PracticeAuditFinancial Power List 2003

Financial Power List 2003

Following a tumultous year for the financial world, Accountancy Age identifies the 50 people who will dominate headlines this year.

1. John Tiner

FSA managing director

John Tiner, one of the FSA’s most senior managers, is favourite to succeed Sir Howard Davies as head of the UK financial regulator. By a mile. A former managing partner at Andersen’s global financial services industry group, Tiner has, according to observers, been groomed for the top job.

Indeed he has been given some plum tasks at the FSA. As managing director of the consumer, investment and insurance directorate, his is a key post as this has given him control of developing a new regulatory framework for the insurance and pensions industry. This is crucial given the growing shortfall in pensions savings and the recent failure of companies such as Equitable Life. Tiner is one to watch because the City is praying that if he takes over, he’ll do just as good a job as Sir Howard Davies.

2. Melanie Johnson
Competition minister

Melanie Johnson was last year thrust into the spotlight of UK business in the wake of the accounting scandals and corporate collapses in the US. Her position on the government’s coordinating group on audit and accounting – swiftly established following Enron and WorldCom and due to report its findings this month – has increased her influence over the future of the industry. And it does not end there. This year will prove a very busy one given her lead role in reforming the UK’s antiquated company law. And if she is promoted to the cabinet – as has been widely mooted – accountants will want to ensure she doesn’t take bulky negative baggage with her.

3. George Bush
US president

Bush has his critics and his influence is often questioned amid claims that it is his kitchen cabinet that wields the real power. But it is on two fronts the US president will make his presence felt on the UK accountancy community. If he does pursue a war with Iraq, the economic impact across the globe would be considerable, not least in terms of share prices, oil prices and exchange rates. And given the disastrous year that US corporates have endured (in many cases of their own making, it should be noticed), the Bush administration will act to prevent further corporate scandals happening. And as the controversial Sarbanes-Oxley Act has proven, those rules seem to have a nasty habit of crossing the Atlantic.

4. Derek Higgs
Investment banker

The veteran investment banker was appointed to review the role of non-executive directors on the boards of UK firms, an area that has quickly become the focal point for likely corporate governance reform in the UK.

Higgs spent last year compiling information on how arrangements work currently and is set to release his report and recommendations on how non-execs should behave in the future. The shake-up could include limiting the number of non-executive roles a person can hold to five and increasing the responsibilities and liabilities of the role. He has hinted that there will be no radical reform of corporate governance, but nevertheless his findings could still put a number of important noses out of joint.

5. John Connolly
Deloitte & Touche’s UK senior partner

Connolly last year made his name when he snapped up offices, partners and staff of collapsed rival firm Andersen – thus becoming the boss of Accountancy Age’s 2002 personality of the year, former Andersen senior partner John Ormerod. Connolly also represents the UK branch to worldwide firm Deloitte Touche Tohmatsu as a member of its international board of partners. He is chairman of D&T’s corporate finance and managing partner for its assurance accounting & advisory practice as well as leading the UK’s number two firm.

6. Peter Wyman
PwC partner and ICAEW president

Wyman was the first to stick his head above the parapet and defend UK accountants after the events that led to Andersen’s collapse.

And he consistently kept the UK on the international agenda, blowing the trumpet for its effective rules and system of self-regulation. Last week, for instance, he rushed to the US to slap the SEC on the wrist, demanding a three-year moratorium on tough new US auditor independence rules for non-US companies and their auditors. He will step down as ICAEW president in June 2003, to be succeeded by David Illingworth. But his influence will not end there. It is Wyman more than anyone who has acted as a brake on more radical reform of accountancy post-Enron.

7. Chairman
US Public Company Accounting Oversight Board

Whoever replaces William Webster as head of the Public Company Oversight Board faces an unenviable task. The new chair will have to ensure the freshly formed auditor watchdog meets a daunting brief: restoring investor faith in public companies and their accountants, following the disasters at Enron and WorldCom and the involvement of Andersen. Chief accountants at the SEC, which set up the PCAOB last year, have already stated the consequences of failing to do this would be devastating to US markets, while impact on world financial centres would be keenly felt. Whoever gets the job will also pocket the not inconsiderable sum of £350,000 a year for his or her trouble.

8. Chris Dickson
Executive counsel of the JDS

Two cases of huge importance will hit the financial press this year and both will be the responsibility of Chris Dickson, executive counsel of the Joint Disciplinary Scheme. The well-respected ex-barrister will investigate the role UK chartered accountants played in the Enron debacle, particularly former director Lord Wakeham, as well as Ernst & Young’s role in its audit of Equitable Life. Dickson is charged by both the ICAEW and ICAS with maintaining good practice among UK chartered accountants. In the present minefield of corporate and financial scandal, it is a role of immeasurable importance. However, he has a fight on the home front too: the future of the JDS is by no means certain.

9. Sir David Tweedie
Chairman of the IASB

The International Accounting Standards Board chairman has a very busy year ahead of him. In the next 12 months, Tweedie’s organisation will unveil plans for changes to standards in financial instruments, leasing and pensions, all of which are controversial. Tweedie will have to remain strong against any backlash against these measures while still standing firm over the issue of share options. This faced strong opposition when the exposure draft was published last year and opponents will fight tooth and nail to prevent a full standard being published this year. If past skirmishes are anything to go by, the former UK Accounting Standards Board chief will relish the battle.

10. Rosemary Thorne
FD of Bradford & Bingley

Rosemary Thorne can boast a long and illustrious list of business qualifications and experience.

Besides being one of the very few female finance directors of a FTSE-100 company, Thorne is also chairman of the technical committee of the Hundred-Group of Finance Directors, one of the UK’s most influential industry bodies. She also sits on both the Financial Reporting Council and its subsidiary the Financial Reporting and Review Panel. As part of the Higgs’ review into the role and responsibilities of non-executive directors, Thorne was chosen by Derek Higgs to use as part of his research given her experience as a non-exec. Her influence will only grow over the next 12 months.

11. Mike Rake
KPMG international chairman

2002 has been a turbulent year for Mike Rake. On one hand, he became chairman of KPMG International, giving him more international influence.

On the other, he lost the bidding for Andersen’s UK offices to John Connolly of Deloitte & Touche. D&T consequently grew to second-largest Big Four firm, downgrading KPMG from its long-guarded position to third place.

But Rake refrained from teeth gritting, saying he ‘wished Andersen partners well’.

12. Gordon Brown
Chancellor of the exchequer

The economy may be in a downturn but chancellor Gordon Brown still retains an air of relaxed confidence and determination. Prudence remains his buzzword.

Most FDs polled in November by Accountancy Age have more faith in Brown seeing us through troubled times than anyone else. But following his pre-Budget report, many UK businesses said they believed the chancellor’s growth targets for the next year are unlikely to be met. His next test will come in April with the Budget.

13. Scott Sullivan
Ex-WorldCom finance director

As one half of the infamous WorldCom ‘Scott and Bernie Show’, Scott Sullivan could find himself in rather less glamorous surroundings than the $15m (£9.3m) Florida mansion he built himself last year. For Sullivan, the once touted financial wonder-kid, could find himself breaking rocks with some of the US’s finest. Facing a prison term of up to 65 years, Sullivan has experienced a spectacular fall from grace. That would not be an ideal image for the accountancy business.

14. Tony Supperstone
London chair of R3

As London chair of R3, the manner in which Tony Supperstone leads the organisation, which represents the insolvency profession in the UK, could have a major impact on the future of British football clubs.

With more clubs certain to fall into the hands of administrators, the advice R3 gives members and the government could influence how football clubs are run in the future, and how creditors are treated. In addition, Supperstone is also the national head of business recovery at BDO Stoy Hayward.

15. Colin Reeves
Head of the Accountancy Foundation Review Board

One-time NHS FD, Colin Reeves is now head of the Accountancy Foundation Review Board. This is the arm of the new regulator charged with monitoring whether the regulatory system is working in the public interest. Since the start of a government review of accounting regulation, Reeves has been at the centre of this effort. He has the ear of the DTI who will be relying on him to tell them like it is. But misjudge it and But misjudge it and Reeves could inadvertently risk persuading the DTI to scrap the Foundation and start again.

16 Patricia Hewitt
Trade and industry secretary

Hewitt has found herself leading a type of accountancy ‘pre-crime’ police force over the past 12 months. Hewitt’s modus operandi, much to the relief of the UK industry, has been one of caution. She ensured in the wake of Enron, that the UK government would make no knee-jerk reaction. But she has never tried to deny an Enron could occur in the UK. ‘It would be crazy to say it can’t happen here,’ she told BBC Radio Four’s Today programme in the summer. She is due to report her findings over the next few weeks.

17 Nick Dargan
Administrator to ITV Digital

You might have missed it in the Enron melee, but there was another financial story last year: the funding crisis forcing many football clubs to forgo centre forwards in favour of administrators. From Leicester to Scarborough, Barnsley to Port Vale, the collapse of ITV Digital has taken its toll. Consequently, Deloitte’s Nick Dargan (administrator to ITV Digital and currently in negotiations with the Gary Lineker consortium over the sale of Leicester) has seen his profile shoot up. With football’s suspension of financial unreality continuing, Dargan’s influence over the next year will only grow.

18 Karel Van Hulle
Head of EC unit for financial reporting and company law

Van Hulle was one of the three men behind an EC proposal last November for a package of measures to prevent an ‘Enron debacle’ in Europe. His is the voice of the European Commission on the International Accounting Standards Board. He also chairs EC meetings of the accounting directives contact committee and the accounting advisory forum. And his growing influence over standard-setting in Europe will become more apparent as the year goes on.

19 William Donaldson
SEC chairman

The successor to Harvey Pitt as chair at the US Securities and Exchange Commission must know from his predecessor’s experiences that the role will present no small challenge. Implementing and enforcing the Sarbanes-Oxley Act will be one of the main priorities of the job and possibly one of its toughest challenges. The former chief executive of the New York Stock Exchange will have his hands full when he eventually takes over from Pitt later this year.

20 Kieran Poynter
PwC senior partner

As senior partner of PricewaterhouseCoopers, the UK’s biggest accounting firm, Poynter will play a major role in ensuring the profession rebuilds its reputation for integrity and honesty. In addition, his views on such issues as auditor rotation and independence could influence future policy decisions by regulators. At the same time, he must lead PwC, as it and the other members of the Big Four fight off threats from mid-tier firms, who are looking to gain ground on the traditional auditing powerhouses.

21 Louise Brittain
Baker Tilly partner

A small packet of dynamite, Brittain has made her name handling some of the UK’s most high-profile personal bankruptcies. Among those who have felt her wrath are controversial historian David Irving, disgraced former MP Neil Hamilton and former cabinet minister Jonathan Aitken. Last year she was appointed trustee in bankruptcy to ’60s pop star and entrepreneur Adam Faith, and this year more household names are likely to come under her control.

22 Nick Land
Chairman of Ernst & Young UK

Land never fails to impress. Under him, E&Y’s consultancy was sold, earning the firm’s partners a fortune. It was the first to become an LLP and was at the forefront in the drive for accountancy firms to publish their own annual results. The fact is, however, that the movement of Andersen staff under the Deloitte & Touche umbrella has pushed E&Y to the number four position, well behind competitors. Land’s reaction will be one to watch this year because there are fewer ‘big’ prestige firms to compete with and it is not yet clear how this has changed market conditions. But Land is a fighter and cool under pressure.

23 Paul Volcker
International Accounting Standards Committee Foundation chair

Paul Volcker sees himself as a champion to good practice within the accounting world. Following a year of financial scandal, Volcker sees it as essential that the industry improves confidence and acts in the public interest to maintain reliable financial reporting. It is a valid and obvious point, but one that will demand all his attention this year.

24 Mary Keegan
ASB chairman

Keegan has now stamped her mark on the UK Accounting Standards Board, at home and on the global stage. And while international accounting standards will bite for all European listed companies in 2005, Keegan’s rule will be law for the next couple of years. She must fight her corner to ensure IASs are at least as effective as UK rules while coping with a hostile domestic business community angered by the effects of FRS 17 on their pensions funds. With changes to the accounting treatment of financial instruments on the horizon, there will be no let up in the controversy.

25 Harvey Pitt
Acting chairman of the SEC

Pitt left his mark on US accountancy during the outbreak of scandals such as Enron, WorldCom and Tyco. Over 15 months of unprecedented turmoil for the SEC, Pitt was criticised for mishandling the Enron situation, faulty judgement in dealing with KPMG, not to mention the controversial appointment of William Webster. Pitt resigned last November but is still acting as SEC chairman for the time being.

26 Ian Brindle
Deputy chairman of the Financial Reporting Review Panel

Brindle is looking to see whether the reforms of the panel currently under consideration are attractive and achievable. The government wants the FRRP to take a more proactive approach in rooting out corporate fraud and is considering giving it powers similar to those enjoyed by the US SEC. As chair of the co-ordinating group on audit and accounting issues, Brindle will put forward specific proposals over how the beefed-up organisation will run.

27 Peter Cussons
International corporate tax partner at PricewaterhouseCoopers

Cussons sees the influence of the EU in UK tax affairs as greater than the UK has itself. With more cases going to the European Court of Justice, and the implications this has for multinationals able to reclaim tax, he is probably right. This year will see several UK multinationals taking advantage of this, and Cussons will be in there advising many of them.

28 Sir John Bourn
Comptroller and auditor general

Government departments must tremble at the mention of Sir John Bourn, the country’s comptroller and auditor general, and the man who heads up the Whitehall spending watchdog, the National Audit Office. Sir John has been responsible for highly critical reports into the activities of Customs & Excise, Ministry of Defence and the Treasury to name a few. 2003 should see Sir John gain greater access to the accounts of government and public bodies, as he continues to wield considerable influence as chair of the Review Board.

29 Simon Whitehead
Microsoft UK

Simon Whitehead enters 2003 knowing that this is the year that Microsoft UK must start to deliver. Not least because one of its products – its CRM solution – has been delayed time and time again. Currently due in the autumn of this year, Whitehead must ensure delivery or start to look very silly. He must also work to bed down the recent acquisitions of Navision and Great Plains so that the company looks united and whole. This could take some tricky footwork but bosses back in the US expect.

30 Bob Herz
Chair of US standards setting board

Former board member of the International Accounting Standards Board, Bob Herz now holds the influential post of chairman of the US standard setting board, FASB. Most non-US standard-setters consider Herz to be the only man able to convince US business and regulators to get rid of its huge rulebook and adopt a single set of internationally recognised accounting rules. Herz, also senior partner at PricewaterhouseCoopers, has already signalled his support for principles over rules.

31 Graham Wylie
UK managing director of SageHaving entered the FTSE-100 in 1999, by the end of last year, Sage was clinging on by its fingertips. Given that it is the only pure technology stock left on the index, that’s no mean feat. A lot of credit for that goes to Wylie, one of Sage’s founders. Managing director of Sage’s businesses in the UK and Eire, it falls to Wylie to see off the Microsoft assault on the UK market.

32 Richard Broadbent
Customs & Excise chairman

As chairman of Customs & Excise, Broadbent is facing a similar 2003 to Sir Nick Montagu. His no-nonsense style of management and reform is needed in a department he has conceded to be dated and out of touch. The next 12 months will see a great deal of modernisation, and clampdown on VAT avoidance.

33 Peter Williams
Finance director of Selfridges

Williams, who takes over as chief executive next month, is a man who loves his job. He should do. He’s been with the store since 1991 and played a major role in persuading its old board to spend money on a massive revamp which essentially transformed the fortunes of what is one of the UK’s most famous retailers. He has wanted the top job for some time and some say it is not before time. Williams is described as a retailer who can do the numbers, rather than an accountant in retail, and as such, has immense respect. This year he’ll be a chief executive to watch. After what may have been a disappointing Christmas and signs of flagging consumer spending, Williams will have his work cut out making sure his stock remains high.

34 Ken Rushton
Director of listings at the FSA

This is the man responsible for overseeing the comprehensive review of UK listing rules. This long process, and one not undertaken for a good few years, has already taken up vast amounts of his time and will do so this year and next. He is also subject to pressure from external forces. Recently, the Auditing Practices Board asked for reviews of interim results to be included in the rules, and probably won’t be the last body sticking its finger in the pie.

35 Stephen Jones
Director of IR Large Business Office

Sir Nick Montagu can not stop going on about the evils of tax avoidance and morality of paying your tax. At the heart of his proposals to clamp down on such practices is the Large Business Office, which looks into the affairs of large or complex companies. As director of the LBO, Stephen Jones has an army of specialist investigators who are ready for and, it seems, relish the challenge of getting to the bottom of any remotely dodgy schemes. Watch Jones’ progress this year.

36 Richard Fleck
Auditing Practices Board chairman

Coming in as replacement to Ian Plaistowe as chairman of the Auditing Practices Board at the beginning of the year, Fleck needs to stamp his authority on the body. The subject of audited interims has already raised its head this year and Fleck will need to continue pressure on the FSA as it updates listing rules if it is to be successful in making this mandatory. The Accountancy Foundation is also under review at the moment and the APB could find its role radically altered this year, something that could prove quite a challenge to a non-accountant.

37 Nick Montagu
Inland Revenue chairman

Sir Nick Montagu has led an unprecedented amount of change at the government body since 1997. He is renowned for his determination, focus and gusto and continues to reinforces these characteristics in the Revenue’s approach to the continued clampdown on tax evasion and avoidance. He is on a tax morality crusade. This year will prove a difficult one in light of the recent judgements by the European Court of Justice in favour of the taxpayer.

38 Tony Sarin
Numerica chief executive

Tenon may have been the first, but it is Numerica that has emerged as the most active accountancy consolidator, buying up firms up and down the country. Led by the immaculately turned out Tony Sarin, the firm has gone from a very traditional accountancy model (you will remember it as Levy Gee) to a future-looking professional services firm complemented by an independent audit division, AV Audit. Sarin is a passionate believer that this model represents the future of the accountancy business.

39 Sir Howard Davies
Chairman of the FSA

The news that Davies was set to leave the FSA to head the London School of Economics sent shockwaves through the financial and accountancy worlds. His decision was generally perceived as a blow to the FSA, though not everyone backed his regulatory approach based on principles such as reasonable behaviour. Sir Howard’s planned September move awaits confirmation by the LSE court of governors. One of his tasks will be to manage fundraising, targeted at £100m by July 2005.

40 Lord Gordon Borrie
Accountancy Foundation chairman

The former consumer champion chairs the Accountancy Foundation, which is subject to a review by Patricia Hewitt. Despite its recent formation, there have already been calls from several institutes and members of the Big Four accounting firms to scrap the current set-up and create a new accountancy watchdog. Lord Borrie looks like he might have to fight tooth and nail to keep things the way they are or face overseeing a crumbling empire. Alternatively he might just opt out of it all.

41 Carol Sargeant
FSA managing director

As managing director of the FSA regulation and risk division, Sargeant takes the lead in clamping down on money laundering. Her influence consists of hammering down to reluctant City bank managers that they must have procedures in place to ensure they comply with stringent money laundering regulation. Sargeant recently fined the Royal Bank of Scotland based on flawed procedures, without proof of money laundering having taken place.

42 Alan Reid
Keeper of the privy purse

Taking over the mantle from fellow KPMG man Sir Michael Peat, Alan Reid takes charge of handling the Queen’s finances, under the royal title of keeper of the privy purse. Reid will be hoping to keep a low profile this year by keeping the Queen’s spending and shopping plans out of the tabloids, and steering clear of some of the financial scandals that have hit Buckingham Palace in the past. This could be difficult, as he will be tasked with compiling the accounts for the Queen’s civil list, now an annual requirement, including details of her spending in key areas.

43 Robert Wardle
Director of the Serious Fraud Office

If your name is mentioned in the same sentence as ‘fraud’ and Robert Wardle this year, be very afraid. He succeeds Ros Wright as director of the Serious Fraud Office and will be out to make his name. Wardle has been with the SFO since 1988 when it was founded, is clearly committed and was tipped for the top job early on. Wright will be a tough act to follow. She berated accountants and lawyers for not helping more in the fight against money laundering and there’s no expectation that Wardle will take a softer approach.

44 Marta Andreasen
Whistleblowing EC chief accountant

European Commission’s chief accountant Marta Andreasen was suspended following a series of allegations about its accounting systems last year. The commission suspended Andreasen from her job after she refused to sign off accounts for 2001. She claimed she could not sign them off due to concerns about alleged shortcomings within the commission’s accounting system and now faces disciplinary hearings. No doubt she’ll hit the headlines again this year – possibly in the unlikely guise of a Tory MEP.

45 Digby Jones
Head of the CBI

Ladies and gentlemen, we give you her majesty’s opposition. With the Conservative party in disarray, it’s not too far-fetched to suggest the most effective critic of the government (on business and economic matters at least) has been Digby Jones. As head of the CBI, the former KPMG corporate finance specialist has scored plenty of points by accusing the government of imposing a suffocating amount of red tape on UK plc. When late last year he accused ministers of upping the business tax burden, you could see the steam rising from the Treasury’s ministerial suite of offices. Sensing blood, Jones will be looking to land a knockout blow.

46 Frits Bolkestein
EC commissioner markets and taxation

Bolkestein last year was noted for opposition to the Sarbanes-Oxley Act and his efforts to establish international accounting standards. Nevertheless, he firmly believes an international standard would ‘not be worth much unless it is backed up by effective enforcement’. Hence he enthusiastically lobbies for a European super regulator. Last November, together with Karel van Hulle, he was one of the three men behind an EC proposal for a package of measures to prevent an ‘Enron debacle’ in Europe.

47 Andrew Pinder
Government e-envoy

The government’s e-envoy could become a much-maligned position. Pinder is responsible for getting all government services online by 2005, and at the moment this looks like being a long way from achievable. Online self-assessment tax forms was supposed to be one of the flagship projects on the way to 2005 but is still suffering from low usage and technical problems. This year’s performance will have to be better.

48 Dawn Primarolo
Paymaster general

Quiet but impressive, Primarolo faces an exciting year with the prospect of promotion not out of the question. She has taken a key role in recent banking secrecy debates, and is extremely vocal when it comes to tax evasion. But she is somewhat stuck between a rock and a hard place. She also figures strongly on the tax law rewrite committee.

49 Michael Howard
Shadow chancellor

As shadow chancellor, Howard has been, naturally, one of Gordon Brown’s fiercest and most outspoken critics. Following last November’s pre-Budget speech, when Brown’s handling of public finances came under scrutiny, Howard went so far as to accuse the chancellor of ‘Enron-style accounting’ and of creating a ‘black hole’ in the country’s accounts. This year Howard will be back on the attack, looking to probe any of Brown’s perceived weaknesses. He is also, of course, said to be eyeing the job of leader of the Conservative party.

50 Sir Michael Peat
Prince Charles’ private secretary

If ever an accountant found himself stuck with a task he’d rather not have, it would have been Sir Michael Peat towards the end of last year. After serving faithfully as keeper of the privy purse, the Queen’s finance director, he became private secretary to Prince Charles. This plunged him into investigating and trying to calm things down around the Paul Burrell rape allegations. If Charles goes through another bad year, you can bet Sir Michael will be at the heart of it trying to keep a lid on things. again

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