BREAKING BAD HABITS
Stuart Dunlop overlooks a tough region for ACCA, the UK-based accounting body. He is the ACCA Regional Director for the Middle East, North Africa and South Asia: there’s nowhere else on earth more hostile and volatile than these. Based in the Emirates for a decade and travelling extensively across these two regions, he has experienced the region’s transformation first hand and understands its challenges only too well. Prior to launching his career in finance, Dunlop was a Director at Thomson Reuters, the global news and financial information organisation, which perhaps explains why he tends to see through the smoke. For instance, while many debate China’s belt and road initiative and impact on countries like Sri Lanka; or ponder South Asia’s lack of progress in terms of inclusive development; Dunlop sees things very differently.
Excerpts of the interview are as follows:
What trends in South Asia do you see in terms of unlocking potential?
Dunlop: The things that excite me are also the things that worry me. There are many reforms and initiatives countries in the region are trying to do. If delivered, the results will be transformational. If not, it will hold back the region. I’ve worked in the region for nine years. A striking challenge is the almost natural inclination to be protectionist. I’m encouraged to see that in recent years there is a willingness to open up to the rest of the world. One hopes the leaders shaping these inclusionist agendas will continue to have influence. A significant advantage the region enjoys is the availability of talent. South Asia has an uncanny ability to produce sound professionals. They have a gift for numbers and their conceptual thinking is phenomenal. There was a time when global firms came to this part of the world because hiring costs were cheaper.
They are now going beyond shared service centres. Over the years I’ve seen more international companies set up full operations in Sri Lanka. Some have taken equity stakes in local companies. This means that the talent pool is scaling up skills. Another great opportunity I see for the region is the role of India and China. Geopolitical relationships are often portrayed as complex and sensitive. But I have a more encouraging perspective. ACCA is very successful in China, as we are in South Asia and the Middle East. This means that there is a pool of people who share a professional ethos spread across the Belt and Road.
They have strong technical groundings. Governance and ethics are critical components of their professional accreditations. This can lead to deeper collaboration between countries and businesses across borders. The potential for collaboration in trade, finance, sustainability and governance is tremendous. Right now, the China-Sri Lanka relationship is government-to-government centred. The focus is around two major projects, the Colombo Port City and Hambantota Port and its free trade zone. No doubt the relationship can be controversial and complex, but there’s an opportunity to build something sustainable. Soon these will open up business-to-business opportunities, for companies in both countries, and the rest of the world as well. For professionals like ACCA accredited accountants, there’s an opportunity to contribute meaningfully towards governance and sustainability, and make a real impact.
Colombo is aspiring to become an international financial centre, to be what Dubai is for the Middle East, Singapore and Hong Kong for the Far East. What lessons can we learn from them?
It needs very strong leadership. If I look at Dubai or Abu Dhabi and their free trade zones and financial centres, they are not unqualified successes. The important thing is that they persisted. Establishing a financial or trading hub is a long-term view, you cannot think short term.
One thing Dubai did was to establish a robust regulatory authority and legal framework within its financial centre. This sits over and above its national laws and domestic regulations. This gave international investors confidence to put their money there. Dubai protected and managed these investments the same way London, New York or Hong Kong would have. This is something Dubai did well and Sri Lanka can draw lessons from that. Building investor confidence is crucial. A consistent policy is not good enough, you need to be clear about your long term strategic outcomes. You need a plan and strong leadership to get you there. Too often in this part of the region leaders go mission creep. Governments and businesses invest in grand projects without considering their long term objectives. This is not sustainable.
Where is South Asia in terms of adopting sustainable business practices?
Businesses are increasingly adopting sustainability into their core functions. And countries too. For instance, Pakistan is making an enormous effort on tax reforms. It’s embarked on this challenging odyssey with a clear vision to improve economic stability. It wants to reduce dependence on multilateral donors and lenders. Pakistan is taking control of its economic destiny. This too is sustainability. I see a growing focus in South Asia and the Middle-East on building sustainable economies. The Emirates, for instance, has been trying for many years now to diversify its economy away from petroleum. This is a paradox because they still have vast petroleum resources. Clear intent and strong leadership have put Emirates at the forefront of renewable energy in the region. Worldwide, businesses too are embracing sustainability; and increasingly so in this part of the world.
For ACCA, sustainability is a broad concept. It can apply to strategy, governance and capabilities within an organisation. It’s not limited to sustainability reporting. It’s more of an ethos that you’re trying to follow in everything you do. The environment is the first thing that comes to mind when you think of sustainability. This is without a doubt a critical consideration for business leaders. I do think it’s very interesting how aspirations and motivations differ across generations. There’s overwhelming evidence world-over that young people entering the workforce look for purpose. They want to make an impact on the world around them. If organisations want to attract and keep good talent, they must create opportunities for people to make an impact. Modern consumers are purpose-driven too. A return on investment or annual profit is no longer enough.
Business leaders can no longer sleep well at night even if they deliver satisfactory shareholder returns. They need to win a demanding market. Businesses must appeal to new-age consumers. Young consumers demand accountability around climate issues, human rights and ethics. To do this, business leaders need to be restless about the entire corporate agenda. Sustainability has to be at the heart and this is where accountants come in. You also have impact-investors who are shaping how businesses approach sustainability.
Is accountancy a profession that can attract young people who care deeply about the environment and social issues?
The profession is at a watershed, to be honest. I don’t think young people find accounting particularly attractive. However, the profession has a critical responsibility to deliver sustainability. This is not a visible role, but it makes a significant impact nonetheless. For instance, risk management is critical for sustainability. A sustainable business needs to measure and mitigate risks. Risk can come from anywhere from climate change to rapid technological overhauls. Change management is another critical role accountants can be good at. Sound corporate governance and compliance are other critical ingredients for sustainability. All these contribute to business strategies that manage the expectations of shareholders, employees who seek purpose, and fulfilling consumers’ lifestyle choices around sustainability and experiences.
This ensures a business is building a sustainable future for itself too. Traditional career paths are transforming, and some have already changed. This is true of accountancy. Professional accountants can choose how to add value to the workplace. A good friend is leading digital transformation at the organisation he works for. He is the chief financial officer. However, his responsibilities include developing complex products, understanding markets and managing people across teams from finance, marketing, product development and customer care. so he is not just limited to a traditional finance function.
This is a clear example of how both expectations and the role of accountants have evolved and continue to do so. I believe accountants can and should aspire to take on roles that deliver transformational change within organisations they work for, that’s a huge step from number crunching and keeping the books in order. In that sense, accountants can achieve great things and contribute in a tangible way towards sustainability. It would be encouraging indeed if aspiring young accountants envision that opportunity for themselves.