executive director’s report kevin arnold executive director
TRANSCRIPT
Executive Director’s Report
Kevin Arnold
Executive Director
To provide a brief update on major developments and Strategic Plan Implementation since November 2010.
Scope
Start Point & Stats
Annual Conference: Dubai
Very successful conference with:• 206 Delegates• 96 accompanying guests• 71 countries represented
Annual Conference: Paris
Biggest conference attendance in Nexia’s history with:• 235 Delegates• 105 accompanying guests• 67 countries represented
Scope
Scale of our Network
Organisational & Financial Growth 2011
• 2011 Fee Income: US$2.33bn +12%• 548 Offices -5.5%• 2,308 Partners
+1.2%• 21,000 + Total Staff +5%
Financial Performance: 2009 - 2011
Major Developments 2011
• Amalgamation of Europe Middle East & Africa• Forum of Firms• Trial of new Annual conference structure• EU Green Paper • Strategic Plan Implementation
Amalgamation of Europe + Middle East & Africa regions• Consistent with international structure of peer
organisations, networks & associations.• Enables Nexia to strengthen resources/capacity of Middle
East & Africa firms through access to European resources on quality/training & education and marketing.
• Continue to maintain regional identity of Europe/Middle East/African groups within larger structure.
• No fee increase planned.• Board approval in principle.• Decision taken at November Council meeting.
Major Developments 2011
Forum of Firms
Forum of Firms
• Extensive debate and members views surveyed• US$64,000 annual contribution• Membership application accepted-effective from
October 2011
The objective of the Forum of Firms (Forum) is to promote consistent and high quality standards of financial reporting and auditing practices worldwide. The Forum brings together firms that perform transnational audits and involves them more closely with the activities of the International Federation of Accountants (IFAC) in audit and other assurance-related areas.
Objective
Full Members• ISAs• IESBA Code of Ethics• ISQC 1• Globally coordinated internal QA reviews• Report annual compliance• Dues
FoF Membership Obligations
• Baker Tilly International • BDO• Constantin Associates Network• Crowe Horwath International• Deloitte Touche Tohmatsu Limited• Ernst & Young Global Limited• Grant Thornton International Ltd• HLB International• IECnet• INPACT Audit Limited• JHI• JPA International
• KPMG International Cooperative• Kreston International • Mazars • Moore Stephens International Limited• Nexia International • PKF International Limited• PricewaterhouseCoopers International• RSM International Limited• Russell Bedford International• SMS Latinoamérica • Talal Abu Ghazaleh & Co.
International• UHY International Limited
FoF Full Members (24)
Major Developments 2011
• Members’ comments in Dubai led to trial of new Annual conference structure
Major Developments 2011
• Trial of new Annual conference structure.• Purpose: reduce time out of office.• Reduce costs without impacting on quality of conference.• Net result is a loss of half a day conference time.
2012 Conference Format
• Annual Conference Washington: 17 – 20 October:– Wed 17th: Committees Meeting– Thurs 18th: Audit Forum/ Board Meeting/Welcome Reception– Fri 19th: Conference Day 1– Sat 20th: Conference Day 2/Gala Dinner
2012 Conference Programme:Regional Conferences
EU Green Paper
• Potential significance to Nexia• Working Group established – to be
broadened• Board meeting January 2012 to review
findings
Major Developments 2011
Strategic Plan Implementation Update
Ambitious-Now Comes the Hard Bit!
• “Been tried before-won’t work”.• Note use of the word: “Consider”; need your support.• No plan survives contact.• Let’s just do it!
Strategic Plan Implementation Update
So, how have we done?
Underpinning Themes-The Bench Mark Questions
• Help members grow their business-organic growth.• Increase international referrals.• Improve members’ benefits-the reasons for joining-
and staying.
Strategic Objective: 1
Encourage members to develop an international focus to their practice and provide them with appropriate resources to apply a consistent Nexia approach to cross border engagements.
Tasks
Provide guidance to Members in developing …..international dimensions to their practice and leveraging the Nexia brand in their marketplace.
• Nexia Collaboration:
– Nexia Nordic– Central & Eastern Europe
Already Completed
Tasks
Develop a portfolio of marketing resources, templates and guidelines that enable Members to implement consistent Nexia brand messaging on cross border engagements and answer the question: “Why Nexia?”
Already Completed
• Increased Marketing Committee Output:– Mobile Application. (over 4,000 downloads)– Re-designed Web Site– E news letter-Nexia Global Insight– Bespoke Market reports– International Marketing Plan Template for members– Corporate video
Strategic Objective: 3
Ensure that Nexia maintains a strong presence in key strategic markets and identify opportunities to extend and enhance international coverage where appropriate
Rank Network Fee income ($m)1 Deloitte 26,578.002 PwC 26,569.003 E&Y 21,550.004 KPMG 20,630.005 BDO 5,283.606 RSM International 3,878.907 Grant Thornton 3,673.008 Baker Tilly 3,065.809 Crowe Horwath 2,729.0010 PKF 2,449.4011 Moore Stephens 2,151.1012 Nexia 2,101.0013 HLB 1,692.0014 Kreston 1,673.0015 Mazars 1,185.6016 UHY 648.4017 Russell Bedford 376.0018 ECOVIS 258.6019 IECnet/CPA-USA/EPR 119.1020 Reanda International 61.5021 SMS Latinoamerica 53.7022 UC&CS America 24.90
Network Positioning
Country Position
Australia 15th
China 10th
Japan 11th
South Korea 7th
France 14th
Germany 6th
Italy 17th
Netherlands 10th
Poland 19th
Russia 10th
South Africa 12th
Spain 11th
Turkey 1st*
UK 7th
Canada 14th
Mexico 7th
U.S.A. 17th
Brazil 14th
Nexia Firms National Positioning
Regional Composition: 2011
Scope
Improving Presence
More aggressive-proactive approach needed
Membership Gains 2011• Brazil• Luxembourg• Nicaragua• Italy • Philippines• Botswana• Switzerland
Membership Gains 2011• Togo• Angola• Australia
Tasks
Direct particular member firms to target cities in which there is a need for a member, making them responsible for recruiting there. If necessary, being prepared to fund selective recruitment.
Strategic Objective: 4
Raise the level of confidence between members by benchmarking and monitoring required standards of performance in relation to membership obligations.
Tasks
Develop, implement and maintain a system for monitoring and reporting member compliance.
Obligations of Membership• Category One: Failure to comply will lead to Board
review. Each case considered on merit but the board retains the right to expel the firm from membership.
• Category Two: Important but do not impact upon other Member Firms to the same degree as Category One.
• Data base established and performance record reviewed regularly by Executive Director and Regional Chairs.
• Performance record reviewed each year by Board of Directors, regular non-compliance could lead to expulsion.
Non Compliant Firm Procedure
Member Firm CATEGORY 1 OBLIGATIONS CAT. 2 OBLIGATIONS
Payment of Fees
Amount of Debt
QCR
Acceptance
Annual Survey
Membership Criteria
Effectiv
e Communication
Complaint
s
Regional Conference
Annual Conference
Web Site &
Stationery
Web Site Director
y
Input to
Nexia
Publications Total Score
xxxxxxxxxxxxxxxxx 3 3 3 -1 -1 3 -1 3 3 -1 3 17
xxxxxxxxxxxxxxxxx 3 -1 3 3 -1 3 -1 3 3 -1 3 17
xxxxxxxxxxxxxxxxx -1 7,834.92 3 3 3 -1 3 -1 -1 -1 3 3 13
xxxxxxxxxxxxxxxxx 3 -1 -1 2 3 3 3 3 -2 -1 -1 11
xxxxxxxxxxxxxxxxx 3 -1 -1 2 3 3 3 -1 -2 -1 3 11
xxxxxxxxxxxxxxxxx 3 -1 3 2 3 3 -1 -1 -2 -1 3 11
xxxxxxxxxxxxxxxxx 3 -1 3 2 3 3 3 -1 -2 -1 -1 11
xxxxxxxxxxxxxxxxx 3 -1 3 -1 -1 -1 -1 3 3 -1 3 9
xxxxxxxxxxxxxxxxx 3 -1 3 -1 3 -1 -1 -1 3 -1 3 9
xxxxxxxxxxxxxxxxx -1 2,678 -1 -1 2 -1 3 -1 3 3 -1 3 8
xxxxxxxxxxxxxxxxx 3 3 -1 2 -1 3 -1 -1 -1 -1 3 8
xxxxxxxxxxxxxxxxx 3 3 -1 2 -1 3 -1 -1 -1 -1 3 8
xxxxxxxxxxxxxxxxx 3 -1 -1 2 -1 3 -1 3 -1 -1 3 8
xxxxxxxxxxxxxxxxx -1 2,582 -1 -1 2 3 3 -1 -1 -1 3 3 8
xxxxxxxxxxxxxxxxx 3 -1 -1 2 3 3 -1 -1 3 -1 -1 8
xxxxxxxxxxxxxxxxx -1 3,008 -1 3 2 3 3 -1 -1 3 -1 -1 8
xxxxxxxxxxxxxxxxx -1 3,711.00 -1 3 3 -1 3 3 3 -2 -1 -1 8
xxxxxxxxxxxxxxxxx 3 3 -1 2 -1 3 -1 -1 -2 -1 3 7
xxxxxxxxxxxxxxxxx 3 -1 -1 2 3 3 -1 -1 -2 -1 3 7
xxxxxxxxxxxxxxxxx -1 18,847.01 3 -1 3 -1 3 -1 -1 -1 -1 3 5
xxxxxxxxxxxxxxxxx -1 2,000 3 -1 2 -1 3 -1 -1 -1 -1 3 4
xxxxxxxxxxxxxxxxx -1 2,006 -1 3 2 -1 3 -1 -1 -1 -1 3 4
xxxxxxxxxxxxxxxxx -1 2,000 3 -1 2 3 3 -1 -1 -2 -1 -1 3
Why is it important?
• Defines quality in broader sense.• Objective basis to terminate membership.• Sends a message from the board.• Develops confidence between members.
• Purpose:– Encourage– Raise quality– Confidence Building between Member firms to
increase referrals.
Non Compliant Firm Procedure
Tasks
Ensure that there is a rigorous set of procedures and guidelines governing Nexia’s internal operations and its interaction with Members.
• Greater transparency.• Approved by Board of Directors.• Form the basis of our Compliance requirements.
Nexia Operating Procedures
• Criteria for Membership.• Responsibilities of Contact Partners.• International referral work between firms.• Obligations of Membership.• Expenses Policy.• Un-Budgeted Expenditure.• Role & Constitution of Umbrella Groups.• Meritorious Service award.• Firm of the Year award.
Already Completed
• Meritorious Service– ….normally given to an individual nearing the end of
long service….– ….qualifying period has been significant, but that the
achievements during that service merit special recognition.
Awards
• Firm of the Year– A pro-active ambassador and champion for Nexia
International within their national or international markets.
– Willingness to collaborate/share ideas and expertise with other members….
– Participation/leadership on Nexia committees/interest groups.
– Submission of material/articles which can benefit member firms or the network.
Awards
• Firm of the Year– Attendance and active participation at Nexia
conferences/meetings.– Participation in other ad hoc Nexia activities.
Awards
Awards
• Firm of the Year– Attendance and active participation at Nexia
conferences/meetings.– Participation in other ad hoc Nexia activities.
– A winning firm is not eligible to compete in the two following years
Tasks
Support the development of specialist groups….
Specialist groups
• Business Advisory Group.• Global Tax Group.• Private Wealth Group.• IT & Internal Services Group (?)• Lawyers Group(?)
Specialist groups
• Great opportunity to increase business. • Need support.• Global organisations best developed from bottom up.
Tasks
• Develop a Charter for Umbrella Groups which would outline the Board’s expectations.– Done
• Hold a centrally funded Umbrella Chairmen’s meeting at least once every two years.– Meeting to be held in London 14 – 16 March 2012
Strategic Objective: 6
Encourage referral business flows across the network and support collaboration between members.
Cross Border Data Base
• Working Group Members:Ian Stone (Nexia Court Australia)Chris Appleton (Smith &Williamson UK)Dan Vanderberg (Rehmann USA)
• Purpose: To identify potential subsidiary clients.• Protocol developed.• Asia Pacific pilot trial.• Great potential.
Strategic Objective: 7
Encourage greater knowledge sharing opportunities amongst Members through the continued development of international technical committees, specialist interest groups and technical training initiatives.
Tasks
Create an International Education, Training and Secondment Committee in order to develop and coordinate the ‘softer’ benefits of membership.
• Now Nexia International People Development Team.• People Development Framework.• New Manager & Senior Manager Courses.• New Partner Course.• IFRS Training.• Secondments-Publicise and Evaluate.• People Development Brochure.
International Training & Secondments Committee - Output
Tasks
Consider the creation of an IFRS Help Desk.
Tasks
Consider the creation of an IFRS Help Desk.
IFRS Initiative-Christian Fuchs-Ebner Stolz
Tasks
Consider and review the level of secretariat support required to facilitate and improve greater knowledge sharing and specialist committee delivery.
Welcome Mike AdamsNexia International’s Tax Director
Strategic Plan – Some Realities
• Full time employees:• Crowe Howarth (No 9): 25• PKF(No 11): 20• HLB (No 12): 22• DFK (No 20): 14• Nexia – 10. (International plus Europe & Australia)
Strategic Plan Implementation Update
So, how have we done?
Strategic Plan Implementation Update
Achieved much but must maintain the momentum.
Any Questions?