Financial Power List 2013: Big hitters
Accountancy Age is proud to present our rundown of who we think will be the biggest players in accounting and finance during 2013. Do you agree with our choices?
Accountancy Age is proud to present our rundown of who we think will be the biggest players in accounting and finance during 2013. Do you agree with our choices?
1 Lin Homer, chief executive, HMRC
It would be safe to say it has been a baptism of fire for the chief executive of HMRC. Still less than a year in the job, she has had to navigate thorny issues – not least tax avoidance and evasion as well as the upcoming introduction of real-time PAYE. When you consider the storm around ‘sweetheart deals’ hasn’t blown out, you can start to build up a picture of the kind of start Homer has had to deal with.
Despite those controversies, she has ensured the taxman is not seen as a body to be trifled with, having claimed numerous wins against avoidance schemes in the courts and seen the tax gap drop to 6.7% of tax owed.
Having now got her feet well and truly under the table, the coming year is a big one for the Revenue.
2 Margaret Hodge, Labour MP, chair of the Public Accounts Committee
If Lin Homer spent much of 2012 trying to put out fires, Hodge spent a lot of her time starting them as she and her committee sought to hold both HMRC and those engaging in tax avoidance schemes to account.
Over the course of the year, representatives from the finance functions at the BBC, Starbucks, Amazon and Google were all questioned stridently over their tax affairs as public distaste for tax mitigation schemes grew, fuelled in part by the committee’s work. Given the incoming general anti-abuse rule, Hodge can expect another busy year.
3 Simon Michaels, managing partner, BDO
The completion of BDO’s merger with PKF could herald a landmark year for the UK’s sixth-largest firm. The combined entity will employ 3,500 and generate revenues of £400m. In recent years, BDO has lost ground to larger rival Grant Thornton and the deal will go some way to closing the fee income gap with GT. The new business will expand its reach, both geographically and by specialism. With the new firm in a very strong position in terms of mid-market coverage, how its close rivals respond – whether through mergers of their own – will be of great interest.
4 Stephen Haddrill, chief executive, Financial Reporting Council
Following the biggest structural change in the UK regulator’s 22-year history, Haddrill will press ahead with controversial changes to the way the FRC hands out disciplinary sanctions, update financial reporting standards for SMEs, push forward with projects to cut clutter and reduce disclosures in financial reports. But the real test of Haddrill’s stewardship will be his ability to maintain the FRC’s influence at an international level, given the emergence of regional standard-setting bodies.
5 The Competition Commission
The commission’s inquiry into competition issues in the FTSE 350 audit market comes to an end this year. The inquiry is widely accepted by the profession as being forensic in nature and not beset by the politics associated with audit quality proposals taking shape in Europe. The European Commission has delayed its own findings to accommodate the Competition Commission. The final report will shape the audit market in the UK for years to come.
6 Jim Scott, MD accountants’ division, Sage
Payroll software is about to undergo its most radical reform as the country gears up for the introduction of Real-Time Information (RTI) in April. Sage is one of the largest suppliers to businesses and Scott will have to ensure he is at the top of his game in being able to communicate with accountants what the software can now do, when it will be available, and if it is up to code. Following Sage’s announcement it would not provide a full version of new tax software iXBRL just weeks before the implementation date of April 2011, the company’s reputation hangs in the balance this time round.
7 George Osborne, chancellor of the Exchequer
Any chancellor of the Exchequer is likely to feature highly in the Financial Power List, but Osborne’s task is of a different ilk to those of his predecessors. He has to reconcile pressures exerted from both sides of the coalition while simultaneously stimulating business and growth and maximising the tax take at a time of great economic delicacy.
Whether we like it or not, how long this country stays with its austerity programme is largely up to him.
8 Hans Hoogervorst, chairman, IASB
Hoogervorst’s first year as chairman of the international standard setter was punctuated by tetchy exchanges and an increasingly hostile relationship with FASB over delays on adoption of global standards.The decade-long convergence project with the US is drawing to an end, so Hoogervorst’s attention will move to a more multi-lateral standard-setting environment with the creation of a new global advisory board, while pressing ahead with changes to the IASB’s conceptual framework, which underpins every standard it issues.
9 Robin Freestone, CFO, Pearson
As the incoming chairman of The Hundred Group, a discreet but highly influential lobbying group of the country’s top finance directors, Robin Freestone could be described as one of the most influential FDs in the UK. As CFO of Pearson, Freestone will oversee the joint venture between its Penguin Books’ business and German media group Bertelsmann’s Random House businesses, while deciding on the future of Pearson’s flagship business newspaper The Financial Times.
10 Chris Merry, CEO, RSM Tenon
It’s been a turbulent year at the listed accountancy firm, to say the least. However, under newly appointed CEO Merry’s leadership the firm has managed to agree a £93m two-year banking facility to 31 December 2014. Unfortunately, the firm’s last annual financial results showed a £100m operating loss and its first-quarter statement revealed turnover was at the lower end of management expectations. Although management may think the firm is now in shape, Merry has his work cut out – can he stop RSM Tenon suffering Vantis’ fate?
11 Paul Druckman, CEO, International Integrated Reporting Council
The cost of emissions, as well as interpreting the impact of enterprise on society, is growing in importance. Druckman’s global organisation’s working group has released a framework on how to integrate that non-financial data, such as environmental and social economic costs, into financial statements. A consultation on the framework will end in the first quarter of the year with the first version set to reach the market in December.
12 Michael Izza, CEO, ICAEW
Izza’s 2012 was certainly an interesting one, as he courted controversy with his views on tax avoidance which he outlined in one noteworthy blog. He then took it a step further after the ICAEW released guidance outlining that avoidance will be considered a disciplinary issue. Looking ahead, Izza will seek to increase the ICAEW’s reach worldwide, particularly after experiencing slower growth both domestically and abroad than other institutes in recent years. He will also look to develop the institute’s interests in potentially licencing multi-disciplinary practices.
13 Michel Barnier, commissioner responsible for internal market and services, European Commission
This year marks the culmination of Barnier’s radical audit market reforms. The EC has delayed its report until the UK Competition Commission delivers its findings from its own inquiry into audit competition.
Headline proposals include audit-only firms, joint audits and mandatory rotation. The intense lobbying by the profession has come to an end, leaving it to await the final shape of Barnier’s controversial reforms. The real work will then begin, as the proposals are steered through the European Parliament.
14 Simon Collins, chairman and senior partner, KPMG
The third-largest accountancy firm recruited Collins as chairman and senior partner in the first quarter of 2012, succeeding John Griffith-Jones. He’ll have to guide KPMG through a recouping exercise after the firm had one of its toughest years in 2012. In April, human error resulted in all UK staff failing to be paid on time and the firm lost 275 employees in a restructuring exercise at the end of the year. It also announced UK profits fell 13% to £349m from £403m.
15 Richard Murphy, tax debater and founder of Tax Justice UK
Murphy has been among the most vociferous and consistent critics of the UK tax system in recent years, particularly where avoidance and evasion are concerned. He strongly disputes the Revenue’s figures on the tax gap, and as controversy mounted over the tax affairs of the wealthy and big business, he became an increasingly common talking head on television and radio news programmes. The self-proclaimed “lone voice” on tax issues has garnered a substantial following (boasting approximately 15,000 followers at the time of writing) on Twitter, where he will no doubt fiercely debate the tax issues of 2013.
16 Ed Balls, Labour MP and shadow chancellor
Ed Balls is the man tasked with challenging the economic measures proposed and enacted by Osborne and the coalition. His performance in response to the chancellor’s Autumn Statement will not have inspired many, especially after he offered few alternatives to the policies he criticised. How deep Osborne & Co cut and which taxes are raised over the coming year will, in part, be down to how effectively he fights Labour’s corner.
17 John Whiting, head of Office for Tax Simplification and tax policy director for CIoT
Whiting has been among the most eminent names in tax for more than 20 years, and there are few better placed – or, indeed, able – to undertake the task of simplifying this country’s increasingly complicated tax code.
Granted, Whiting is fighting less an uphill battle and more a struggle up a sheer cliff-face, but his input will shape legislative changes to come in tax. Could he help unveil the Holy Grail of merged income tax and NI?
18 Richard Judge, CEO, Insolvency Service
Judge succeeded Stephen Speed in May last year and has faced a torrent of work since his appointment. The government body announced restructuring and at the end of 2012 it was revealed that 50 jobs were to be cut if the service had any hope of tackling a deficit that may hit £7m. Judge will have to manage the upcoming overhaul of the profession, the change which will see the service cease to license practitioners, as well as managing the budget
19 Algirdas Šemeta, EU taxation and anti-fraud minister
Šemeta’s plan to implement the financial transaction tax was not universally adopted by EU states this year, with considerable opposition in the UK, where it was given short shrift by the government. However, he is the man who will lead Europe’s charge against tax avoidance and evasion, with the European Commission set to blacklist countries known to be tax havens.
20 Kath Haines, chief executive, CABA
Haines heads up the benevolent association linked with the ICAEW’s members. What with accountants fighting against the economic tide for several years, the association is receiving an increasing number of calls for help. CABA’s new survey shows that a fifth of respondents don’t feel adequately supported to deal with the pressure and challenges. With CABA sitting on a nest-egg after a big property sell-off, Haines and her team must feel the urge to splash the cash.
21 Martin Goodchild, managing partner, PKF
The head of PKF will see the firm’s brand disappear at the start of 2013 – but that’s not the end of the story. While the firm is subsumed into BDO, Goodchild will still be expected to represent the interest of its staff at board level, despite no longer holding the top spot. A lively character, he will need to take a diplomatic but firm stance to make sure that the merger achieves a cultural fit to achieve financial gains.
22 Sajjad Karim, Conservative MEP and audit reform rapporteur
The British MEP is currently steering the European Commission’s contentious planned reform of the audit market through the European parliament. As the rapporteur – Karim inherited the brief in January 2012 – he has the unenviable task of agreeing a text that is acceptable to the EC and can feasibly be navigated through the entrenched positions of Europe’s policymakers.
23 Richard Pennycook, outgoing Morrisons CFO
Long-standing Morrisons group finance director Richard Pennycook will be in demand when he leaves the company at the end of June to pursue a portfolio career, having announced his departure last summer.
It will be interesting to see which companies come in for Pennycook’s services given his stellar track record as a turnaround specialist. He established his credentials as a fire-fighting FD par excellence as he delivered the seemingly impossible by restoring the City’s faith in Morrisons after its botched Safeway acquisition.
24 Ian Powell, chairman and senior partner, PwC
Last year saw Powell re-elected for a second stint as chairman of PwC. Despite the headwinds facing the profession in the form of stiff competition and reform of the audit market, 2012 was a good year for the world’s largest accountancy firm. Powell’s actions to improve diversity at the firm will set the benchmark for the profession to follow.
25 Ken Frost, serial blogger and HMRC agitator
A long-time thorn in the side of the ICAEW in his blogging capacity, Frost has found that HMRC’s travails have taken up a bigger chunk of his social media efforts. Not that the institute is out of his line of vision, but his probing questions and good contact base make http://hmrcisshite.blogspot.co.uk an amusing and revealing read.
26 Mark Freebairn, partner in the CFO practice at Odgers Berndtson
With economic recovery still in stagnation, there will likely be another round of musical chairs among the nation’s top CFOs. Connected to some of the most prominent finance teams in the FTSE 100, you can be sure that Freebairn will be in the mix.
27 Liz Bingham, R3 vice-president
Liz has more than 28 years’ experience in the insolvency market and was made partner at Ernst & Young in 1986. She’ll need to call on that experience as she represents the profession, as president from April, which is set to go through a huge metamorphosis this year. Among the various developments is the government review into practitioner fees, due out this summer, and the European Commission’s plan to create a European-wide insolvency rule. Bingham will have to keep her wits about her when she takes up the role of president at the trade body, which represents more than 95% of UK insolvency practitioners.
28 Paul George, executive director, conduct, Financial Reporting Council
The FRC is pressing ahead with controversial changes to the way it calculates disciplinary sanctions around negligence and misconduct. With cases investigating Ernst & Young, PwC and Deloitte, it will be interesting to see how George applies the new code should any levies be issued.
29 Steve Varley, UK & Ireland managing partner, Ernst & Young
Varley was ‘chatty’ at the end of 2012, as the firm revealed strong revenue growth in international tax – the AADB’s investigation into its audit work on Lehmans was also closed. But with partner profits down, can the firm find a way to improve its margins – is it charging enough? Does it have to cut costs as we have seen in other big firms? No doubt Varley will keep us in the loop.
30 Andrew Tyrie, Conservative MP, chair of the Treasury Select Committee
Although he’s had a quieter year than those higher up this list, 2013 promises to be an eventful one for Tyrie. Indeed, the whole of the UK’s tax system will come under his scrutiny in the new year as the Treasury Select Committee examines its competitiveness, its vulnerability to tax avoidance and wider issues of tax policy. It’s a sizeable area of inquiry, and – one would imagine – likely to be a lengthy, strenuous process with witnesses to be drawn from all corners of the tax world.
31 Françoise Flores, chair, EFRAG
The European Financial Reporting Advisory Group was set up in 2001 to assist the European Commission in the endorsement of IFRS. Global standard setter the IASB is keen to work with standard setters at a more regional level, and with FASB’s influence diminishing, Flores could have a more influential role.
32 David Gauke, minister in charge of HMRC
Is David Gauke Teflon-coated? The Exchequer secretary to the Treasury avoided the vitriol dumped on HMRC over its supposed inability to deal with multinationals’ tax avoidance. With select committees warning about the potential difficulties of real-time PAYE’s introduction, the minister may have more than back-bench questions to deal with.
33 Tim Bush, accounting activist
International financial reporting standards still bug Tim Bush. He maintains IFRS was partially to blame for the financial crisis, allowing banks to book fanciful profits and pay out huge bonuses without keeping any cash in reserve for tough times. Changes are expected to some of the more contentious areas of IFRS this year.
34 Neville Kahn, Deloitte partner and Comet joint-administrator
The Comet administration saw Kahn thrown into the spotlight again in the throes of one of the UK’s largest retailing collapses, second maybe only to Kahn’s previous case at Woolworths. As administrators’ fees, work and decisions are all coming under increased scrutiny, Kahn and the other Comet administrators will have to be sure of every step they take.
35 Patrick Stevens, president of CIoT
This year saw the CIoT grow significantly on the back of its merger with the Institute of Indirect Taxation, while it raised concerns about the incoming universal credit scheme, which will replace the current tax credit system, and a move to real-time PAYE. Given those concerns, the CIoT is likely to play a significant role in advising on the administration of those schemes.
36 Jeremy Newman, chairman, Audit Commission
His first encounter with the Local Government Select Committee upon his appointment late last year was good-natured, when he was asked what he had achieved to win an Accountancy Age Personality of the Year award. But the part-time role will not be all fun and games, what with it being a strange and potentially difficult task winding down the Audit Commission as its work is privatised. While change management will suit Newman, he is better known for driving growth as head of both BDO UK and BDO International, rather than turning the lights out.
37 Jo Swinson, MP and business minister in charge of insolvency
Just a few months into the role, Swinson announced a review into insolvency practitioner fees to ensure creditors receive value for money. She will also oversee the intended reforms to the profession such as a single complaints body, common sanctions guidance and a website to host all disciplinaries handed down regardless of licensing body.
38 Mike Lynch, autonomous of Autonomy
The former Autonomy CEO and founder was up against the ropes as the company’s new owners HP, spearheaded by boss Meg Whitman, alleged accounting jiggery pokery had falsely inflated Autonomy’s value. But Lynch has come back slugging, claiming HP is trying to deflect away from the problems it is now having with its acquisition. This clash will go the full 12 rounds.
39 David Sproul, senior partner and chief executive, Deloitte
He might not be as bombastic as his predecessor John Connolly, but he will no doubt be delighted with his firm’s efforts towards the financial management of London 2012 – and the firm’s own performance last year. So how does it avoid a hangover of Olympic proportions? It may come down to cool handling of issues surrounding questions over its audit of former FTSE 100 darling Autonomy, and all the parties affected by Comet’s administration. Posting another 11% revenue increase and strong partner-profit growth will be a stretch.
40 Helen Brand, chief executive, ACCA
The certified accountants made a big push in 2012 to present more thought leadership: including research pointing to advsiors needing to better show the value they create – or risk losing their trust. With its second non-UK & Ireland president, Barry Cooper, in place this year, Brand’s team will have to demonstrate to ‘local’ practitioners the value that the association provides them.
41 Scott Barnes, CEO, Grant Thornton
It was a year of paddling furiously below the waterline for Scott and his firm, as it posted good revenues but saw partner distributions fall 3%. Investing was the game for GT in 2012, so will 2013 see margins increase, and will it stay on track to hit Barnes’ target of £500m in revenues by 2015?
42 Mark Carney, governor, Bank of England
A surprise choice as Mervyn King’s successor as governor of the Bank of England, Carney nevertheless has gained a reputation as a tough operator. As governor of the Bank of Canada, Carney proved he is not afraid to face down the banks, while he is the first foreign national to take the top job at England’s central bank.
43 British Accountancy Award winners
The UK’s award-winning practices, including Sobell Rhodes, Johnston Carmichael, Randall & Payne and KPMG, will be closely followed by Accountancy Age in 2013. Will it be another year of success for them? What impact will their award-winning have on the firms in the coming months?
44 Andrew Meeson, former ATT president
The former Association of Taxation Technicians president, along with three associates, is set to face the court having pleaded not guilty to charges that his company defrauded HMRC through a pension scheme it alleges was used to make false tax relief claims. He had stepped down from his ATT role to defend himself.
45 Robert Chote, chairman, Office for Budget Responsibility
Chote has again been forced to defend the office against claims it has lost its independence, after allegations it shifted output measurements in the chancellor’s favour. Chote countered, saying that growth estimates have been revised downwards. Which way will the OBR’s compass point in 2013, and what impact will that have on Osborne’s tax policies?
46 Vernon Soare, director of professional standards, ICAEW
A quietly spoken but determined figure, Soare has fought the institute’s ground on a number of topics, particularly against ceding powers to the AADB. He has also long fought for the institute to be able to license practitioners to offer probate services – in 2013 we will know if he has been successful on this front.
47 Ric Traynor, chairman, Begbies Traynor
Traynor managed to offload its Red Flag service from the listed firm’s books, taking on the majority interest in the division himself. Although unusual, it shows his dedication to ensure the success of the listed firm. Unfortunately, Begbies announced its main breadwinning division, insolvency, reduced staff and saw overall profits before tax fall to £2m from £3.4m for the six months ending 31 October.
48 Watkin Gittins, CEO, Montpelier
This year will prove a make-or-break year for Gittins. Following his arrest in 2010 on suspicion of cheating the Revenue and false accounting, it is understood that a report on him was received by the Crown Prosecution Service earlier last year, but a decision has yet to be reached. Montpelier clients involved in a tax avoidance scheme are believed to have been targeted for criminal investigation by HMRC. If that wasn’t enough, Montpelier is late filing its 2011 accounts – but at least the winding up petition against it was dismissed.
49 Fiona Hotston-Moore, partner, Reeves
In a bid to climb back up the practice management ladder, Hotston-Moore has moved from firm to firm, having headed up MRI Moores Rowland. A force to be reckoned with – helping to grow the revenues of previous firm CCW – she is now hoping to reignite that magic at Reeves. In a profession where there is still a woeful number of female managing partners, is she again heading for the top?
50 Paul Beswick, chief accountant, US Securities and Exchange Commission
Accounting standards convergence seems as far away as it ever has, and if the US is to make any real progress towards adopting IFRS, Beswick – appointed chief accountant in December – will need to be cheerleader for pushing the agenda forward.