“It is a false choice that companies are either profitable or can do the right thing”: ACCA chief executive.

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

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

ACCA is a global qualification in London. It has been certified to international standards since 1996, so it is a more free offering. We focus largely on the corporate, financial services and public sector, rather than the regulated source of chartered accountants. India has been ACCA’s fastest growing market for many years, driven by economic development, demand and, most importantly, from employers who truly value the skill set that our members and future members bring. At present, we have around 3,000 members in India and around 60,000 future members of people at different educational levels.

In India, there is also a growing shortage of skilled professionals in the field of auditing and accounting…

definitely. In fact, there is a global shortage of skilled professionals, but especially in an economy like India where there is growth, and this growth must be sustainable. Employers look for the kind of ability that comes from professional accountants. I believe that all bodies offering this type of qualification are in demand at the moment.

How can strong corporate governance drive the financial profitability and sustainability of companies?

I don’t think you can have one thing without another. Good financial performance is always combined with good governance and long-term thinking. It is increasingly important that this is integrated into what a company’s board discusses. I think sometimes the wrong choice companies are presented with is either they can be profitable or they can do the right thing. Long-term profit will depend on the reputation of the company, and the reputational risk caused by poor management is that the company will cease to exist and the brand will be completely undermined. I believe that a short-term view that only focuses on profit without including good management principles around it actually means that you will not have a business in the long term.

What about corporate governance in startups, since many of them are just seeking profits or expanding their user base?

A small business or startup’s best friend is a financial professional or professional accountant, because these companies may not have the bandwidth to employ this ability within their business. Small businesses experience high rates of failure, often linked to a lack of financial planning. What seem like boring issues, such as cash flow, actually have great importance.

Environmental, Social and Governance (ESG) or environment, social and governance is one of the mainstream topics that has emerged now, and companies are preparing for it. Your point?

I think there’s been a lot of focus on the eastern region, especially in terms of climate, which is absolutely right. You only have to look out the window of everyone in the world to know that something has to happen. But I think S is the one that’s probably been underestimated. So, for example, at ACCA, we look at sustainability. We produced a report this year on the living wage and the role the finance function can play in helping drive living wage considerations in organizations. I don’t think this is a topic that we might have talked about 10 to 15 years ago, but it’s really important in terms of the positive difference we can make. Everyone talks about just transformation, and we all talk about well-being, which is part of sustainability, but of course, there’s physical well-being, there’s mental well-being, and there’s also financial well-being, and those three things come together, and businesses can play a very important role in fairness and equity in their behaviors, Which then supports families and communities.