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Enoch Yiu

When Michael Andrew was appointed global chairman of KPMG International last October, he made a landmark decision to base his office in Hong Kong instead of the traditional choice of London or New York.
The 55-year-old accountant is the first global chairman of a Big Four international accounting firm to be based in the city, underscoring the increasing importance top accountants place on this region.
 The other three firms - PwC, Ernst & Young and Deloitte - still have their global chairmen based in New York. 
Andrew's first career port of call was not accountancy but law. Born outside Melbourne, he initially worked as a corporate lawyer with chemicals company ICI for seven years. 
He entered the accountancy profession when he joined Peat Marwick's tax department in Melbourne after being reluctant to relocate with ICI to Papua New Guinea. 
The rest is history.
 Andrews became a chartered accountant soon after joining Peat Marwick in 1984 and was promoted to partner four years later. He was then sent to Amsterdam to work on the merger between Peat Marwick and KPMG. 
In 1992 Andrews was asked back to Amsterdam to run the international tax centre and also open offices in Warsaw, Prague, Moscow, and Budapest. In 2000, he became managing partner of the Melbourne office, and headed up the Australia practice seven years later. 
Andrews became Asia-Pacific chairman last year before taking up his current post in October. The father of two daughters, he now lives in Hong Kong with his wife, Mardi.
He describes his new home as a perfect and convenient place to do business. In his office in Prince's Building, Andrews discussed his strategy to manage a global network of firms with 145,000 staff and his plans to recruit a further 200,000 over the next four years. 
 Why has KPMG decided to base its global chairman in Hong Kong? Is it related to your firm's future development plans? 
It reflects the fact that world economic power is now moving from the West to the East. China, India, Russia and other Asean countries such as Thailand and Malaysia are our focus of expansion. These markets are important to us. 
Unless you are based here, you cannot understand the local culture, regulations and dynamic. We also want to make a statement that we are different from the other Big Four as they have their global chairmen in New York. Logistically, Hong Kong is the best choice as it is a location where you do not need to change flights to any part of the world and you can go everywhere in the city by MTR within 45 minutes. You spend more time on travel in New York or London. 
 What are your expansion plans? Do you have any targets?  
Total revenue for the last fiscal year for KPMG was US$22.7 billion. I want to add over US$10 billion in incremental revenue over my four year term by achieving 10 per cent growth each year. In terms of people, we now have 145,000 globally and announced plans last year to recruit 250,000 over the following five years - we recruited more than 50,000 in the past 12 months. 
 What people are you looking for?  
We want both fresh graduates as well as experienced accountants. We announced plans to hire 75,000 graduates over the next three years.  We also hire experienced accountants. 
In terms of educational background, we do not only need accountancy graduates but talent from other sectors such as climate change, engineering, supply chain management and IT professionals. 
We want 60 per cent of our staff to be accounting professionals and the rest from other disciplines. We are not only focusing on auditing but also advisory and tax services, so we need talent from different industries. 
 There have been many accounting problems related to Chinese companies listed in Hong Kong and the US. How do you prevent this happening?  
We have procedures to ensure our clients are ethical and that their duty is to the capital markets. We have to carefully choose our clients and help educate them in terms of the practices and corporate governance requirements for international markets.
 Our firm will help companies make sure they understand they need to give accurate financial information and have proper internal controls when they want to list in overseas markets. 
There are many good examples of good Chinese-listed companies that are behaving very well overseas and the frustration is that there is a small element that have damaged the brand for all the other Chinese private enterprises that want to list and raise capital overseas. We have an important role to play to ensure financial statements are accurate and that there are proper risk controls. 
 KPMG is operating in 150 countries. Do you recruit locally or do you bring in staff from other markets? 
We recruit locally but we also send staff overseas when needed. Locally trained staff understand the language and culture, however, staff with overseas experience can also offer services to clients looking to invest in other markets. For example, we have sent some Chinese and Hong Kong staff to Canada, UK and Australia to serve clients in these countries who want to invest in mainland China. 
 Different markets have different cultures, languages and pay scales - how do you cope with these differences?  
We offer the same standard of training for all markets we operate in. We also have the same quality review systems across all operations. 
How do you reward the good performers and get rid of poor performers ? 
We keep the best talent by providing them with good training and a clear career road map, so that they know how to secure a good career with our firm. For the poor performers, we need to be honest, as we are all about constructive feedback. If someone is not in line with our values then we need to indicate to them their career is better off outside the organisation. 
It is sad when you have to tell them they are not suitable for this industry, but it is better to be honest. You have got to make hard decisions for the organisation because if you don't, then the rest of the organisation is compromised. When you are talking about a high-performance culture, you have actually got to lead and demonstrate this.
In addition, if someone has invested a lot of time at KPMG, you need to treat them as a very loyal employee and your role is to actually help them at this stage of their career. I once had to tell a very experienced 54-year-old partner to leave as he was not performing, which was hard. But two years later he told me that it was a good decision to ask him to leave as he had since joined another business sector, which worked out well for the next stage of his career. 
 What is your best and worst management experience? 
My best experience was when I introduced an interactive way to pitch to clients in 2001. Instead of the traditional way of asking the directors of the companies to listen to our presentation, I asked them to tell us what they wanted and that resulted in a lot of good discussion. We won three of the largest Australian audits in the space of two months using this approach. My worst one was in 1991 when I had to lay off 15 per cent of our staff in Australia when the economy was in a downturn. That was sad as the layoffs were not related to the performance of the staff. We had a generous redundancy package and we reduced salaries by 10 per cent so that we could keep extra staff, but we still had to let a number go. So that was a tough experience. 
 What makes you cry or lose sleep? 
I have lost sleep when considering I could have done better or if I found I have not done my best on something. But usually I sleep very well. 
 How do you balance your work and family life?  
I am not very good at it. I have two daughters who are now 26 and 24. My wife, Mardi, is a French and German teacher and we have been married for 31 years. Hong Kong is a good place to call home as it is close to all destinations that I need to visit. Everyone I need to see in the world comes through Hong Kong, including the CEOs of our clients when they are on their way to mainland China or other parts of Asia. There is a very strong business community here. It is a very efficient place full of energy and there are lots of good restaurants. During the weekend I like to play golf, which is a good way to switch off. I also breed and race horses and like to play tennis and cricket. 
 What advice do you have for someone who wants to become an accountant? 
Learn the basic core skills and have integrity in your job. It's also important to have a global mindset as the world has changed dramatically. Each market is different in terms of the language, culture and history and you need to invest time to understand these differences. Clients you deal with will probably have had a number of overseas secondments and they will want you to be conversant in those different markets.
The frustration is there is a small element that has damaged the brand for other Chinese private enterprises
40%
The percentage of KPMG staff that specialises in other areas such as climate change, engineering and IT



New KPMG chairman Made the right move