The Financial Power List 2016
A crucial year for HMRC sees Lin Homer top Accountancy Age's annual list of individuals to watch in the profession this year
A crucial year for HMRC sees Lin Homer top Accountancy Age's annual list of individuals to watch in the profession this year
The tax authority’s chief executive already has cause to celebrate this year, having been awarded a Damehood in the New Year’s honours list for her services to public finance.
However Homer’s ability as CEO will certainly be put to the test this year, as HMRC embarks on its switch to personal online tax accounts. The reorganisation will result in the closure of 137 tax offices by 2027 as HMRC moves to a largely digital interface with taxpayers and the agents that act on behalf of businesses and individuals across the UK.
Given the government’s and HMRC’s history of botched IT projects the profession remains extremely sceptical of how successful the digitisation will prove.
Romanovitch was appointed as Grant Thornton’s CEO with great fanfare in 2015 – not least for a big PR drive to push a ‘shared enterprise’ model. But where is this model eight months down the line? An announcement is expected soon and the model will represent a significant change for the firm, its partners and employees.
A strong character, the yoga-loving accountant is seen by many as breaking the mould of traditional senior partners. But when it comes to the crunch (and whatever model is extolled) the firm needs to be profitable – and partners won’t want too many distractions from the day job. Can she drive change and maintain the figures?
3 (13) Simon Dingemans, CFO, GlaxoSmithKline and chairman, The Hundred Group of Finance Directors
It is being billed as a pivotal year for GSK. So too for its CFO Simon Dingemans. The pharma giant is busy resetting investor perceptions following a year of declining share prices.
It is entering a critical period in efforts to revive growth following a turnaround programme and analyst expectation of a return to double digit growth means the pressure will be on Dingemans to deliver.
And that’s just the day job. As chair of the highly influential 100 Group of Finance Directors, Dingemans will have to consider a whole raft of issues affecting the profession – notably a series of issues also being considered by the FRC and its chair, Sir Win Bischoff.
Veteran financier Sir Win Bischoff, fast approaching his second anniversary as chairman of the FRC, will be in charge at a critical time for the accounting and audit watchdog.
The regulatory body head will have to oversee increasing demands from MPs – most notably Andrew Tyrie, who chairs parliament’s powerful Treasury Select Committee – to re-examine the FRC’s decision not to launch a formal investigation into KPMG’s work as the auditors of collapsed bank HBOS.
Bischoff will also need to ensure the FRC successfully implements its enhanced audit responsibilities under the EU Audit Regulation and Directive. The body is also set on improving investor engagement with its stewardship code and improve understanding around how company culture impacts corporate governance.
The most important counter of coins in the country, George Osborne always holds a commanding position in the list. But after a year with three (or was it four?) Budgets, in which he set the ball rolling on digital tax accounts having reformed the pensions tax landscape the year before, Accountancy Age expects a quieter year for Osborne in terms of announcements affecting the profession.
With an EU referendum, and possible aspirations to move into his neighbour’s house, tax and accounting might be the last thing on the chancellor’s mind.
This could be a pivotal year for Simon Collins and KPMG. Last year, partners were hit with a £90,000 pay cut as profits dropped to £383m, hinting at a difficult period for the firm.
KPMG has acquired a series of specialist consultancy firms over the last 12 months, spending around £49m in the process, and has made a great play into the SME market and agreed tie-ups with a series of lenders. Scepticism remains as to whether the Big Four can effectively service the SME market. The success or failure of its push into consultancy and SME services could come to define Collins’ tenure as the Big Four firm’s UK chairman and senior partner.
Surprisingly absent from previous lists, David Gauke’s profile is increasing in government and will have to preside over the introduction of the digital tax accounts, and forcing large businesses to publish their tax strategies. The closest thing we have to a minister for HMRC, he is well-respected among tax practitioners, whom he is keen to involve in the formation of policy.
Much will ride on the success of the digital accounts, however, and given the government’s track record on substantial IT projects – such as RTI and universal credit – there is no guarantee.
As the EU’s tax and economics commissioner until at least 2019, Moscovici will be absolutely vital in ensuring the OECD’s BEPS recommendations are adopted across Europe, and will play huge role the rules are enforced and adhered to once put in place.
9 (NE) Pierre Gramegna, Luxembourg minister of finance and president of the Ecofin Council
As president of the EU’s influential Economic and Financial Affairs Council, Pierre Gramegna will be an important player in the endorsement of IFRS 9. The new accounting standard for banks, which alters the way financial institution’s provision for bad debts, is due to come in 2018 and many, including ECB president Mario Draghi have urged for swift endorsement of the standard.
Arguments over whether application of the standard will present a true and fair picture of company accounts means the views of Gramegna and his Ecofin colleagues will carry much weight.
As SNP deputy first minister and cabinet secretary for finance, constitution & economy, John Swinney is set to play a bigger role in Scotland’s fiscal landscape, especially given SNP leader Nicola Sturgeon’s strong hint that she’ll launch another push for independence.
Under the 2012 Scotland Act, Holyrood will gain a new power over income tax from April 2016. As part of the arrangement, the Treasury will deduct from the Scottish block grant a sum equivalent to the product of 10p worth of income tax north of the border. MSPs then have to set a Scottish Rate of Income Tax (SRIT) to fill the gap, where they can levy more, to raise more cash; they can cut tax, at both the standard and upper rates, and take the hit on public spending; or they can reinstate the 10p rate.
Ruth Porat, the former Morgan Stanley CFO and recently anointed CFO of Alphabet, the newly created parent of online advertising behemoth, Google, is bringing her hard-nosed Wall Street nous to Silicon Valley.
Not only has the top-flight executive overseen the complete transformation of Google into Alphabet as well as handling its first share buyback, for a cool $5bn, but she has steered the company’s share price in a decidedly northerly direction.
Porat has also cut costs, much to the delight of investors.
Despite his infamous ‘Mao moment’ during the Autumn Statement, shadow chancellor of the Exchequer, John McDonnell, will continue to make financial headlines in 2016 and influence the political agenda.
While he may not currently – or ever – get his hands on the nation’s finances, the MP for Hayes and Harlington, will continue to be a thorn in the side of his opposite number, George Osborne.
He’s already accused Osborne of being far too close to the UK’s top bankers, being a “soft touch” and offering corporate financiers endless regulatory concessions and legal loopholes to avoid tax, after it emerged that Citigroup and Credit Suisse paid zero UK tax for 2014.
A year into the job as Insolvency Service CEO, Sarah Albon must successfully implement a five-year strategy to improve service to its customers, lower its costs and further strengthen the UK’s insolvency regime. Also, unpicking the tangle around redundancy processes in administrations will loom large this year.
14 (17) Vernon Soare, executive director, professional standards, ICAEW
Vernon Soare has successfully steered the ICAEW through the hurdles of becoming a regulator and licensing authority for probate and ABS.
But he’ll have a tougher job getting to grips with the controversy surrounding the profession’s code of ethics, exposed after the MG Rover saga, whereby the institute was dragged into the dispute after the tribunal criticised the institute for the lack of clarity in its guidance about how accountants should act in the public interest.
He is also charged with looking at what other legal services the institute’s members may want to offer clients.
Incredibly vocal over accountancy issues in 2015, we’re predicting that Tyrie’ll be letting his feelings known over the next 12 months as well.
After holding onto his position as committee chairman following the General Election, the MP for Chichester was “flabbergasted” over the FRC failing to investigate HBOS’s audit failings and in December called upon the reporting council to look into how KPMG has been auditing the Scottish insurance company.
The FRC is yet to comment on the situation, so we’re betting that Tyrie will have much more to say on the matter in the near future.
The last year has not been without its challenges for PwC’s head of assurance. The firm lost the audit of Tesco after 32 years with the embattled grocer following an accounting scandal of its overstated half-yearly results. But that appeared a blip in a year which saw assurance fees rise 9% to £1.1bn, while the firm continues to dominate the FTSE 100 with 40 clients, almost double the number of nearest rival KPMG at 24.
With Ian Powell is coming to the end of his eight-year two-term stint as chairman and senior partner and Chalmers, a 30 year veteran of the firm, should be seen as a realistic successor.
The argument over whether accounting standards provide a “true and fair” picture of company accounts continues to rage, with the LAPFF at the heart of it. The forum, which represents 66 council schemes with £175bn of assets, has written to FTSE 350 company chairs, urging them to disregard FRC guidance, while both the LAPFF and FRC have sought legal opinions on the matter.
The true and fair principle also lies at the heart of discussions around EU endorsement of IFRS 9. The outcome off LAPFF’s argument on true and fair has ramifications beyond these shores.
From the outside looking in, some might think that 2015 was a quieter year for Longe, following the integration of RSM Tenon. But the big decision to rebrand Baker Tilly to RSM was made in recent months, and the newly-constituted firm will want to kick on in what will be a relatively more stable period.
The focus might well be on whether Longe believes he has set a path that leads to him stepping down – he has served in senior management roles at Baker Tilly RSM for 20 years.
Practitioners have certainly benefitted from millions of businesses signing up to the government’s workplace pension scheme, with one accountant ingeniously setting up his own business that specialises in offering support to smaller practices and IFAs who are helping clients stage.
Business owners that have 30 employees or less have until April 2017 to sign up for the initiative, so accountancy firms will be kept busy with pension clients over the coming months.
Can Ben Affleck make accounting glamorous? The Batman Vs Superman star featured on our Power List last year with us asking the very same question, but now a 7 October release date has finally been revealed for the Warner Bros-backed The Accountant – so we’re asking it again.
Practitioners will be heading to their local cinema to follow the adventures of Chris Wollf, a regular accountant by day, but by night he moonlights as an assassin.
Bookkeepers will be quick to judge whether Affleck delivers a fair representation of an accountant, but they certainly will be hoping that he puts in a better turn than Jason Donovan and his short-lived accounting TV drama Loot, which weirdly was scribed by former ACCA chief exec Allen Blewitt.
Although his role is voluntary, the former partner and head of tax at law firm Allen & Overy is central to HMRC’s key weapon against tax avoidance, the GAAR panel. Thus far, the body tasked with enforcing the rule has been distinctly quiet, despite claims that companies and their accountants are perpetrating tax avoidance on an ‘industrial scale’.
But in a wide-ranging interview with Accountancy Age last year, Mears suggested that 2016 could well to be the year the panel considers its first case.
Now well into his second year as the boss of CIPFA, Rob Whiteman has made quite an impact in the role since his appointment. He’s overseen an impressive 25% uptick in student numbers – with 50% now recruited from overseas – and delivered an extra £1m in revenue to the institute’s growing revenue stream. This is despite a tough environment for the public sector, most notably in local government, whose central government grant has been slashed by 40% in the past five years.
Paul Aplin has become one of the profession’s most influential representatives and will play a huge role in sanity-checking the introduction of digital tax accounts and the potential issues. He was involved in AC Mole & Sons filing the first electronic tax return in 1997, and then the first internet-based return in 2001.
During the Carter Review, where plans were laid for a more digitally-focused HMRC, he successfully lobbied against moving the self-assessment filing deadline forward. More recently he has joined the ICAEW board.
Profits continue to fall at insolvency specialist Begbies Traynor. A 10% year-on-year reduction in the number of UK corporate insolvencies in the six months to 30 September 2015 helped drag profits for the period down to £600,000 from £1.5m.
While Ric Traynor can point to the tough market conditions, he will be hoping for a turnaround in the insolvency bellwether’s fortunes after years of decline.
Nevertheless, the firm remains on the acquisition trail and last year acquired the trade and certain assets of The P&A Partnership insolvency practice via a pre-pack deal worth £860,000, adding a specialist business property valuation consultancy Taylors to its business.
Like HMRC boss Lin Homer, Tilley also has reason to celebrate the beginning of 2016, having been included in the list of OBE recipients for his services to the economy.
Once the afterglow of his achievement has worn off, Tilley will be focusing his efforts upon maintaining CIMA as a brand, especially as it looks to create a new body with US institute AICPA to promote their CGMA designation. Tilley will be hoping that the new body is given the go-ahead during CIMA’s AGM in April. Once that happens, his time will be spent ensuring that CIMA is a globally respected association during its expansion.
The NHS’ finances are in trouble, but the question is whether Baumann will conduct reconstructive surgery or just a quick nip and tuck on the healthcare department’s books. Whatever his course of action, he will be doing so without the help of now ex-director general of finance Richard Douglas and former NHS Trust Development Authority chief David Flory.
The new CFO will also need to restore confidence within his 196 NHS England FD’s, after a Healthcare Financial Management Association (HFMA) survey revealed that most of them believe their local health centres have “insufficient financial resources”. This might have something to do with one NHS trust paying a temporary FD almost £50,000 a month, despite the trust being placed in “special measures”.
Izza will look back on 2015 as a satisfactory year for the institute. Members and practices have started to take up alternative business structure (ABS) and probate licences. The ICAEW also retained regulatory powers and has been involved in improving dialogue between bank auditors, audit committees and financial regulators.
A likely focus for 2016 is to mesh together its ethics code to represent how members should work in the public interest – an area the institute has previously struggled to get to grips with – while also considering whether to increase the legal services that can be offered by its members.
One of the hundred-odd business leaders to get their way in the General Election after he put his name to an open letter branding Labour ‘anti-business’, Varley and his firm will look to build after breaking the £2bn fee income barrier in October last year.
More than 4,500 people were recruited by the firm in 2014/15, with 95 new equity partners joining – of which more than a third were women. Varley expects more of the same, noting at the time: “We continue to provide more opportunities for school leavers as well as experienced hires and new graduates.”
It was something of a mixed bag for Sproul and Deloitte in 2015, with the corporate finance firm seeing its record £14m MG Rover fine from the FRC slashed to just £3m. Deloitte presented solid but unremarkable annual figures, with yearly revenue growing 6.4% to £2.71bn.
With Sproul in charge until at least 2019, confidence will be strong going forward, illustrated by the announcement of a new leadership consulting practice which will create 140 jobs in the UK by 2020.
Having delivered their recommendations to curb tax base erosion and profit-shifting globally, the challenge for Saint-Amans and his OECD colleagues is ensuring the smooth adoption by participating nations. The OECD recognises implementation is key to moving BEPS forward, but given we’ve seen 30 unilateral measures implemented by 19 countries at the time of writing, that will be no walk in the park.
Simon Michaels has made some bold claims to Accountancy Age in recent months. Having just delivered annual fees of £391m off the back of strong growth in its tax practice, Michaels eschewed the consultancy strategy being pursued by the Big Four. Speaking to Accountancy Age late last year, Michaels said his firm’s strategy was away from building “big IT and consulting businesses”. It will, however, be targeting the FTSE 350 tax market, with an aim to do business with 50% of the market by 2021.
Having faced down a minor, yet vocal and steadfast rebellion late last year over how the institute fundamentally functions, Brand will be looking to commence the institute’s time at its new offices at the Adelphi Building in a calmer manner.
Engagement of members is likely to be high on Brand’s hit list given approximately 5,000 of ACCA’s 178,000 members turned out for September’s AGM vote – approximately 2.8% of the its membership – and one motion was voted down by just a single vote.
Defining the conceptual framework that underpins how the IASB sets IFRS will be top of Hans Hoogervorst’s in-tray. Redrawing the framework has proved a difficult and controversial job for the accounting standard setter. Both the ICAEW and FRC are unhappy with the IASB’s current exposure draft. Back to the drawing board it is. The standard setter still has to finalise rules around lease accounting and see its new banking standard endorsed by the EU.
Having been hailed as “one of our most respected business professionals” by ICAS chief exec Anton Colella, former ICAS president Norman Murray is spearheading a new drive on ethics within the profession.
Murray is also chair of international whiskey company The Edrington Group, so we expect Murray to take a straight-up approach to any ethical accountancy failures.
Tax campaigner and key influencer of Corbynomics, Murphy looks set to have another vocal year as many of his key ideas – first mooted on his blog – make the transition from pure political economic philosophy to reality.
Former KPMG man Murphy is adamant that the reality of Corbynomics is not just in the detail but is in a whole new way of looking at and seeing ways of doing business. As the chartered accountant boldly posits, Corbynomics “may not be the kick back to a past era as those searching for the neoliberal norm like to claim” but “is instead the beginning of something new”. It’s a brave soul that will bet against that assessment.
The political mood around tax is still rather stormy. It’s a climate that owes much to Margaret Hodge’s work as PAC chair in the last parliament, despite criticisms of Hodge’s tax knowledge and manner with witnesses. Given all that has gone before, Hillier will want to make her mark.
After joining the Baker Tilly International network in 2014, MHA MacIntyre Hudson managing partner Rakesh Shaunak has turned his attention to building his firm’s presence in Kent and encouraging member firms to forge closer ties. How recent mergers with member firm MHA Bloomer Heaven and Folkestone-based Spain Brothers play out in 2016 will be important signposts – along with other key appointments.
Introduced at the end of last year following a government-commissioned review into the use pre-pack administrations, the idea of a pre-pack pool has proved controversial among insolvency practitioners. They suggest that the pool – made up of independent experts tasked with scrutinising the process – will be ineffective. The pool opened for business late last year. The first deals to fall within its remit will prove insightful to how it will operate in practice.
Amyas Morse will have a busy 2016 as the body overseas a landscape riven with further austerity, huge change in central government, much of it technology-driven, localism, devolution and more contracted-out delivery.
Having been in the role since 2009, Sir Amyas, who held a number of senior roles with PwC and then the Ministry of Defence, will need to bring all his varied audit experience to bear to tackle the complexities of the year ahead.
Progress towards US adoption of IFRS has been glacial at best. But in December Schnurr recommended that US companies be allowed to use international accounting rules as an add-on to their main financial statements. It could be a small step forward, but full US adoption of IFRS is still likely someway off, with differences over bank and lease accounting rules existing between US and international standard setters.
Implementing sustainability and ‘broader thinking’ into corporate reporting is of growing importance to annual report compilers. While some CFOs have suggested many large corporates already use the practices advocated by the IIRC, Druckman remains an influential figure within financial reporting. A growing focus within the profession on how to assess corporate culture chimes with the council’s reporting framework.
In 2015 Powell kept a low profile, however his firm was working overtime: numerous audit clients were won and lost; the firm took a kicking along with the rest of the Big four over ‘LuxLeaks’ tax avoidance revelations; and PwC handled another slew of major insolvencies including Caparo.
Now in his last year as senior partner. He will be keen to ensure a strong legacy to pass on to the next incumbent.
A safe pair of hands, having been brought to the Bank of England from one of the few Western economies to escape from the financial crisis relatively unscathed, Carney is unflinchingly pragmatic. As inflation remains stubbornly low, Carney has reiterated he will not be cowed into an interest rate rise despite widespread clamour. He did, though, promise more ‘forward guidance’ for markets on policy.
Now more than halfway through his term at the helm of Mazars, Verity has steered the firm into calmer waters, having posted 9.57% growth in the most recent Top 50+50. Mazars has also put the First Quench Pension Fund debacle to bed. With partnership elections on the horizon, Verity will look to strengthen his hand over the course of 2016.
The 78-year-old Argentinian pope has done much to try and transform the tarnished and scandal-riven reputation of the church at the global HQ of the Roman Catholic empire.
As part of that reforming zeal, Pope Francis – the first pontiff to hail from South America – installed its first auditor-general in the guise of Italian Libero Milone, an ex-chairman and CEO of Deloitte in Italy.
In 2014, KPMG was brought in by the Vatican to advise it on its internal accounting procedures following a series of problems within the Holy See’s finances. In December, PwC picked up the spiritually lucrative job of probing the Vatican’s finances.
Stephens will be hoping that 2016 starts as well as last year: RSM International reported an 18% increase in global fee income, year-on-year, to $4.4bn (£2.9bn) for the y/e 31 December 2014.
Following Baker Tilly’s adoption of the RSM moniker, the world’s seventh-largest global accounting network will hope to continue crafting its ‘unified approach’ as Stephens looks to demonstrate the name change was more than just a branding exercise for its member firms.
The coming year is likely to be pivotal for Sandall and TaxAssist as the firm embarks on an ambitious international expansion plan, taking in five branches across Australia, before turning its attention to Canada, Ireland, Scandinavia and the US.
Having helped grow the firm to 400 staff – including 45 partners – and its turnover from £19m in 2005 to over £32m last year, Julie Adams has embarked on a new advisory-led drive at the firm. Menzies will launch a new consultancy service covering eight areas: business services; healthcare; hospitality and leisure; manufacturing; property and construction; retail; technology; transport and logistics.
After breaking the 100,000 customer mark in 2015, and being named as Client Software Product of the Year at the British Accountancy Awards, Gary Turner’s merits inclusion in this year’s list. The digitisation of tax returns is likely to open up new opportunities for Xero and their competitors, while the outfit’s battle for a share of the payroll market against FTSE 100 software company Sage, is likely to continue.
The Practitioner creeps into this year’s list. A regular contributor for Accountancy Age, the Practitioner’s uncensored thoughts on practice issues from recruitment, dealing with HMRC and dealing with clients, have proved popular, and at times controversial, with readers.