We need people with moral courage
For over a year now Anton Colella has been working as the Global CEO of Moore Stephens International, belonging to the top 10 accountancy firms in the world with offices in over 100 countries, employing over 30 000 people worldwide. Having worked before as the CEO of the Institute of Chartered Accountants Scotland, Anton Collela has built up a reputation of presenting and ‘living’ audit as a value-driven service to society. He shares some of his views regarding the role of values, particularly when it comes to fraud and corruption and how audit firms should deal with this.
Interview with Anton Colella, Global CEO of Moore Stephens International
By Gaston Moonen
Different, yet familiar, aiming for the human relationship
Waking up in different time zones is not new for Anton Colella. ‘But it just happens more now than in my previous job.’ He had a timeslot for the interview early in the morning, just before giving presentations to 50 leaders of Moore Stephens International who had gathered at Harvard University in Boston. ‘On the one hand my work is quite different from before, in the sense that the discussions are more macro, dealing with issues coming from different parts of the world. On the other hand, from a leadership point of view there are also many similar demands to previous positions I held. And I started in a good learning school, being a high school teacher a long time ago.’
Anton explains that in the very busy market of accountancy firms there is a lot of competition. ‘The challenge is how to differentiate yourself. Pricing? Pricing as such is a wrong strategy, because the client can see through that. I think there is an opportunity today to differentiate in the quality of care that we have for our clients. And that means changing sometimes the fundamental DNA of a firm. From a transactional relationship with clients to a companionship relationship with them.’ He points out that at a time when technology is driving so much — personal life, corporate lives, operation of businesses — there is a potential for a significant dehumanizing in organisations. ‘I believe there is an opportunity today to disrupt and bizarrely the new disruption will not be technology. The new disruption in the market place will be the businesses that embrace a renewed and profound humanity.’
The new disruption in the market place will be the businesses that embrace a renewed and profound humanity.
The Global CEO explains that technology is perceived by several people as a threat in accountancy, or a disrupter.’ But I believe that it in fact provides us with a liberty allowing us to disrupt the market significantly by bringing a new humanity to our work. If we think we can attempt to demonstrate a profound humanity in the relationship with our clients, while we do not sufficiently do it in our own work places, in the small things in the way we run our businesses and work with colleagues, our clients will know, and they can smell our insincerity.’ For Anton the challenge for Moore Stephens will be to build a reputation as a profoundly human organisation. ‘It will make us attractive as an employer, but will also generate significant loyalty from our clients.
Moore and Stephens International addressing fraud and corruption
For Anton Colella the question on how a company like Moore Stephens International should deal with fraud and corruption issues all has to do with this human factor. ‘We are an organisation that provides services in audit: internal audit, forensic audit, statutory audit. And we are the ones hired by clients to… seek the truth!’ As to fraud and corruption, he identifies human behaviour, human desire, human weakness as the biggest factor.
…we are the ones hired by clients to… seek the truth!
‘The ultimate key to our support to clients of preventing fraud is not just that formal process. It is developing a relationship with them that allows us to look at culture, and values, the quality of leadership. What type of behaviour goes on in an organisation. Because in reality fraud does not start as a massive fraud.’ He argues that fraud starts with small weaknesses. ‘Great sins start with small ones. Our role in working with clients to eliminate fraud is to identify a culture, or a set of behaviours, when they are weak to small things, and allow them to flourish.’
Truth must prevail over self-interests, even the self-interest of an entire organisation.
When it comes to finding the right balance of the self-interest of making profits and the values to be upheld by a company, whether active in audit or another area, Anton Colella is rather outspoken. ‘We do not seek profits at the expense of truth. Truth must prevail over self-interests, even the self-interest of an entire organisation. Because ultimately, what do we want? We want respect. And respect is earned not just in the call of your work, but in the decisions and statements you make. So part of the development of the leaders in your organisation is to develop them to be confident to take that position. Not be fearful of loss, but appreciate that courageous position, and provide a longer-term success for the business.’
…respect is earned not just in the call of your work, but in the decisions and statements you make.
As a risky area — when it comes to possible fraud — Anton Colella identifies expenses. ‘That is where fraud is most often encountered and I think organisations pay a lot of attention to the management of expenses. Because that is where things begin. Some may consider expenses as a relatively minor part of the leadership role. But scrutiny, discipline and tight controls over there protect an organisation, and sometimes protect individuals from themselves, from their own behaviour.’
Trust as the key output of accountancy and audit
Anton Colella is very clear what should be the main output of his company and of the profession in general. ‘We are in the business of trust, which is a consequence of the quality of our work. People are looking for trust. And they are looking for someone who will indicate whether something is trustworthy or is to be trusted. That is part of our role.’ He explains that it is tragic if those who are in the business of establishing trust are unable to fulfil that purpose. ‘And it is sad when we hear of accountancy firms being discredited in public, because of the perceived outcome of their work. Because people, and now increasingly politicians, are placing a lot of faith in the work we do. We have built our house, our company, on being able to be given trust by our clients. But not just our clients anymore, it is the whole of society.’
As to how the Global CEO of Moore Stephens International would deal with a major fraud case related to one of the leaders in his organisation, he explains that this is when leaders are really tested: ‘How do leaders deal with crisis and matters of integrity? And their reputation — as leaders — depends on exactly this. Therefore such cases must be dealt with firmly, speedily, and with justice. It needs to be investigated properly because it needs to be just. And the CEO should take a big interest in it.’
… Integrity is the biggest asset on our global balance sheet.
He explains that moral leadership is key, for a reputation is lost in a second. ‘And we need to guard our reputation. Our Integrity is the biggest asset on our global balance sheet. Therefore we need to guard this with everything we have.’ So as to the choice whether to give a negative opinion and lose the client or give a less conclusive opinion while the accounts say otherwise, Anton Colella says without any hesitation: ‘A negative opinion, without question. Because if we look at the maintaining of short-term profit for the loss of long-term reputation, that is bad arithmetic, quite simple.’
Leaders’ responsibilities for upholding values
On the topic of the importance of values in the society of today, also in view of well-respected people appearing in the Panama Papers, the Paradise Papers, etc., Anton Colella refers to the quality of leadership. ‘Today we have an issue about the quality of leadership in society. Political, civic, business, religious leadership. People have lost confidence because the media today are able to expose where leaders are weak, or they made bad decisions, historically or presently. So people have become more and more-used to leaders who are weak and who do not live their values. The reality is: there is no perfect leader.’
Anton Colella underlines that those in positions of responsibility need to realise that what they do echoes through nations, businesses, economies. ‘And that with the bigger responsibility, they also have a higher accountability. We need leaders today who have the courage to do the right thing and to seek the truth.’ He points out that courage sounds like a cliché, a kind of sound bite. ‘But living a life of moral courage is a very, very difficult thing. If you look at the history of people who have exercised moral courage, they have often been in prison, persecuted, rejected, or ridiculed. And sometimes the truth of their actions is only manifest long time after they are gone.’
They are doing much more than whistleblowing: they are exercising with great integrity and moral courage, and they should be honoured…
Speaking about courage brings him to the issue of whistleblowing. ‘I actually think this is an unfortunate term. The term whistleblowing does not do justice to what someone is doing when he or she reveals or exposes something that is wrong. They are doing much more than whistleblowing: they are exercising with great integrity and moral courage, and they should be honoured, not ridiculed. Today we need men and women who will speak out and exercise moral courage in the face of what they consider to be societal values or best corporate values. As CEO I will do my utmost best to promote such courage.’
This article was first published on the 2/2019 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.