A brand-building campaign for the audit profession
19 January 2021: Audit Manifesto: The audit profession needs to re-establish trust but there is no easy path to do so. Authority on brand and trust Dr Jules Goddard talks through some options.
Dr Jules Goddard was working with Baring Bank on the day it went down, destroyed by the fraudulent activities of its head derivatives trader in Singapore, Nick Leeson. Goddard knew its owner, Julian Baring, fairly well; they lived near each other in the south of France. The bank had been with the Baring family since 1762, and in what felt like an instant, it was gone.
“They're a very honourable family, but they became too remote from what was actually going on,” he says. “They had all the purpose statements and identity statements and value statements that every modern business has, but they were just words on a piece of paper. These are the kind of issues where you need to go deeper than purpose and identity. I think that's easily fudged. It's more likely to be around structures.”
Goddard worked in the New York advertising sector of the 1960s before becoming the first doctorate student at the London Business School (LBS) in the 1970s. He started teaching MBA and PhD students at LBS the following decade and is still part of the faculty, recently helping to establish and promote its Management Lab. He is the author of several management and leadership books and has consulted with many FTSE 100 companies, including Big Four firms. He knows about reputation, brand building and shoring up trust.
Reputation: a tricky line to tread
For auditors, it’s a tricky line to tread. Holding your hands up when something goes wrong just does not go far enough. BP, for example, had a policy of assuming blame in the event of a disaster, which backfired spectacularly during the Deepwater Horizon oil spill in the Gulf of Mexico. “They were not given the credit that I, and many people, thought they would get for saying ‘let's assume it's us’”.
And yet, the very public errors of a very small minority are shaping the profession’s reputation in the eyes of the public. Can – and should – the audit profession do something about it? Perhaps it should avoid addressing the controversies head-on but instead do more to humanise itself?
“We see the faces of the medical staff on the news each night and so on. Obviously, they are wonderful people doing an extraordinary job,” says Goddard. “We very rarely have the face of audit represented. Many of them are young, talented, hardworking people. They're well-compensated, of course, but we still don't see enough of what the practice actually is.”
Trust, intelligence and effectiveness are all part of the auditor’s brand, Goddard explains. While an audit firm couldn’t necessarily come out with an emotive advertising campaign promoting this, it could potentially communicate the true value of good audit work. Goddard worked with pharmaceutical companies to help them build their reputations beyond certain stigma that people hold about the sector. One of his suggestions was to produce a non-financial annual report that measured success in terms of lives saved or extended. “There, perhaps, is a trick here for audit as well; around the money they have saved for shareholders and the nation as a whole.”
Purpose and value matter more
Certainly, the audit profession needs to find a way to communicate its greater purpose to the next generation of talented people looking to start meaningful careers. Greater purpose and value matter more to younger generations. Where 10% of Oxbridge graduates once went into one of the Big Four Firms, the audit profession now has to work harder to attract the best talent, and even then, audit isn’t necessarily the service stream that is attracting talent.
Audit firms have done a great job of attracting people from different backgrounds into the profession through their apprenticeship programmes, and their young auditors are often great ambassadors of the profession, visiting schools and colleges to talk about the benefits of a career in audit.
“I know from research that a profession that communicates humanly, emotionally and wittily reaps rewards and that it's simply the extent to which is in the public domain, attached to good work being done, if you like. It's not familiarity breeding contempt, it’s familiarity breeding trust and admiration.”
Audit success stories
It would help further to see some more success stories out in the news, which is easier said than done. Auditors often cannot speak about their good work, but according to Goddard it is possible.
“One of my old bosses at J. Walter Thompson, a wonderful man called Jeremy Gilmore, used to say: consumers build brands as birds build nests, from bits and pieces they come across. The bits and pieces we come across from audit are almost always where it's gone wrong. So to see those success stories – it may be the kind of people who are working in audit, it may be the money being saved, it could be many other things – a nice story that humanises the profession.
“As humans, we have a naturally high admiration for one another because we are not inherently a selfish species; we’re extremely cooperative. But in a sense, professionals don't bank on or draw from that fund of goodwill that people have for each other.”
Does your audit firm conduct charity audits for free? That is worth shouting about. Or creating foundations that promote better education for disadvantaged children, linking with the profession’s existing drive to diversify.
“The other issue around accounting generally is: do we count the things that count? There's this whole debate around the bottom line of society, of civilization. Is it some notion of human fulfilment or wellbeing? It would be interesting if auditors found areas where extraordinary things are being achieved by mankind but are not recognised, achieving huge things for human fulfilment. What if they looked at this through some kind of objective measurement, that is not being done by governments? That would be very interesting: an alternative balance sheet for civilisation, or a particular nation or region.
“We could return to that at the end of the year to see what we have achieved this year. These extraordinary auditors could tell us: do you realise that this year, we achieved so much? A chance to see the balance sheet of humanity: wouldn’t that be something?”
Wellbeing in the 2020/21 reporting season
With the 2020/21 reporting season likely to be difficult for many, ICAEW reminds members of the resources available to them and their families from CABA.
The Audit and Assurance Faculty are sharing their webinar on maintaining wellbeing during audit busy season broadcast on 11 January 2021. Watch the recording.