Awards 2007: Outstanding Industry Contribution

AA Awards

Winner: Sir Mike Rake

Sir Mike Rake, former chairman of KPMG International, former senior partner
of KPMG UK and now chairman of British Telecom, takes this year’s award for
outstanding industry contribution for his long stint at the top of the
profession and for the significant role he played in determining the future of
the profession, while leading one of the world’s four biggest firms.

Rake moved to BT this year after a 35-year career at KPMG. He joined the firm
when it was Peat Marwick and stayed with it through all its mergers until it
finally reached its position of number three in the world.

After joining in 1972, Rake moved to Europe, where he ran the audit practice
in Belgium and then in Luxembourg.

He moved to London in 1989 and became a member of the UK board in 1991 where
he won a number of leadership roles before becoming UK senior partner in 1998
and then international chairman in 2002.

During his time in charge he will be remembered for his efforts to merge with
Andersen in the UK, as the firm collapsed internationally following the Enron
scandal. That attempt ended in disappointment and Rake has since expressed his
regret that he took the legal advice not to take on the firm.

However, the episode acted as a springboard, propelling Rake onto a world
stage to play a central role in campaigning to ensure that there was a measured
legislative response to Enron.

He lobbied regulators and politicians across the US, the European Union,
Japan and India. He has consistently made the case for strong independent
regulation, transparency, global accounting standards and strong audit

More recently, he led KPMG through the US tax shelter scandal. He described
the episode as his own ‘personal nightmare’ after the US authorities threatened
to launch a criminal prosecution that could, potentially, have caused a similar
loss in confidence in the firm as that suffered by Andersen.

But Rake was instrumental in making the case that prosecution should be
averted and the firm was fined £250m instead. With this, KPMG’s reputation was
saved, along with thousands of jobs across the world.

Additionally, this act pulled back from an action that could have removed
another Big Firm from the audit market, a outcome that could have caused
regulatory chaos in financial markets as corporates struggled to find audit
services and avoid conflicts of interest.

Rake himself is also proud of the way KPMG took a lead in separating
consulting from audit long before other firms grasped that particular nettle.

Among his other achievements were to make KPMG a lead figure in developing
corporate social responsibility programmes, an area in which the firm has led
from the front in the UK, US and in Europe. He says his lasting legacy is making
KPMG one of the best places to work. The firm is consistently voted one of the
top employers in the country.

The Outstanding Industry Contribution Award is the only award made by the
editorial team at Accountancy Age.

He was described by the team as ‘tough, highly intelligent, a leader who
stood for what he believed in and a man open to discussion and debate.’

Rake wins the award not only for leading the firm through difficult times,
but also for leading it to success and continued growth.

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