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a bi-annual newsletter - keeping us in touch ALUMNI news
SUMMER 2021
in this issue “Together with the regular roundup of news and activity from across the firm, this issue focuses on BDO’s Risk Advisory Team and the work we do across all sectors.” Ruth Ireland National Head of Risk Advisory Services And hear from former colleagues: Simon Brown Head of Internal Audit & Risk, Sage Housing Shareen Jilka Head of Risk & Governance, IM Group spotlight ALUMNI news RETHINK Latest advice and guidance to prepare your business to navigate the new reality. GLOBAL RISK LANDSCAPE Nigel Burbidge comments on the risks faced globally and the impact of COVID-19. ARE YOU READY? Ruth Ireland discusses proposed reforms to the UK corporate governance issued by BEIS.
CONTENTS
3 5 8
News from the top:
X Managing partner update X New partner announcements X ESG: The need to have a clear narrative
11 13 14 16 17 23 24 28 29 31 32 33 35 37 39
TEAM FOCUS: RISK ADVISORY SERVICES
X Global Risk Landscape report: Nigel Burbidge X Are you ready for increased director accountability for internal controls?: Ruth Ireland X Delivering a new type of sustainability reporting: Fiona Davis X ALUMNI news spotlight interviews with Simon Brown and Shareen Jilka
Sector & Stream Roundup
X Special Feature: RETHINK – navigating the new reality X Business resilience for the new normal: Tim Foster X ALUMNInews publications X Webinar calendar X BDO and Xero join forces in global agreement X New networks at BDO X Awards & Achievements X BDO volunteers X Alumni bookshelf X BDO Stalwart retires with some sound advice
In other news
In other news
ALUMNI news
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your alumni officer, Lorraine Barwell
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WELCOME
Despite our low rate of staff turnover, some of our people do move on to other organisations. I enjoy keeping up with my former colleagues on a personal and business basis, looking for ways to continue supporting them in their new roles and help their organisations address their risk management and assurance challenges. In this edition of ALUMNI news , we catch up with former RAS colleagues Simon Brown , Head of Internal Audit & Risk at Sage Housing, and Shareen Jilka , Head of Risk & Governance at IMGroup. They share their current challenges and priorities, as well as reminiscing about their time at BDO and the strong culture they enjoyed here. It’s over 25 years since I joined BDO. In the last 5 years our offering has developed enormouslywith a wide range of new services and capabilities, reflecting the complexity of the environment our clients operate in and the need for deeper skills and technical knowledge across thewhole range of client operations. Our service is founded on understanding business risk, and developing solutions to optimise performance and support delivery of business strategies, which is particularly important in an environment wherewe are all embracing constant change. Our practice continues to go from strength to strength, with double digit growth year on year. More expansion is expected, both tomeet demand and develop new services, andwith that comes the opportunity for us to bring in new talent, as well as to offer significant development opportunities to our teams so that we can continue to enhance our professional resources and ensure we can provide our clients with the practical and insightful support they need.
Welcome
This edition of ALUMNI news , we shine a spotlight on our Risk Advisory Services (RAS) team and the services we provide. The world in which organisations operate keeps changing. New hot topics coming to the fore include environmental, social and governance performance and reporting, alongside the ever-growing challenges around digital technology, cyber security and data privacy. Such developments create both opportunities and risks for management teams. At BDO, we continue to innovate and invest so that our clients have access to the latest advice and assurance over these and other key risk areas. The growing needs of our clients continue to be met by our evolving and changing RAS team. We recently welcomed two new partners: Michael Stallard and Raoul Rambaut . This autumn we will also be welcoming another new partner who will focus on internal audit for large corporates. Our team services a wide range of industries and sectors including private, public, and not for profit entities. Nationally, around 60% of our work relates to internal audit, with over half of that work now performed for large corporates. Recently, strong demand for our services has come from sectors such as multinational manufacturing and specialist engineering, retail, property and construction, pet products, pharmaceuticals and life sciences. WELCOME TO THE SUMMER 2021 EDITION OF ALUMNI news
RUTH IRELAND PARTNER, NATIONAL HEAD OF RISK ADVISORY SERVICES t: 020 7486 5888 e: ruth.ireland@bdo.co.uk
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NEWS FROM THE TOP
MANAGING PARTNER UPDATE FROM PAUL EAGLAND
2021 - A YEAR WITH PURPOSE 2020 was quite some year. COVID-19 has infected countless millions of people worldwide and claimed more than 1.5 million lives. We’ve experienced national and local lockdowns, which brought both personal and business challenges for us all. In our firm, it accelerated change and focused attention on how the business operates. We have been given an opportunity to look at new ways of working and that has led to innovations that are transforming BDO: not just the technology we use but also how we work. The pandemic is changing how we all work. Never before has our unifying culture been more important. PURPOSE When we first introduced our core purpose – helping you succeed – it unlocked something very powerful in our culture. At the beginning of the COVID-19 pandemic, it was clear to me that we would benefit by ensuring that every decision we made was based on that core purpose: what will help our people, business and society succeed during the crisis.
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NEWS FROM THE TOP
CULTURE In today’s evolving business landscape, we are constantly evaluating and adopting new ways to recruit, empower and retain the best people in our industry, so that we continue to meet the growing needs of our clients and our standard of exceptional service. While the past 18 months have been undeniably disruptive, that disruption has provided us opportunity – opportunity to ensure we are creating environments that are built to deliver results while also fostering inclusivity and growth for our people Last Autumn, we published our 2020 Culture Report which tells the story of how the daily interactions between our people creates our unique culture. It brings to life how our core purpose is woven into the fabric of our firm and how this helps clients, our alumni and one another succeed. Now, while COVID-19 may have felt all consuming, it isn’t the only global challenge or issue that we’re facing. For example, in our Culture Report, we cover our Race Action Plan and our commitment to becoming carbon neutral.
From the personal and professional implications of the pandemic to the ongoing struggle for racial and gender equity, we each face our own unique circumstances, challenges, and possibilities. As our Leadership Team reflected on the impacts of the past 18 months, we knew we could do more to further strengthen our culture and ensure our people had the resources and support needed to thrive. We had the opportunity to evolve a key component of our People Proposition: our agile working strategy. As social distancing measures are eased and we emerge out of this third (and hopefully final) national lockdown, we have decided to take an agile approach to work post- pandemic and allow all our employees the opportunity to choose how they work in a way that best suits the task they are doing. Resulting in an amalgamation of hybrid working rather than a strict schedule, allowing our staff greater autonomy over their work and personal lives and still delivering quality work and exceptional client service.
DOWNLOAD our full 2020 Culture Report and read some of the many, many stories of how our BDO people, programmes and priorities come together to create BDO’s unique culture.
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NEWS FROM THE TOP
VALUES You never know the real strength of your company until it meets a stern test; the last 18 months has most certainly been challenging! We are not perfect. But our updated values – being responsible; being genuine; being collaborative; being bold – have really been in evidence this past year. When we reviewed and re-launched our new set of values last November, I remember discussing them within the company. “When tough time comes, your values guide your actions instinctively”. I had no idea those words were going to be so relevant, so soon.
COVID-19 has been stressful for lots of people – in the business and outside. I feel our company values have been really important. Being respectful of others’ personal
– and commitment to our common cause and to the business have been hugely beneficial during this difficult time. I know many colleagues have gone above and beyond to help the business and each other succeed.
circumstances, pulling together to help each
other – especially in dealing with increased workloads
RESILIENCE COVID-19 has proved that once we are all unified by both the need and the action plan, we have the people, skills and energy to steer us on the right course. I’m incredibly proud of the resilience, adaptability and positivity demonstrated by our people. My thanks go to all of them. After a year when we have had to rethink our industries and our lives, we look forward to a year full of purpose, adaptability, inclusion and innovation.
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NEWS FROM THE TOP
NEW PARTNER ANNOUNCEMENTS
PROMOTED:
Last Spring we put a number of measures in place to help us weather the storm, including a pause on promotions. However, as we entered 2021 we were determined to do all we can to continue to invest in our people for the long term, which saw the promotion of 20 new partners and the recruitment of a further ten externally:
Adam Spires
Ben Courts
Carole Le Page
Ed Peters
Graham Ellis
Lee Coccaro
Lucy Sauvage
Martin Haines
Rob di Santo SpencerAshworth
Thomas To
Tom Laird
Vinesh Bharadwa
DAVID PERRY Consumer Markets Assurance, London David’s experience in the audit and advisory space includes working with clients from start-ups to FTSE 250 firms. His focus at BDO will be to continue working with the Betting & Gaming and Licensed Retail sectors across both audit and assurance. ADRIAN HUGHES Technology Risk Assurance, London Adrian will support the wider team in applying advanced technology and data analytics to the audit process but will have a specific focus on maintaining consistent IT audit quality across our audit portfolio.
CAROLINE HARWOOD Employment Tax, London
Caroline joined the as the National Head of Employment Tax with 25 years of experience advising clients on employment tax and share plans.
DEE VAGHELA Consumer Markets Assurance, London
Dee’s role will see him support new and existing clients leveraging technology solutions, data analytics and controls specialists across our external audit portfolio.
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NEWS FROM THE TOP
NEW PARTNER ANNOUNCEMENTS
FIORENZA ONEKAWA Technology & Media, London Fiorenza specialises in supporting private businesses looking to raise capital in US markets and supporting public companies with regulatory reporting requirements.
DUNCAN CHANDLER Mergers & Acquisitions, London Duncan joined as the Head of Financial Services in the M&A team and will cover all areas of financial services with a core focus on lending, speciality finance, wealth, and capital markets. JENNIFER WALL Private Client Services, London Jennifer joins BDO’s partnerships team and will focus on working with private equity funds, providing specialist tax advice and reporting services. MATTHEW HAVERSON Technology & Media, London Matthew joins our Technology & Media assurance team with experience of working with companies cross the ownership life cycle from private business through to private equity and public companies.
MICHAEL STALLARD Risk Advisory Services, Leeds
Michael joins the firm as the national lead on Sarbanes-Oxley (SOx) and its impact on corporate reporting. His role will see him help build the firm’s UK Sox proposition, enabling businesses to respond to the financial reporting changes from the BEIS consultation.
RAOUL RAMBAUT Risk Advisory Services, London
Raoul has experience across the advisory space in areas including internal audit, technology risk, data privacy and third-party assurance. Raoul will focus on advising large, listed corporates with complex structures and processes.
RETIRED FROMTHE PARTNERSHIP Gary Hanson, London; Joe Newton, Birmingham; John Barker, London; John Everingham, London; Kim Hayward, Southampton; Leigh Lloyd-Thomas, London; Mark Bomer, London; Mark Sherfield, London; Omar Ripon, London; Richard Citron, London; Richard Morley, London; StephanieWilson, London; Stuart Barnsdall, London; Sue Bill, London;
As a group, our new partners have significant experience across a wide range of sectors and specialisms. Each one of them holds the skills and characteristics that will support our aim of helping our clients and people succeed.
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NEWS FROM THE TOP
ESG: THE NEED TO HAVE A CLEAR NARRATIVE by Matthew White, Senior Partner
WHAT CAN WE DO AT BDO? We are increasingly expected to lead transformative change and help build a sustainable economy. At BDO, we act on climate change because it is the right thing to do, our employees expect it, our clients and future generations deserve it.
Environment, Social andGovernance (ESG) is not new, but it’s nowmore important that ever. These threewords have immense meaning in terms of howtheworld is to adapt and change: and our role in shaping this direction. Key stakeholders, including employees, customers, suppliers, regulators, and local communities are demanding organisations consider howtheir operations impact theworld, their contribution to society and howthey conduct themselves.
AS A FIRM, BDO:
WORKING WITH OTHERS:
X Signed up to the UNGlobal Compact Agreement X Has committed to going carbon neutral X Has offset our identified carbon footprints from 2020, 2019 and 2018 combined (via independent sustainability consultant, Avieco Ltd) X Have been reducing our actual carbon footprint at a steady rate year-on-year: we consecutively reduced the firm’s intensity per FTE by 13% for the last two years X Have reduced our energy consumption, total emissions and emissions intensity for a third consecutive year X We review supplier contracts for their environment and sustainability commitments X We continue to be recertified for important environmental credentials which our clients and employees expect of us X More than half of our office locations are rated either very good or higher, with six offices rated ‘excellent’, by independent environmental consultants X We are working with our travel booking provider to measure and promote the carbon impact of each business journey requested in a post-COVID-19 world X Our people can now order and choose carbon-neutral BDO stationery and merchandise X We planted 300 trees in the UK as part of our Sunday Times Fast Track marketing partnership.
No single firm or individual can tackle climate change alone. The solution is collaborative. X As Senior Partner, I have joined Chapter Zero, a climate forum for Board Chairs and Non- Executive Directors to ensure climate change appears on the agenda of every boardroom table this year X We are helping many clients succeed on a variety of sustainability projects, including the development of Circular Economy, forest protection technology and renewable power programmes X The accountancy and business advisory work we do to help Renewable Energy companies with their corporate finance, forensics, audit or tax requirements is growing. Our partner, Marc Reinecke, has taken on the role as leader of BDO’s Global Renewables sub-sector, a team which is now receiving further attention and investment from across BDO globally X We partner with CleanGrowth, supporting tech start- ups find funding and a space to develop tech X Our Model Audit team is ranked #1 globally in the Renewables sector.
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NEWS FROM THE TOP
AS INDIVIDUALS:
HELPING SOCIETY SUCCEED:
X We want to keep working with our employees to identify the next right things to do X Our last Carbon report reveals something very stark: 74% of our carbon output was generated as a result of travel pre-C19. There is one very obvious way to bring that down! We are encouraging all our people to think twice before travelling as we ‘build back greener’ X We have trained Environment Champions in each office to help activate environment programmes locally X BDO employees can contribute to charities that deal with carbon offsetting, for example theWoodlands Trust, through bespoke Give As You Earn benefits X Our partners are also showing their commitment by personally paying to offset their individual footprints each year X At BDO, we offer a generous ten CSR days each year. We are asking our people to think about how they can use some of their days to get involved in local Sustainability or Climate Change initiatives.
Through our environmental and social enterprise partnerships we are leveraging business spend for good. As we continue with our ESG and Sustainable Procurement strategies we hope to explore working with a number of social enterprises and that this will be a positive journey that we can share with clients and business connections as an effective way to address some of the big global issues of our time. Below are some highlights from our current ESG partnerships:
AVIECO As part of our commitment to become carbon neutral we partnered with independent sustainability consultants, Avieco. Working with them, we have offset our identified carbon footprint 2018, 2019 and 2020 combined. Offsetting our emissions in this way helps to fund an African climate project, which provides efficient and safe Gyapa cookstoves to families across Ghana.
FROM BABIESWITH LOVE At BDO, we want all our working parents to feel valued and appreciated. We have partnered with award-winning social enterprise From Babies with Love, to give all our new parents a gift to welcome their new addition to the family. From Babies with Love give 100% of their profits to abandoned children around the world. Through our partnership, we’ll be supporting the UN Sustainable Development Goals and making a positive change in line with our Sustainable Procurement Strategy and ESG agenda, helping us to have a positive impact on those around us. To date, From Babies with Love has supported over 26,000 children in 39 countries. Read more about their purpose and impact here.
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DR. PEPPER FREAK
NEWS FROM THE TOP
WHISKY LOVER
MORE THAN A TAX MACHINE
SPEAKER OF FIVE LANGUAGES
Our people are wonderfully complex. They harness experience, insight and intelligence to uncover the full story behind the analytics.
DOUBLES TENNIS CHAMPION
www.bdo.co.uk
VISITOR TO 61 COUNTRIES
VAT ADVISER
MASTER OF THE FLOORDROBE
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NEWS FROM THE TOP T AM FOCUS: RISK ADVISORY SERVICES
TEAM FOCUS: RISK ADVISORY SERVICES
DEMAND FOR OUR RISK ADVISORY SERVICES (RAS) HAS GROWN STRONGLY, REFLECTING THE MANY EVOLVING CHALLENGES ORGANISATIONS FACE D emand for support has notably increased over the last 18 months, stimulated largely by the COVID-19 pandemic. Traditional RAS offerings such as internal audit have been particularly highly sought. The greater strains put on systems and processes by remote working led many boards to seek additional assurance across their organisations. Senior executives are also interested in considering the future of internal audit and how it can evolve to tackle growing challenges in areas such as cyber security and data privacy. Our risk management services have also been in high demand. As our latest Global Risk Landscape survey revealed, the events of 2020 have triggered the vast majority of organisations to re-evaluate their risk frameworks entirely. Alongside COVID-19, Brexit has heightened management teams’ interest in understanding the risks and challenges they face, and Brexit, for example, has created a higher level of potential supply chain risks. Our RAS team has therefore been working with clients to help them understand and assess their risks, looking ahead over the next few years, as well as providing support in developing risk management strategies. Recognising this demand, RAS has brought in a new ERM Director, Alisa Voznaya, to focus on providing support with governance, risk, and compliance (GRC), including enterprise risk management systems. Within our risk management offering, our Rhiza risk management software remains an important resource, underpinning many clients’ enterprise risk management frameworks. Over the last 12 months, our team has also been developing our business transformation service, which helps clients optimise or transform critical areas of their businesses. Our work includes supporting businesses through the IPO processes – ensuring they have embedded the appropriate control environment for a listed business.
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TEAM FOCUS: RISK ADVISORY SERVICES
RHIZA – MORE THAN RISK MANAGEMENT SOFTWARE
Rhiza helps organisations to implement and maintain robust risk, control and assurance frameworks proportionate to their needs. Designed to be an easy-to-use, practical tool, Rhiza successfully embeds the ownership, management and accountability for risk and control throughout your organisation. Effective risk management isn’t only about meeting increasingly complex compliance requirements. It also helps you and your colleagues to make better business decisions, based on sound management information.
REQUEST A DEMO to understand how Rhiza enables risk management frameworks to be stronger, more resilient and successful.
Watch video
This work can be highly innovative, as with a recent Financial Position and Prospects Procedures (FPPP) engagement, which included a greater focus on sustainability reporting. We expect two new senior people to join the business transformation team in October, with around 10 other professionals to be recruited over the coming 12 months. Many clients are looking to transform their businesses by investing in new technology. As a result, we are also expanding our Digital team, reflecting the many risks and opportunities created for organisations by advances in digital technology. We offer support in a variety of ways, including system selection, project management, systems assurance, and business transformation. Linked to this are our services in data governance and cyber security, which also address important client needs. We continue investing in our RAS services to address other client issues, such as the new challenges around internal controls and directors’ responsibilities in the light of the BEIS consultation on introducing a UK Sarbanes-Oxley style regime.
Such developments ensure that our regulatory compliance and assurance expertise is increasingly in demand. We are also continuing to develop our services in areas such as third party attestation and contract assurance. Given the ever-changing and increasingly complex environment in which both not-for-profit and corporate entities operate, managing risk will continue to be a high priority for senior management. So too will seizing the opportunities that come with a developing risk landscape. Our RAS team looks forward to continuing to develop its services to provide the technical and practical support our clients seek.
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TEAM FOCUS: RISK ADVISORY SERVICES
GLOBAL RISK LANDSCAPE 2021 THE ART OF THE UNKNOWN
which are more receptive to risk-taking. More than simply protecting against the negative impacts of a crisis, effective risk management also enables companies to identify new opportunities. The effectiveness of formal risk management practices can be enhanced by technology. Only 11% of companies we surveyed currently use technology to forecast future potential risk. However, we have seen increased investment in technology during the pandemic, including digital transformation initiatives and data analytics. Linking these investments with risk management could help businesses cope better, or even thrive, when the next crisis comes.”
Nearly half of global businesses say
Regardless of sector, people pressures came to the fore. When asked which risks caused the greatest pressure during the pandemic, 45% of executives cited low employee satisfaction and wellbeing, ahead of employee productivity. Many individuals faced new challenges, including a sudden switch to remote working, requiring employers to develop new ways to keep teams engaged, motivated and feeling supported. The environment of prolonged uncertainty and rapid change created by the pandemic also challenged existing risk management practices: 90% of executives say the events of 2020 have triggered their organisation
(25%), while double the number (52%) of risk- averse firms said they had experienced worse impacts than anticipated. Having an appetite for risk can therefore provide some defence against a crisis. In contrast, the research found that organisations with a strong blame culture can be slower to respond effectively. The survey reveals differing experiences across sectors. The professional services sector was affected less than others, with just 3% describing the impact of the pandemic as much worse than expected. Manufacturers also coped relatively well, with many adjusting their business models to make essential products such as personal protective equipment or ventilators.
COVID-19’s impact was worse or much worse than expected,
although businesses that welcome risk coped better during the pandemic. These are some of the key findings of our sixth annual Global
Risk Landscape report. BDO’s survey of 500
C-suite executives across Europe, the Middle East, Africa, Asia-Pacific and the Americas shows that nearly half (48%) of companies found the pandemic to have been worse or much worse than expected. Among businesses that welcome risk, this percentage falls to a quarter KEY HIGHLIGHTS: WE ENCOURAGE YOU TO INTERACT WITH THE DATA BEHIND OUR REPORT AND EXPLORE MORE HIGHLIGHTS, INCLUDING THE TOP BUSINESS RISKS IN 2021.
to re-evaluate its risk framework entirely.
The global pandemic has reinforced the need for companies to future- proof themselves in order to mitigate disruption in times of crisis. Businesses must be ready to react and adapt to uncertainty, and those which manage this most effectively are those
NIGEL BURBIDGE GLOBAL CHAIR, Risk Advisory Services
DOWNLOAD the full report
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TEAM FOCUS: RISK ADVISORY SERVICES
ARE YOU READY FOR INCREASED DIRECTOR ACCOUNTABILITY FOR INTERNAL CONTROLS?
by Ruth Ireland, National Head of Risk Advisory Services
R eforms to the UK coming, with important impacts on directors’ accountability for internal controls. Our RAS experts are helping affected businesses to understand corporate governance environment are what’s happening and prepare for the changes. The March 2021 consultation paper issued by the Department for Business, Energy and Industrial Strategy (BEIS) on ‘Restoring trust in audit and corporate governance’ will affect the UK’s major companies in many ways. As well as including more companies in the definition of Public Interest Entity (PIE) – including large private companies and others that may be in the public interest – there will be new requirements relating to internal controls for corporate reporting, audit committees and assurance.
Directors could also be required to carry out
Our best estimate is that premium-listed companies may need to comply from 2023/24, with other public interest entities, including large private businesses, following thereafter.
One particular proposed reform would increase the accountability of directors for internal controls over financial reporting and other non-financial information including environment, social and governance (ESG) matters, supplier payment policy and practices, performance indicators linked to remuneration, and anti-fraud arrangements. The BEIS consultation paper outlines proposals for implementing a UK Sarbanes-Oxley (SOx) style regime, including stronger disclosure and potential attestation requirements, albeit with great flexibility and proportionality. The Government is considering a number of options in relation to internal controls but has stated a preference for reforms such as a Directors’ Responsibility Statement. This would require directors to acknowledge
an annual review of the effectiveness of internal controls over financial reporting, explain the outcome of the review, and make a statement as to whether they consider
the system to have operated effectively. Disclosure of the benchmark system used tomake the assessment is also likely to be required, as well as any deficiencies in the control system and associated remedial actions. The timetable for introducing the Government’s final reforms is yet to be confirmed.
their responsibility for establishing and
maintaining an adequate internal control structure
and procedures for financial reporting.
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TEAM FOCUS: RISK ADVISORY SERVICES
However, based on our experience helping
Once your key stakeholders’ expectations are clear, ownership and project management should be established so that a project plan and budget can be developed covering the following fundamental stages: X Assessment – understand the current state of your internal controls and assurance X Design – develop your process documentation and risk and control matrices X Implementation – establish any new controls and carry out a proof-of-concept walkthrough X Embedding – complete your operational effectiveness testing regime and undertake any remediation actions
As your management team works through these stages, it’s important to consider other critical success factors, including: X Developing and maintaining effective governance arrangements X Assessing the current and desired organisational culture relating to risk and control X Using a digital governance, risk and control (GRC) tool to help create a unified but flexible approach to managing risk and controls in decentralised businesses.
businesses respond to other international SOx regimes, successful programmes can take between 18 and 36 months to implement and embed. Due to this lead time, early planning is encouraged. A key first step is to determine whether your business falls within the scope of the new PIE definitions. If it does, it’s important to understand the intentions and expectations of your directors and your audit committee with regards to the benchmarking system and the need for external assurance.
X Improve – look for
ways to enhance your controls and testing regime, including more automation.
DOWNLOAD our summary of the proposed corporate governance reforms and impacts on directors, and practical advice on the steps management teams can take to prepare.
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TEAM FOCUS: RISK ADVISORY SERVICES
DELIVERING A NEWTYPE OF SUSTAINABILITY REPORTING
by Fiona Davis, RAS Partner
E ndeavour Mining, a Natural Resources team led by Matt Crane, successfully completed its listing on the London Stock Exchange on 14 June. The listing was supported by a ground- breaking Financial Position and Prospects Procedures Memorandum (FPPP) gold mining company audited by BDO’s engagement carried out by the BDO Capital Markets team led by Chris Searle. Given the increasing scrutiny around environment, social and governance (ESG) issues, and specifically climate change and the impact it may have on businesses across the world, the sponsor for the listing (Barclays) and the Financial Conduct Authority
Members of our RAS team, led by myself, delivered a report on the systems, processes and controls in place at Endeavour for providing climate-related disclosures consistent with the recommendations of the Task Force on Climate- related Financial Disclosures (TCFD). Our report focused on the TCFD’s core pillars: Governance, Strategy, Risk Management, and Metrics & Targets. Based on the TCFD’s June 2017 recommendations, we assessed the ‘as is’ status relevant to each pillar. Our review provided visibility of the processes and controls that Endeavour has already implemented, corroborated through validation of key documents, as well as those actions which are planned in the near future.
Our final report also considered issues specific to mining, looking at how the internationally recognised GRI framework and the Responsible Gold Mining Principles (RGMP) had been incorporated to underpin the overarching ESG reporting mechanisms. A request for insight on sustainability reporting as part of an FPPP was unprecedented and resulted in the completion of a new type of reporting by our RAS team. Given that compliance with TCFD and other ESG-related requirements is an evolving area, we expect to see strong demand for related support services in future.
specifically requested a piece on sustainability reporting as part of the engagement.
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TEAM FOCUS: RISK ADVISORY SERVICES
ALUMNI news
spotlight
NAME
Simon Brown
Head of Internal Audit & Risk, Sage Housing
CURRENT JOB
DATES AT BDO
1999-2019
FORMER OFFICE London
“It was a small team and felt almost like a family,” he says. “I worked there with people who are still in BDO now – Nigel Burbidge, now a Partner in Risk & Advisory Services, and Paula Dutton,
When Simon Brown joined Sage Housing in 2019, it was as if the perfect job spec had been created for him – combining his expertise in internal audit, risk and the housing sector. Simon joined BDO’s Richmond office in Internal Audit as a senior auditor in 1999, after spending three years as an NHS internal audit specialist with Thames Audit Consortium. “I wanted something a bit different, more of a challenge and more opportunities,” Simon says of his move to BDO. “I wanted to work with different clients and different sectors in different places.”
He still remembers the challenge of his first assignment – auditing fixed assets and payroll at a further education college in Harrow – with no support on site as his expected BDO manager was off unwell. “I had to use new ways of working, in a short timescale and on my own,” Simon says. “I got to the end of the week and thought, what have I done?” Fortunately, he soon adapted to practice life and began to realise the opportunities it presented. In the following years Simon progressed through the managerial levels, ultimately becoming a senior manager. He also moved offices, first to Epsom and then to London’s Baker Street. He has particularly fond memories of Epsom.
now a Director.” Simon developed
specialisms in areas such as further education, housing and charities, but enjoyed the variety of BDO’s clients. He loved the worldwide travel involved. “I was going round war cemeteries in Ypres and Rome,” he says. “I went to New York, Hong Kong, Dublin – some great locations. The external auditors were very jealous.”
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TEAM FOCUS: RISK ADVISORY SERVICES
Although the work could be demanding and the deadlines tough, Simon enjoyed his time with BDO, staying with the firm for 20 years.
He is thriving on the challenges involved in establishing a new internal audit function in a fast- growing business. “I do everything from setting strategy and methodologies down to rolling up my sleeves and doing internal audits,” he says. “I am helping to set the risk appetite and design risk systems and risk reporting. I’m training staff in risk registers. I have just implemented a risk management system. I just love it – the challenge, the excitement and the ability to design and implement things the way I want them.” He enjoys this autonomy. “Internal audit has to be independent and sit outside the general management structure, so I don’t have a boss,” Simon says. “I decide what needs to be done and get it signed off by the Audit & Risk Committee, and then I do it.” Time is Simon’s most limited resource, but the imminent addition of a new Internal Audit team member should help ease the workload pressure. Simon is aware of the range of risks Sage Housing faces, such as health and safety risks in relation to its tenants, but also the perception risk
“But I see Sage as doing a lot of social good, using private money. Without Sage, that money wouldn’t have been invested in the sector.” that stems from its for-profit status. Sage Housing is 90% owned by US private equity giant Blackstone, which has invested billions into the housing sector. “One of our risks is that we are seen as in competition with housing associations and diverting money and resources away from them,” Simon says. Another risk is that the Government could change the Section 106 requirement for housing developers to make contributions that support the delivery of affordable homes. “We do deals with all the house builders to take the Section 106 elements off their hands, which is why we are able to grow so fast,” Simon says. However, he still sees huge opportunities in the sector,
and for Sage, which already has agreements with major house builders running unto 2025. Having worked for so long at BDO, Simon still has many contacts in the firm, and among alumni, with whom he maintains regular contact. Since joining Sage Housing, he has invited BDO to tender for various pieces of work and the firm now works on assignments such as external grant compliance and grant audits, led by Midlands-based partner Jon Lanes. “He really knows his stuff and is a great guy – a diamond geezer,” Simon says.
“I loved working with the people at BDO, as well as the variety of work,” he says. However, in October 2019 Simon moved to Sage Housing, a fledgling for- profit provider of affordable homes across the UK, attracted by the opportunity to set up an internal audit department from scratch. He initially joined as Head of Internal Audit, but quickly added Head of Risk to his responsibilities. “Sage is a new organisation – only started in 2017 – and it has a massive rate of growth,” Simon says. Since October 2019, the organisation’s headcount has increased from 120 to 230, and its property portfolio from 1,000 to 5,000. “We have another 14,000 in the pipeline and by the end of the decade we should have 30,000 properties in occupation,” Simon says.
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TEAM FOCUS: RISK ADVISORY SERVICES
ARE THERE ANY BUZZWORDS OR HOT TOPICS IN YOUR SECTOR? “Environmental issues such as being carbon neutral and sustainability audits are going to become more important,” Simon says. “Even if not required by regulation, there will reputational risks if everyone else starts doing them and your organisation doesn’t. “In terms of technical internal audit developments, audits are going to be much more data driven. Data analytics has got to be the starting point in terms of identifying potential problem areas in the business. People have been talking about it for years, but it’s still not as established it should be yet.”
WHAT ARE YOUR KEY GOALS?
“I want to fully embed risk management through the organisation,” Simon says. “I want to develop the Internal Audit function and become a really cutting edge service. Our reporting is pretty good, but there’s room for improvement. If the business keeps growing, I may see if I can extend the team and, from a personal point of view, see if there’s scope for a Director of Assurance role here that I could potentially move into.”
DO YOU HAVE ANY CHARITABLE INTERESTS?
“I am keen on homeless charities so I do a monthly direct debit to Centrepoint,” Simon says. “I’m also a member of the Litter Pickers of Southwater. At least once a month I go round our village in my Hi-Vis vest with my litter picker, clearing the local area. I really enjoy getting out and doing that for the environment.”
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TEAM FOCUS: RISK ADVISORY SERVICES
ALUMNI news
spotlight
NAME
Shareen Jilka
Head of Risk & Governance and Data Protection Officer, IM Group
CURRENT JOB
DATES AT BDO 2018-2020 FORMER OFFICE Birmingham
For Shareen Jilka, Head of Risk & Governance and Data Protection Officer at IM Group, the variety of work involved in her role makes every day interesting. Shareen joined BDO’s Risk Advisory Services team in Birmingham in 2018, enticed by the opportunity to work in a Midlands-based group and renew her previous working relationship with Tim Foster, BDO’s Head of RAS in the Midlands. The two were previously colleagues at PwC, and he also was a key factor in her subsequent move to KPMG, her penultimate consultancy role before BDO. “When Tim joined BDO, he grew the Internal Audit market for the firm,” Shareen says.
“The RAS client portfolio then was very much focused on the public sector and Tim wanted to grow the commercial sector,” Shareen explains. “So very quickly 50% of my time became spent on business development – drafting proposals, working with specialists to customise those proposals, and going out with teams to attend pitches.” Delivering internal audit services to new clients was also an important part of her work. “The big wins were my ‘children’,” Shareen says. Her major clients included a FTSE-listed restaurant, pub and bar, major international clothing brand, and international medical imaging services provider.
“In 2018, I was looking for a change and was intrigued by the opportunities at BDO and Tim’s five-year plan.”
Although on the point of joining HSBC, Shareen decided that BDO had more to offer. She joined the RAS team in Birmingham with a remit to spend 25% of her time as the department manager, looking after resourcing and staff. She was also called on to apply her experience with commercial businesses.
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TEAM FOCUS: RISK ADVISORY SERVICES
“It obviously highlighted the key risk areas for us,” she says. “But our Board is very forward thinking in terms of long-term decision making, so is always discussing proposals for new business, capital expenditure, going concern, the job security of our employees, and so forth. So I think we reacted well to COVID-19 and quickly moved to the final Realise phase of the Rethink model.” BDO provides external audit services to IMGroup as well as M&A support, most recently with a major parts and service businesss acquisition. Shareen is also signed up to BDO’s quarterly virtual forum organised with Michael Page, and which is led by Jon Lanes. She is still a good contact of Tim Foster, as well as other former colleagues. “I’m regularly in touch with members of my old team at BDO, either by text, social media or phone calls,” Shareen says. “We still have good relationships. Every time I catch up with the RAS team, it’s grown more and more.”
In creating create COVID-safe procedures and guidance for employees. We developed a 32-page guide for staff. It was a challenging time, but we got through it. We reopened our offices in Solihull in June 2020.” Since joining IMGroup, Shareen has added an insurance role to her brief. She has also been heavily involved in developing and rolling out a contracts management system for the automotive business. She reports regularly to the board on key risks, such a cyber and business continuity. Formal business continuity plans are to be developed for each site. “The next step is to roll out a formal risk management system,” Shareen says. “The board is on top of risk policy and risk appetite, so we just need to formalise and document it.” She also spends time addressing any issues that arise, such as data breaches and subject access requests. She is driving and embedding legal and regulatory compliance within the business, as well as reviewing processes and enhancing controls.
Despite thoroughly enjoying her time at BDO, the demands of a young family and desire to avoid weekend working prompted a move to industry. So in April 2020, Shareen joined IMGroup as Head of Risk & Governance and Data Protection Officer. With roots stretching back to 1976 and owned by founder Lord Edmiston, IM Group companies operate in various markets, including automotive, property and finance. There is also the charitable Grace Foundation, which aims to transform young people’s lives through holistic education. “I joined IMGroup smack bang in the middle of lockdown,” Shareen says. “One of the first things I was tasked with was to assist in developing the COVID-19 safe return to work practices. We needed to be on top of our procedures and risk assessments, including escalation processes if we had an outbreak. I had to go to our different sites to help come up with good solutions.
Shareen is thoroughly enjoying her work. “It’s such a varied role,” she says.
BDO’s Rethink model developed in light of the COVID-19 pandemic, identifying key stages, issues and opportunities for businesses, has been of interest to Shareen. rest of my life. But my job is different every single day.” “There’s lots to keep me engaged. My key concern, moving into industry, was that I’d be sitting at my desk doing GDPR and risk management for the
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TEAM FOCUS: RISK ADVISORY SERVICES
WHAT DID YOU ENJOY MOST ABOUT YOUR TIME WITH BDO?
ARE THERE ANY BUZZWORDS OR HOT TOPICS YOU’RE TALKING ABOUT? “Living in the COVID-19 pandemic, one of the key areas of focus here is health and safety,” Shareen says. “And at any time, if we have any injuries to our employees, that can cause reputational damage and hurt the profitability of the group. So health and safety is taken to the Nth level here.” The Government’s consultation paper on corporate governance reform is also attracting attention. “It’s going to be massive,” Shareen says. “They are calling it the UK SOx. If we thought GDPR was difficult, this is going to be something else. In terms of turnover and employees, we qualify for the compliance requirement. It will be interesting to see how the proposals evolve.” “First and foremost, it was about the team,” Shareen says. “When I joined, I think we were 12 people. By the time I left, we were about 21. It had a family feel. My main reservation on leaving was, how am I ever going to replace that?” She also really enjoyed her work and the opportunities to develop. “We were all allowed to grow with our roles,” Shareen says. “I had exposure to specialist reviews in areas such as GDPR, business continuity and corporate governance. I had exposure to senior key people at our clients and the opportunity to be the face of BDO. But help was always there if I needed it. I think my maximum growth came from my two years at BDO.”
WHAT ARE THE MAIN RISKS YOU SEE IN YOUR SECTOR?
“With COVID-19, health and safety risk is a key one on the agenda,” Shareen says. “Because of our international markets, Brexit also has an impact in terms of foreign exchange risk and political and economic risks. But our management board is very forward thinking. So they are always looking at longer-term decision making. How can we grow the business?”
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SECTOR & STREAM ROUNDUP
SPECIAL FEATURE RETHINK - NAVIGATING THE NEW REALITY
We have brought together a wealth of advice and knowledge and created a dedicated Rethink hub where you can find advice and practical guidance to help you rethink how you operate. Your business is unique and you are facing a unique combination of challenges as you rethink how to succeed, build resilience and realise any opportunities to grow.
You and your business are operating in a new reality. Your supply chains, your workforce, your sales and your financial health will have all been impacted. You may also need to check
TALKTOUS to discuss getting advice and support to overcome your specific business challenges.
that your governance, risk management and
regulatory controls are still fit for purpose. Even if your business has managed to keep operating and maybe thrive, you will be facing new challenges. Rethink is BDO’s global framework encouraging a broad reassessment around original business models and commercial assumptions that can be used to manage business priorities, address issues and leverage thinking.
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SECTOR & STREAM ROUNDUP
BUSINESS RESILIENCE FOR THE NEW NORMAL ALUMNI news spoke to Tim Foster, BDO Partner in Risk Advisory Services, about business resilience and why it’s more crucial than ever as we start the transition back to office life.
WHAT’S BUSINESS RESILIENCE ANDWHY IS IT SO IMPORTANT? Business resilience is your company’s ability to weather and adapt in moments of crisis and other unexpected scenarios. Most people know about financial and legal resilience. Other types of business resilience include your premises, your management, your employees and your customers and suppliers. The pandemic has affected all these areas in one way or another and it has been a testing time for business leaders.
WHAT CHALLENGES TO RESILIENCE HAVE WE SEEN OVER THE PANDEMIC? Over the pandemic there has
To help solve these issues, there needs to be quite a lot of investment, both nationally and by individual companies. UK network providers are busy trying to put in new networks, but this is having an impact on home workers’ ability to get online. In fact, several clients have told me that their staff are pushing to get back into the office as soon as possible because they've had so many technical issues at home. There is another big challenge testing the resilience of the tech sector right now. New tech equipment is difficult to source due to a combination of COVID, Brexit and the Suez Canal obstruction.
The resulting supply chain issues have led to a shortage of semi-conductors and computer chips, which are needed in everything from computers to cars. At the same time, global demand for semi-conductors has dramatically increased as people have needed more devices to work, learn and socialise from home. As a result of this perfect storm, IT companies are struggling to meet their clients’ demands for new devices and programmes. This global shortage of semi-conductors has affected several BDO clients and challenged their business resilience.
definitely been a strain on technology because of the change in ways of working. The technology space has faced some challenges, specifically around people working from home. For many of our clients, employees working from home has been a real test for the use of technology. I think overall we're finding that actually it's worked. However, on the other hand, continued – and increased –home working will test infrastructures further. Although there was a degree of tech resilience in 2020, people are now finding that their kit is starting to feel the strain. We’re all online longer during the day and that's putting pressure on equipment, such as laptops, which normally have quite a good life span.
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