager with KPMG, and will next month return to the practice world as audit partner with Ernst & Young.

‘Business relies much more on the audit profession today- the combination of IFRS, Sarbanes-Oxley and the fact that audit committees have far more responsibility means that auditors are held in far higher esteem than when I joined KPMG in 1985.’

Back in those days, the pressure on audit fees was such that the quality of audits suffered, Leather says, and audit partners were, he believes, not particularly highly regarded as a result. ‘The perceived value of quality audits is much higher today.’

Leather’s appointment is something of a coup for the Big Four firm but he is the first to admit that his CV probably isn’t typical of his counterparts. ‘When I was at the Commonwealth Games, we went through the 25 years lifecycle of a business in five years – that’s great experience.’

When he steps into his new role in April, he will not only bring with him some impressive experiences but also the ability to empathise with clients – having already worked up his hours on both sides of the fence.

The battle for the best accountancy recruits continues – and both practice and industry are competing head on for the creme de la creme of talent. But Leather doesn’t believe the boundaries between the two are necessarily that marked. ‘I think the training you get as a chartered accountant and the experience you get from spending three years in different companies – you can’t get that sort of experience at such as early age in any other industry.

‘I’m moving back to a more demanding job and a more hectic lifestyle where I’m not tied to my desk – but I don’t see it as a profession versus industry competition.’

Related Articles

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

21h Martin Herron, MHA MacIntyre Hudson
Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

6d Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

2w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

1m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter