'It’s a false choice that businesses can either be profitable or they can do the right thing': ACCA Chief Executive

Good financial performance is always matched with good governance and long term thinking, believes Helen Brand, chief executive of Association of Chartered Certified Accountants or ACCA, the global body for professional accountants. In an interview with BT, she speaks about the need for financial planning by small businesses and start-ups, and about ACCA’s India footprint. Edited excerpts:

Chartered accountancy remains a very popular choice amongst Indian students. What kind of a base does ACCA have in the country?

ACCA is a global qualification in London. It’s been based on international standards since 1996 so it's more of a complimentary proposition. We are very much focus on the corporate sector, financial services and public sector, rather than the regulated provenance of the chartered accountants. India has been ACCA’s fastest-growing markets for a number of years now, fueled by economic development and demand, most importantly, from employers who really value the skill set that our members and future members bring. At present, we have about 3,000 members in India and about 60,000 future members who are people at various levels of study.

In India, there’s also a growing shortage of skilled professionals in the audit and accountancy field…

Absolutely. In fact, there's a global shortage of skilled professionals, but particularly in an economy such as India where there is growth, and that growth needs to be sustainable. Employers are looking for the kind of capability that comes from professional accountants. I think all the bodies which provide that kind of qualification are in demand at the moment.

How can strong corporate governance drive financial profitability and sustainability for businesses?

I don't think you can have one thing without another. Good financial performance is always matched with good governance and long term thinking. It's increasingly important that that is integrated into what the board of a company discusses. I think sometimes it's a false choice that is put before businesses that they can either be profitable or they can do the right thing. Profit in the longer term is going to depend on the reputation of business and the reputational risk of bad governance is that the business will cease to exist and the brand will be completely undermined. I think a short term view that only focusses on profit without having that those good governance principles around it actually means that you're not going to have a business in the longer term.

What about corporate governance in start-ups, because a lot of them are only chasing profits or working to expand their user base?

The best friend of a small business or a start-up is a financial professional or a professional accountant, because these businesses may not have the bandwidth to employ that capability within their businesses. Small businesses have high rates of failure, and very often that's associated with a lack of financial planning. What sounds like boring issues, like cash flow, actually matter a lot.

ESG or Environmental, social and governance is one of the dominant themes which is coming up now, and companies are gearing up on it. Your view?

There's been a lot of focus, I think, on the E, particularly in respect of climate, which is quite right. You just have to look out of everybody's window in the world to know that something needs to happen. But I think the S is one that probably has been underplayed. And so, for example, at ACCA, we are looking at sustainability. We did a report this year on the living wage and the role that finance function can play in helping to drive living wage considerations in organisations. I don't think that is a topic that maybe we would have talked about 10-15 years ago, but it's really important in terms of the positive difference that we can make. Everyone talks about just transition, and we all talk about well being, which is part of sustainability, but of course, there's physical well being, mental well being, there's also financial well being, and those three things all come together, and businesses can play a very important role in the equity and fairness of their behaviors, which then supports families and communities.