Outgoing BDO chief: Not shy or retiring
Jeremy Newman, departing global head of BDO, reviews his tenure with much pride and a few regrets
Jeremy Newman, departing global head of BDO, reviews his tenure with much pride and a few regrets
JEREMY NEWMAN wants to give something back. After three years, hundreds of business trips and thousands of air miles, the outgoing global head of BDO is “ready to get back to the coalface”.
Quite what he means is anyone’s guess; Newman himself isn’t sure. “I’ve been totally committed to this role right until the end. I haven’t given much thought to what I’ll do next,” he says mysteriously.
So what has the role entailed? Newman climbed from BDO UK managing partner to the lofty heights of international chief executive, having spent thirty years in the firm and its predecessor, Stoy Hayward.
“My first-ever office was right over there,” Newman reflects, pointing to a building across the road from BDO’s Baker Street headquarters. “After three months, I told the partners I wanted to leave because it was so God-damn boring.”
Fortunately, old-school audit didn’t put him off too much; Newman then tried numerous roles, including tax work and corporate finance. “It was the variety that kept me going,” he muses.
Known for his outspoken demeanour, it was this trait that first pushed Newman to take on the role of UK managing partner.
“I had views on how the firm should be run, and I was told to put up or shut up. You can’t give your two pence-worth without taking on some responsibility. You can’t tell others to stick their neck above the parapet if you aren’t prepared to do so yourself.”
One of his first moves as UK boss was a “programme of detailed staff engagement” focusing on the firm’s core values and accompanying behaviours. “Job satisfaction shot up, redundancies fell, staff were happier,” Newman asserts. “We created a sense of pride.”
This was evidenced by the number of Big Four directors and partners approaching Newman for a job, he claims: “At one time, we had an inquiry every two or three weeks. We recruited heavily from the largest firms. BDO became a more desirable place to work.”
The success of this reform was one of the reasons Newman won the role he now relinquishes. Three years ago, BDO International was conducting its own strategic review, and Newman, as head of the global firm’s largest and fastest-growing domestic network, was seen as well placed for the job.
“I had done well out of BDO and I felt I owed something back,” said Newman. “I also felt it was important to make space for the new UK head, so I would’ve had to leave the firm anyway. I didn’t want to become a magnet for discontent.”
Noble motivation indeed. Newman suggests his appointment to CEO marked a step-change for the firm, which had historically been fronted by leaders who were “somewhat older and perhaps closer to the end of their careers. It was more of a diplomat’s role, more about persuasion than leadership,” he recalls. “I didn’t want that.”
“In a way, BDO International had been more like a gentlemen’s club, with the focus on supporting member firms rather than driving from the front.
“If they wanted somebody to get on and off aeroplanes, shake hands and make people feel nice and warm about BDO then I didn’t want that. If they wanted to make BDO into a real, sensible commercial business then I was prepared to go there.
“They were clear what they wanted to have done and I think all the members were clear it needed to be done,” he reflected.
Ironically, one of the primary achievements that saw Newman take the global role – his UK employee engagement regime – has been his biggest disappointment as international CEO.
The engagement programme that was so successful in the UK ran into difficulties abroad “because culturally, things are just so different in different places”, Newman observes.
Being a diplomat, he does not couch it quite in those terms. “I would not call it a disappointment; everything is relative.”
“There’s nothing I look back at and say that’s been an absolute fiasco. Perhaps I would have liked to see the people agenda driven a bit harder. It’s proven to be more challenging than I thought it would be.”
“With the benefit of hindsight, perhaps I was unrealistic to push the programme on a global basis,” he muses.
Newman “realised relatively quickly that just because it worked in the UK, didn’t mean it would work elsewhere “. A number of early trips to China made it abundantly clear that such tactics wouldn’t fly, and forced the new CEO to question whether they would succeed in mainland Europe, let alone Latin America and elsewhere.
Initiatives like creating open-plan offices met with great resistance in some regions.
“For some people, it would be unconscionable to work like that. You can’t make people uncomfortable. If it’s uncomfortable for them, that’s not great engagement. You can knock down what you perceive to be barriers, but actually, for some people, the barriers are what they need to hold and protect them.
“Culturally, it’s a real, real challenge to take people at a pace that won’t disturb and upset them.”
So the global CEO, who came in surfing a wave of employee engagement enthusiasm, was unable to extend his vision to the international network.
“I’m not disappointed. It sounds smug to say I couldn’t have done it differently. I could have recognised the magnitude of the challenge to get it right, and the magnitude of the opportunity.
“If I had recognised this, I would have had slightly different aspirations as to what I could achieve.”
Different, but not lower, Newman insists. The challenge of working in different cultures affected not just the employee engagement regime, but also the pace of member firm development in some countries.
“There are one or two countries where, hand on heart, I would have to say I am disappointed they haven’t gone as far or as fast as I would have liked them to done.
“There are different reasons why they didn’t do more and better. Partly it’s because my benchmark was so high. I looked at China and other successful countries and said, why can’t we do the same here? Partly it comes back to culture. They joined BDO at a time when the measure of success was around referrals, participation in conferences and the like. For some, it’s taken longer for the message of common vision and shared business interests to sink in.”
Failure to engage
Newman acknowledges “it would be a very fair argument” to say this is down to his failure to engage with the disappointing countries on the level he did with star players like China, where BDO is now the largest domestically-managed firm.
“I look at them and say if I’d engaged with them earlier, if I hadn’t been as focused on the opportunities elsewhere, would it have made a difference? The answer has to be possibly, yes.”
Insisting, “you have to prioritise”, Newman nevertheless acknowledged: “There are one or two where yes, I misread the situation; where I thought they’d got the message and they clearly had not.”
But Newman does have many successes to feather his CV. BDO had 800 bodies in mainland China four years ago; now it boasts 6,500. Japanese firms too have enjoyed strong growth, and Newman presided over the network rebranding – rolled out in just three months – and implementation of a universal audit process complete with software.
Newman’s tenure review would not be complete without considering Banco Espirito, the gross negligence case that caused so many sleepless nights for the Big Four and other international networks.
US arm BDO Seidman was originally found guilty and ordered to pay damages, potentially throwing open the door for member firms’ liability to be transferred to global networks. This judgement was later reversed.
Newman claims that he “didn’t lose much sleep over it”.
“Clearly the case was important to BDO and for the entire profession, but I was always very comfortable with our legal advice and structure. I was reasonably confident we’d come out the other side.”
When pushed, Newman reveals: “In my blackest moments, I did wonder what would happen if it went the other way,” but he will admit to no greater doubt than this.
“I was personally involved only peripherally. It was a far bigger issue for the press than for me.”
So where does he go from here? Despite Newman’s coy protestations, he does have some inkling of his future.
“I definitely want to do something completely different.” No more professional services for Newman, who has already turned down advances from a legal network looking to boost its international offering.
Despite his pedigree, Newman insists he is not beating away prospective employers. “I haven’t said ‘come on in, folks’. I’ve made it relatively clear to people that I just want a little bit of time and space.”
This time and space could well lead Newman to the public sector, which he views as providing an opportunity to “give something back”.
“Being global CEO has been fascinating but to me, there’s a sense of unreality about it. I’d like to be a little bit more real.
“Professionally, working for BDO has been very satisfying, but on a personal basis I’d like to get my hands dirty again.”
Newman acknowledges this will mean “a very, very substantial reduction in what I earn,” but is insistent in wanting “to get back to the coalface”.
“I would like a hands-on job. I don’t want to develop a portfolio of non-executive directorships; I miss the day-to-day contact with real people.”
This could mean CEO in a large local authority, a role that was offered to Newman four years ago as he approached the end of his UK managing partner tenure.
“I would have said that was a big job. It involves people interaction on a day-to-day basis. To me, such jobs are not a step down at all. They impact the lives of a lot of people.”
Rescuing troubled businesses has also piqued Newman’s interest, but he maintains it is “better to have a breather” and make sure the next role is the right one.
BDO for the future
And what now for the network he leaves behind? Newman is optimistic. “There are massive opportunities out there. Asia-Pacific is really motoring; we have an international audit methodology and a global leadership team for the first time ever.”
He leaves at a time of great change. Many of his war cries have been taken up by the European Commission in its draft paper on audit, which seems to attack the dominance of the Big Four and lack of choice in the market.
“Barnier’s paper displays more movement and engagement on the key issues than we’ve seen in the past seven or eight years.
“It’s a long process and therefore hard to predict the outcome, but most important is a set of changes that benefit the profession, clients, and above all, investors.
“What’s good for the profession is good for BDO. If Barnier manages to stimulate greater choice and competition, we will be well placed to capitalise thanks to investments we’ve made in recent years.
“There is a lot of momentum about it,” he continued. “If you look at BDO’s developments, combined with what I hope will be delivered out of the EC and elsewhere, I think the opportunities are very big. I hope BDO is sufficiently well positioned and when the doors are opened, it is not only able but also willing to walk through.”
Fighting words for an outgoing CEO, but perhaps fitting for one who views his tenure with pride: “It is better to bequeath success and momentum,” Newman reflects, and there are no doubt others who share this positive opinion of his years at the top.