Keith Farlinger took on the role of global CEO of BDO in November 2017. His previous global roles include CEO Americas and being a member of the Global Board, the latter when he was managing partner of BDO in Canada. Wayne Berson, CEO of BDO USA, is the Chair of the Global Board, and has been a member since 2012. They were speaking to Allan Evans, Global Head of Business Development & Marketing.
AE: Keith, how would you describe 2017, not just for you personally, but for BDO as a whole?
KF: 2017 has been a year of change across our organisation – but also one of growth.
Our results for this year show a year on year upturn in revenues of 8%, one of the highest percentage increases in our profession: it is worth noting that BDO is the fastest-growing global organisation in the accounting and auditing profession for the last 10 years.
One of the most significant changes for BDO, and for me, was that Martin van Roekel stepped down as global CEO at the end of October, after six years in which BDO grew globally from revenues of US$5.7 billion and 135 countries and territories in 2011, to US$8.1 billion and 162 countries and territories in 2017. I must reiterate my thanks to Martin for his commitment and for the excellent part he has played in ensuring that BDO is ready to meet the challenges of the future.
AE: Wayne, as the momentum for growth is plainly continuing across all BDO firms, can you tell us a little about where in the world we’re seeing noteworthy development?
WB: In 2017, M&A activity was led primarily by our firms in Canada and Norway – as well as, I’m proud to say, BDO in the USA – but it’s been supported by numerous firms in each region and across all our service lines. In fact, it was a record year of M&A deals and BDO has been named one of the top M&A advisers worldwide in global league tables. Our corporate finance teams completed a staggering 1,200 transactions worldwide in 2017, with a combined value of more than US$54.5 billion. We’re now a Top 4# worldwide M&A financial provider in the Thomson Reuters 2017 rankings and a Top 4# Due Diligence provider in the Mergermarket 2017 rankings.
AE: Keith, can you expand upon what effect the current changes impacting our profession might have on BDO?
KF: As I take on the CEO role, I expect renewed challenges because the pace of change is accelerating – and our challenges are not only at individual country level, they are global. Regulators consider BDO to be a global organisation and expect all our firms to have the same consistently high standards – so quality is becoming ever more important. We’re #BDOProud of what we do for our clients, who themselves are becoming increasingly global: they expect a consistently seamless service wherever they operate, and BDO delivers this.
AE: Some of our competitors have suffered very publicly from cyberattacks in recent months – are you worried for BDO?
KF: Threats are also global and we face the very real possibility of a cyberattack in one firm risking the reputation of all. For the sake of all of our firms, and in particular their clients, we are actively managing that risk. Cyberattacks ring alarm bells with BDO clients because threats to data security are complex and constantly increasing – and we are, of course, not only entrusted with a large amount of our clients’ often confidential data, we also offer digital and cybersecurity advice.
So it’s critical that we focus on security, at global and local level: for instance, our ongoing Global IT Security Programme is coordinating efforts to ensure that our data is consistently monitored and protected. We’re also mindful that raising awareness and providing relevant training is a vital first step.
AE: Wayne, as a leader within a BDO firm, how do these globally-initiated security efforts affect your firm?
WB: I believe that taking such steps at local level is vital and the IT Directors in every BDO firm are strongly encouraged to ensure these practices are prioritised and applied locally. Our IT managers know to check and fix any vulnerabilities as a matter of urgency, and they are assisted in this by security checks being offered by Global IT’s Information Security Officer.
Relatively simple steps such as creating strong passwords, reviewing or changing all passwords regularly and multi-factor authentication for all high privileged administrator accounts are all quick wins: I, along with all our firms’ leadership, strongly promote such measures, as this can no longer be viewed as only an issue for the IT community.
AE: Some of our firms are investing in particular capacities to facilitate their progression, I believe?
WB: Indeed, and across every region: in the Americas, when BDO Puerto Rico brought on board an outstanding government consulting and auditing practice last year, it took the firm to number 1 in the island. In Europe, our Finnish firm completed mergers in the areas of corporate finance and technology services, and BDO in Ireland is well positioned to take advantage of Brexit, with their global trade team advising on international and European customs and trade. And in Asia Pacific, our firm in India is transforming and growing as, thanks to renewed leadership and capital policy initiatives, it’s able to take advantage of local regulatory changes.
AE: Keith, in our profession, rapid advances in technology and automation are enabling new competitors to enter the market easily – but what about our clients?
KF: We understand that disruption is affecting our clients equally and BDO can provide the advice and understanding of the market forces affecting their industries. Our current transformation strategy is also addressing this: our firms are investing in technology together to deliver even better insight and value to our clients.
AE: Our brand promise is to be the leaders in exceptional client service: do you see this, as you visit BDO firms around the world?
KF: Yes I do. I’m #BDOProud that we have the right size and the right people to continue to deliver on our promise of exceptional client service. Our firms are agile and responsive: many are taking the lead in digital transformation and building solutions that other firms can adopt. This facilitates their becoming efficiency enablers and helps to accelerate the digital transformation of our clients.
WB: I agree. The uniqueness of BDO is in building together globally for the benefit of our clients, while still recognising that certain situations are specific to a local market. That’s why you’ll find one BDO firm developing an advisory offering to address changes in local regulation while another creates service centres to automate and improve efficiency.
KF: Above all, we care about our clients and about helping them succeed – so we recruit and train great people who build relationships that are based on trust. I would like to thank all of our 74,000 people across the world for their dedication to delivering exceptional service to our clients and for their willingness to converge their skills and work together. I would also like to thank the Global Leadership Team and the Global Office for their commitment and support.
AE: Wayne – any closing words?
WB: For my part, as I look ahead, I also look behind to those who have driven our progress. I’d like to thank previous CEO Martin van Roekel for his inspirational leadership over the last six years – and to thank Keith for taking on this role at such an interesting and challenging time. As always, I am grateful to my Global Board colleagues for their insight and support and I look forward to seeing our continuing advancement in the year ahead.
AE: Keith – the last word goes to you.
KF: Thank you, Allan. In summary, it has indeed been a year of change and we will continue to embrace change and to stay abreast of advances in technology so that we can offer new services in new ways to our clients across the world. I’m looking forward to a strong and profitable year in 2018: it’s time for BDO.