RegulationAccounting StandardsProfile: Aubrey Joachim – CIMA president

Profile: Aubrey Joachim - CIMA president

FDs must get out of their ivory towers and take a share of the blame for the global financial crisis, says Joachim

Aubrey Joachim seems to be a man most at ease when standing in front of a
PowerPoint slide. CIMA’s Sri Lankan-born president is standing in front of a
particularly bright panel, with 11 boxes, five colours and more arrows than a
Parisian subway station.

“When people talk of risk they always think of a catastrophic failure,” he
says, gesticulating at the chart during the institute’s annual conference.
“But, then again, airlines can crash, metaphorically.”

Joachim likes a good flow chart. It comes as no surprise when he later admits
that he never wanted to be an accountant. In fact, he didn’t even want to work
in finance. Once upon a time his life’s ambition was to become an engineer
“because I wanted to make things happen… I like to see the picture of the
organisation,” he says.

Perhaps a hangover from this dream can be found in his habit of checking
behind office doors for a hard hat, safety shoes and tabard, believing that
financial management is not something that can be achieved sitting behind a

“If you don’t have hard hats and safety boots in your office, how do you know
what’s really happening out there?” he asks. “I’ve always been a finance manager
that’s been out there in the field. I love what’s happening outside… whatever
we do is only what is happening out there ­ we are just putting it in numbers.”

In former roles he’s inspected oil rigs, challenged partners in multinational
companies and even faced down government ministers. These days he spends his
time touring the world, preaching his motivational brand of risk management
philosophy and heading up one of the most prominent global brands for management

And for someone who spends most of his time explaining how to plan for the
worst, he’s disarmingly frank when asked about the reality of corporate risk.
“You cannot avoid risk,” he says.

“You can throw a lot of money at it, but not with all risks, because they are
unknown ­ all you can do is have alternatives… Why does a 747 have four engines
if it can technically fly on one?”

His audience today numbers 19. But among them are senior figures from
pharmaceutical companies, high street retailers, global banks and other billion
dollar companies. At least three of the FTSE 100 are represented.

The atmosphere in the basement-level room in Pimlico is somewhere between a
church and a boardroom, with each audience member nodding in agreement as
Joachim lectures. Occasionally there’s even a confession.

One middle-aged trader, lounging at the back of the room speaks up when the
discussion turns to the banking crisis. “I think you will find that the risk
measurement doesn’t keep up… with what the front office is doing,” he says.

Joachim looks down at the man with something close to sympathy. “We are now
appreciating that we have to look at everything from a risk context,” he says.

He is a man well-versed in the language of corporate risk and has a seemingly
endless supply of anecdotes he can pull out to illustrate complex points. “I was
working in Dubai with the biggest engineering company in the region. I joined
from Sri Lanka in 1982 with a young family and I was handling all these huge
capital expenditure programs,” he explains.

“There was one program where we were buying 35 crawler cranes and I walked
into the controller’s office and he asked ‘how is the project going?’ and I said
the cranes have come and he said ‘how do you know that’ and I said ‘I walked
through the yard’.”

Seeing is certainly believing for Joachim, who thinks risks can only be truly
understood by on-the-ground experience. It is the topic on everyone’s lips since
the financial crisis. He remembers watching the rise and rise of world capital
to dizzying and implausible heights, blinding financial institutions to the
possibility of disaster. He has spent the last twelve months sorting through the
debris. “Have you heard of the DKDK syndrome? ‘You don’t know what you don’t
know’ syndrome.”

DKDK is Joachim’s way of explaining what happened in the crisis. When it’s
suggested that perhaps an alternative expression ­ you don’t want to know what
you don’t know ­ might be more fitting, he smiles and nods.

“For years and years finance directors saw healthy balance sheets and never
questioned whether it was sustainable,” he says.

There’s a frank honesty to his answers and, while he will stand his ground on
some issues, he won’t shy away from criticism either. In the wake of the crisis,
as blame was being dished out to all the various sectors of the financial
services, accountancy was not spared. Only last month, The New York Times’ chief
financial correspondent Floyd Norris wrote a column under the headline
“Accountants Misled Us Into Crisis”.

“The accountants let us down,” Norris wrote. “That is one of the clear
lessons of the financial crisis that drove the world into a deep recession.”

It was finance managers’ confidence, or a lack of confidence, in Joachim’s
view, which kept them silent as the risks kept piling up during the crisis.
“Have we to take part of the blame for not having done anything? I certainly
think so,” he says
“The view of a lot of people is that finance directors didn’t do enough or
didn’t have the opportunity to do enough.”

Joachim is a man that should know a lot about risk. Between 1994 and 2005 he
headed up a national water agency on the driest continent on the planet at a
time when it was suffering an estimated once in 1,000 years drought.

Joachim’s nine years at the Sydney Water Corporation, in Australia, saw him
play the role of financial rain man trying to anticipate and plan for poor rain
fall. The role also meant he had to confront his masters with a few inconvenient
truths. When Sydney was faced with long-term weather forecasts that promised
little rain, Joachim’s risk management solution was to build a politically
unpopular $4bn (£2.1bn) desalinisation plant. “I used to hear the talk-back
radio. It was very controversial, but you had to have that in place. We were in
a dry continent, we needed some mitigation.”

Since taking the top job at CIMA in June he’s been on a crusade to get
management accountants out of the office and into the boardroom.

He dreams of a future when table thumping management accountants play a
central role in strategic decisions rather than hiding in their “comfort zones”,
producing numbers, handing them over and going home.

“Many finance people are reluctant to walk into that board room, walk into
that meeting because, if they are asked a question, they might be found wanting.
They should get over that,” he says.

He recalls another anecdote, the seventh so far in the conversation, which
took place 30 years ago when he was tasked with filing weekly pricing reports
for Unilever, the company behind brands from Ben and Jerry’s to Bovril.
Suspecting that no one actually read his reports, a mischievous Joachim decided
to glue the pages together. “Next day the report came back and the pages were
still pasted,” he says.
“I walked into the financial controller’s room and said, ‘boss what’s the
meaning of this? Why am I wasting my time? Is anyone even using this?”

But his fiery brand of management accounting brings its own risks.
Realistically, he’s asked, should accountants put their job on the line because
of a principle?
“At a low level you can make a difference. This is what we want bold financial
officers to do. We want bold financial professionals to challenge things… We are
no longer in ivory towers, we need to be out there,” he says.

“That is what is lacking today.”


Aubrey Joachim’s path from junior accountant to CIMA president has been
signposted with achievements and challenges. Born in Sri Lanka of Portuguese
descent, Joachim is now an Australian citizen and attained fellowship status
with CIMA in 1988.

He is a committee member of the New South Wales’ CIMA outpost and, since
1998, has been on the CIMA’s Australia National Council. Joachim has been
appearing at conferences since 1997 and has also worked as a finance trainer for
the Australian Institute of Company Directors and has regular articles in
professional journals for the Institute of Chartered Accountants Australia, CPA
Australia and the National Institute of Accountants Australia.

Upon taking the top job at CIMA in June this year Joachim said the challenge
for the profession is to remain relevant. “As the only international
professional accountancy body with a sole focus on business, we are certainly
that, but we must ensure we continue to build on our relevance to all our
current and future stakeholders Ð members, employers, students, potential
students and all those with whom the institute hopes to interact in the future,
both in established and new markets.”

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