Rake was international chairman at the time and instrumental in persuading
the US authorities to issue a heavy fine rather than go for a criminal
prosecution which had the potential to sink the firm.
At the time of the Enron episode, Rake was also charged with heading the
project to bring the remains of collapsed firm Andersen into the KPMG fold. A
couple of units round the world came on board, but after legal advice the
decision was made not to push ahead with the UK operation. Rake’s always
maintained his disappointment that it had not gone ahead, but could you call it
a wrong decision? Cautious yes, but that surely was out of concern for the rest
of the firm.
So there’s your man and now he’s chairman of British Telecom. He’s been on
board for roughly four weeks and what have they got? Well, Rake is a man who
knows what it’s like to be in the thick of it. He’s gone head to head with
regulators and judicial authorities. He’s argued and battled at the highest
He knows what tough opposition can be like and he knows how big organisations
function. What’s more, when it comes to corporate governance, recent experience
means he could probably write the book.
And corporate governance was never more high profile than it is at the
moment. Press, public, investors, analysts none of them were ever as focused
on these issues as they are now.
That perhaps is what makes Sir Mike such a good acquisition. The City knows
him and what he stands for. You can trust a man who has dealt with the worst
nightmare he could imagine and lived to tell the tale. Rake is a survivor who
emerges with his reputation intact. The City likes nothing better than that.
Gavin Hinks is editor of Accountancy Age
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