In January, the Murray committee, to which we have provided technical assistance and support, published its governance code for professional services firms working in the listed company sector.
The code is important in that, while the project commenced before the financial crisis, it demonstrates how the profession has got on the front foot over the course of the last 18 months – a period during which the debate over corporate governance reform has been significant.
The code itself requires the major UK audit firms to adopt a number of measures, including the appointment of independent non-executives, on a ‘comply or explain’ basis and will, I hope, underscore the seriousness with which the profession takes this debate. This project could not have been possible without significant and sustained input from the Big Six firms who are to be commended for their forward thinking in this area.
At the time of going to print, I am heading off to the World Economic Forum in Davos on behalf of the UK profession. This year, the theme is ‘Improve the State of the World: Rethink, Redesign, Rebuild’.
The WEF will take place at what I believe to be a tipping point between crisis and fragile economic recovery and it will be critical that the world’s political and industrial leaders make the most of this opportunity. I am convinced that we need to move towards a more sustainable business model – one that does not play fast and loose with risk at the expense of long-term shareholder returns. Doing so will take collective effort as well as a reassessment of investor priorities. The time to seize this opportunity is now.
Finally, please do take the chance to read the article by Professor Stephen Zeff in this month’s edition of Accountancy magazine which shows just how far the profession has evolved in recent decades. Zeff is a towering figure in the world of accountancy and we were delighted to welcome him to honorary membership of the ICAEW last year.