After eight months in the hot seat as CEO of Baker Tilly International, Francesca Lagerberg is right to be bullish about the achievements of the global network she now heads up – although she admits that meeting the exacting requirements of both clients and staff against a backdrop of industry-wide upheaval means there is no scope for complacency.
Lagerberg was appointed to the role in June last year, becoming the first woman to lead the top 10 accounting and consulting network, which today spans almost 150 territories and boasts a global headcount of more than 41,000.
A past chair of ICAEW’s Tax Faculty, Lagerberg joined Baker Tilly International with more than two decades of professional services experience, most recently with Grant Thornton International, where she held international roles including global head of tax, head of people and culture and most recently as network capability lead.
Despite joining Baker Tilly International during a period of extreme economic and geopolitical volatility, its most recent financial results tell an encouraging story, with global revenues up 13% to a record $4.66bn, buoyed by double digit revenue growth across all regions. Headcount across the network now stands at over 41,000 in 703 offices in 145 territories.
A breakdown of the results by service line shows that accountancy and audit generated the lion’s share of revenues – 47.4% or $2,211m – with tax at 23.9% or $1,115m and advisory including corporate finance, business advisory and law – 28.7% or $1,338m.
“You can get growth anywhere, but you want sustainable, profitable growth,” Lagerberg says. “Clearly, advisory has been the growth engine for quite a long time, and still is. But you’ve also got a real reminder about the value of annuity work; who wasn’t grateful for that audit practice during the COVID-19 years?”
Lagerberg says the network’s ‘global reach, local understanding’ mantra is standing it in good stead. “Even if clients don’t currently work across borders, they want to be able to be ready to do that. We’re all connected and part of that same ecosystem, so it’s hugely important if you have a more holistic knowledge and are able to look at things from a global perspective. You need to be ahead of the game in terms of the complex business issues clients face and run alongside them to find solutions.
“They want an organisation that not only talks a big game, but one where the people who pitch for the work are the people who do the work, where there’s an empathy and an appreciation of client needs. They want to feel that you’re in it to help them.”
Engendering those attributes among those delivering the service at the front line isn’t something you can leave to chance, she admits. “You have to really work at it. It is how you train people, but it’s also what you do on a day-to-day basis. It is a continual process of development.”
Meanwhile, turmoil across the accounting profession including consolidation and demergers is a force for good, Lagerberg believes: “The accounting profession today is a whirlwind of consolidation and that forces you to rethink what you do and question whether you are doing things in the most effective way for your clients, and to set out your stall for what you want to be going forward.”
While client conversations during COVID-19 predominantly centred on cash, increasingly the challenges they face hinge on the war for talent, and creating a people experience that’s going to attract, retain and help develop the right people, Lagerberg says. For the network too, competition for the best people remains a huge challenge right around the globe, as the attractiveness of an accountancy career loses its sheen among jobseekers, not helped by bad publicity about the role of the profession in some high-profile business failures.
“The reality is, it’s an amazing profession with so many different opportunities, but we haven’t really sold it phenomenally well and the options are not readily apparent when you’re, say, 21 years old, and wanting to work for something that has the cachet of an innovative tech company.
“However, working with intelligent people who do smart things with interesting clients is a massive talent attractor. And having some empowerment and autonomy quite early on really appeals to a certain kind of person. The kinds of people we’re all looking for are learning-orientated and they need to know they’re getting that insight and support. That’s a hugely important part of it.”
Burgeoning demand for new services – in particular, helping clients navigate the ESG minefield – combined with a dearth of candidates, and the need for different skill sets is broadening the network’s approach to recruitment. “If you look for someone who is an ESG expert, there’s probably going to be 100 firms chasing them. So we’re looking at growing our own experts who bring all their existing institutional knowledge with a real desire to get to know this new subject matter,” Lagerberg says.
The EU’s Corporate Sustainability Reporting Directive (CSRD) – new rules in force from 5 January – beefs up the requirements for companies to report on social and environmental information. Nonetheless, Lagerberg expresses some frustration at the time it’s taking to establish mandated global sustainability standards, but that is doing little to quell demand for ESG advisory services. “We will get to the right place eventually, but it still feels painfully slow to me.”
Nonetheless, as the severity of the climate crisis continues to grow, the need for robust sustainability reporting and auditing is putting accountants at the heart of ESG. “An auditing approach helps so organisations can’t be accused of massaging the data to make themselves look good. Businesses want to show they are not greenwashing, but are genuinely taking action and holding themselves to account. The accounting profession can help here to make that difference.”
Although the prospect of audit reform looms large, she believes it has been pushed down the list of UK government priorities because of more pressing economic concerns and because successfully addressing such a complex challenge is no mean feat.
“I think it’s one of those things that just gets pushed off and pushed off because it’s difficult. No one’s really willing to grasp the nettle and come up with a decision. Audit reform is bound to come, it’s just when and in what format – but my goodness, they’ve certainly got enough research!”
She doesn’t anticipate any other regulatory bumps in the road ahead to keep her awake at night. Regulatory changes tend to be pretty well signposted, Lagerberg says, which makes it much easier to prepare clients for the inevitable upheaval. “The most difficult thing is when you get something that comes in totally unexpected and isn’t practical. But I think regulators have got a lot smarter about this. These days you see far fewer of those curveballs.”
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