David Nish has attracted much attention from analysts since taking over the financial helm at Standard Life. So much so in fact that we interviewed him for Accountancy Age this week. And a fine interview it was, quite revealing about the man who provides a clear view that things needed to change at what many had thought of as something of a conservative, somewhat stuck-in-its-ways organisation.

Alison Reed, Nish's predecessor had found that she needed to move on from Standard Life once the flotation was out of the way. Clearly she and the Edinburgh based Standard Life stalwarts were destined for different paths.

But Nish is flavour of the month. Indeed analysts seem particularly impressed with his intentions for the company's assets. In fact they've accused him of leading a signifcant 'cultural' change because of it.

Nish told us:

We are in the process of asset-gathering at the moment. Our principal asset is our property and we need to look at how to take capital out of property and develop other areas of the business.

We have the assurance type business, but also, increasingly, healthcare and investment management products. We can use some of the released capital to expand and develop these sectors,’ he says.

Glad to hear Nish has got the backing for this, because it strikes me that leading such a project does need the full support of the board. After all Nish is careful in interviews to point out that change does not mean ignoring the 'heritage and history' of the place. So he's a gent and a diplomat offering welcome words for the Standard Life old boys. Perhaps that's all they needed all along - a little bit of comforting. Though it strikes me that if you're going to launch on the public markets, comfort is one of the last things you can expect.

July 20, 2007 | Permalink | Comments (0)

The executives of Metronet should be worried. If they thought that things had been hard so far, they've now got Alan Bloom to deal with, the hardest man in insolvency.

I suspect they are about to learn a few home truths about the way they have run things, and I expect Bloom, the administrator now in charge, to give everyone involved in Metronet's PPP deal to maintain and repair track and stations across a third of the tube network a fairly abrupt assessment of where it all went wrong.

Bloom was the man who wrenched Railtrack back from the brink, manhandled TXU through turnaround and cleaned up Barings after Nick Leeson had managed to clean it out.

Bloom is said to be mild mannered and methodical. But he's razor sharp, has an acute ability to unravel complexity and above all else never seems to shirk a battle.

He's the man to sort things but, for some I predict, it will be brutal.

July 19, 2007 | Permalink | Comments (1)

Well they're not actually. Finance directors, all crooks, I mean.

The reason I raise the issue in such a dramatic way is because of the conviction of Conrad Black on fraud charges at the end of last week.

An accountant reading the papers carefully would have noted that his long serving chief financial officer Jack Boultbee was also convicted.

Both were involved in 'plundering' $6m from the Hollinger media empire. And of course it raises the question, would Black have been able to manage it without Boultbee on his team?

Boultbee incidentally maintains that what he did was all part of legitimate tax planning for the company. So that's two lots of people whose reputations are potentially tarnished - tax advisers and FDs/CFOs.

To be honest Boultbee is in good company. Andrew Fastow, CFO at Enron, is still serving six years for his work there while Scott Sullivan is still serving time for helping out with the financial arrangements at WorldCom.

The difference between them and Boultbee, is that at some point they both put their hands up and said 'fair cop'. Boultbee has done nothing comparable.

So even while the sums involved at Enron and WorldCom were vast compared to Hollinger, they got off fairly lightly. Boultbee's beligerance may earn him a longer stretch.

But back to my question: Are FDs all crooks? Of course not. In fact there are notable examples around of FDs who stop the rot, not contribute to it. Trouble is, these stories tend to remain untold, because nobody wants to wash their dirty financials in public. But it does happen.

Frankly though, there is no one better qualified for a bit of fraud than, well, the finance director. What we need is a few more good examples to demonstrate, for everyone to see, that they've taken some firm action to halt some unsavoury practices. That way the public might be a little more reassured.

So in a rather unsubtle way, I'm clearly indicating that you should let me know how you stopped a fraud. Don't be afraid, we're all friends here.

July 14, 2007 | Permalink | Comments (1)

A departure from my usual topic to answer a critic. Last week Accountancy Age ran a special on the place of accountants in the battle to save the environment. Some readers were very complimentary, others took offence.

Let me quote you the views of Rigel Jenman:

I write in response to 5th July’s special green edition, which starts ‘Accountants are at the heart of efforts to preserve the environment…’ Who are you kidding ? This is nonsense , it is about as accurate as saying ‘Garden slugs are at the heart of Britain’s Olympic bid’ or ‘Eurovision song contest losers Gemini are at the heart of the music industry.

Rigel’s comments continue continue:

In my experience Accountants drive flashy cars into work (on their own), invest large pensions in arms / Oil companies , spend piles of cash on lavish offices , fly to New York for the weekend , avoid paying tax and help others avoid paying tax - and generally fill their boots greasing the wheels of greedy capitalism.

I have to apologise to the writer, because the letter arrived a little too late for inclusion on our letters page in Accountancy Age this week.

However, given the fervency of Rigel’s views I thought I would take the opportunity to respond. My argument is a simple one. I think the comment above actually proves the point about accountants being at the heart of efforts to preserve the environment. If they are as powerful and as potentially damaging to the environment as Rigel claims, then it goes without saying that they must be crucial to the effort to sort things out. Hence the introduction that Rigel is so angry about.

Another piece of proof. One FD wrote to me asking to be involved in any further coverage because he had just put his company through a planning exercise to reduce its carbon emissions 20% each year for the next three years. That's an accountant caring, taking the initiative and making a difference. Don't think he's flying to New York, don't believe his office is lavish and I believe his car is quite modest.

July 10, 2007 | Permalink | Comments (2)

You won't have missed the furore over the travel expenses of Sir John Bourn, head of the National Audit Office.

The NAO is Parliament's watchdog on public spending and Sir John effectively the most senior auditor in the country when it comes to public sector accounting.
Turn's out hundreds of thousands have been spent on his travel and that the NAO should have noted in the remuneration section of the accounts that £191,000 had been spent over five years on travel expenses for his wife.
The Public Accounts Commission has cleared Sir John of 'impropriety' but I can't help but imagine that there are a number of senior civil servants around who may be enjoying his discomfort. After all, when those Whitehall Mandarins find themselves before the MPs of the Public Accounts Committee to face questioning over their department's spending, it is the reports compiled by the NAO, and signed off personally by Sir John, that are used as ammunition against them. Who would be surprised if they relished, for a few moments, the thought that Sir John was now sharing some of their pain.

July 6, 2007 | Permalink | Comments (0)

Do I detect a sudden rush of common sense around the subject of executive pay? Here's the evidence. BBC execs, including FD Zarin Patel, refuse their bonuses this week to head off crticism of their pay. In May RailTrack bosses waived their annual pay boosts too until the investigation into the Cumbria rail crash is settled.

Not convinced? Marks & Spencer's CEO, Stuart Rose, and FD, Ian Dyson, saw their bonus schemes modified so that they really have to work to receive their bonuses. They will now have achieve earnings per share 12% over inflation before they can trouser their money, instead of 10%. So has something changed? Perhaps there is some more sensitivity around, and executives are beginning to see that you can't just pocket the cash and walk away with an absolutely clean reputation. The stories about rewards for failure may have had their effect. Mind you Tesco chief Sir Terry Leahy, a massive success story by anyone's estimation, looks as if he might be more stubborn. According to reports one in six shareholders have objected to the master grocer taking more than £11m in bonus payouts if the new US venture works out well. You've got to ask which shareholders they are. If Leahy manages the returns the big institutional shareholders like, would they really object to the pay out? And if the one in six are largely small shaeholders, will Sir Terry and the board take any notice? We wait to see.

July 4, 2007 | Permalink | Comments (0)