A strong future for corporate finance
As Mergers and Acquisitions Boom, Jon Moulton Says Now is the Time for Corporate Finance Faculty to Expand Its Influence and Go Even Further
Regular readers of my production – a small but highly valued group – as well as occasional readers will be fully aware of my willingness to criticize things. But, for once, I’m just going to remind us all of some of the good things we have.
Perhaps above all we should be grateful for a system of government that generates an ever-increasing mass of regulations and legislation. This ensures ever greater knowledge of ever more material, which means we can get good compensation for our intelligence and our endless education and re-education, as we help clients navigate the pitfalls that constantly arise.
A collective voice
This ever-growing collection of knowledge and experience has driven the need for a professional body that provides a center of excellence and a voice for the industry. This grew out of the growth in the accountancy profession of specialists in mergers and acquisitions, beginning in the late 1970s and which has since grown stronger. I was a manager in one of the first corporate finance units in 1979 – the technical base was tiny compared to today’s world, but the work was rewarding. Fortunately, it remains interesting and challenging for those in the industry.
The Faculty of Corporate Finance ensures a strong representation of its members, many of whom come from outside the accounting world, which adds very welcome specialist skills. There is strong membership momentum, with over 30,000 chartered accountants working in our field. For large accounting firms, transactional work is their third largest cost driver after auditing and taxation.
The faculty has an exceptionally high quality board of trustees, with much of the industry represented at CEO level. The meetings are effective and well attended – I know that because I join them and you know I would say otherwise if it wasn’t true.
Our highly skilled and hardworking management team is busy responding to government proposals (unfortunately endless), which requires the rapid mobilization of members with the expertise to respond sensibly and quickly. A lot of nonsense never makes it into the law book because of our interventions and our lobbying. As a general rule, some form of consultation requires a response every month, often more. You would be really surprised by the volumes.
Over the past year, examples include a huge effort on national security and investment law, where intense interventions at ministerial and parliamentary levels succeeded in making the proposals much more practical in their scope and application. .
The faculty has established strong and constructive ties with the Houses of Parliament, as well as with government departments. This is an ongoing effort given the routine changes of ministers and officials. We also clearly influenced Lord Hill’s review of listed companies. Work on access to finance has also impressed, where enormous efforts have produced very useful material, affecting the design and operation of government programs, which have multiplied during the pandemic.
The Business Finance Guide is widely acclaimed. The Corporate Finance qualification is valuable and well managed. The faculty provides excellent and up-to-date technical guidelines of very high quality. For example, the imminent publication of a comprehensive public-private guide comes at a very opportune time. He also produces this magazine, which in my opinion is much better and more useful reading than other trade publications. Its printed format remains popular and has been particularly well received during the lockdowns.
As business returns to some degree of normality and mergers and acquisitions demonstrate their ability to spur growth and innovation, the proposed restructuring at ICAEW is both a threat and an opportunity for the faculty, which is well deserved. a prominent place at the top table. As of this writing, it appears the faculty is losing importance. It’s totally in the wrong direction. It deserves better access to funding and greater priority to keep pace with the needs of members – many of whom are unaccountable – across the world. We have, and should want to keep, an excellent organization.
About the Author
Jon Moulton is a CF and a Fellow of the Institute for Turnaround Professionals. Jon has a long track record of turnarounds, having invested in them for 30 years and with considerable success. Jon is currently Chairman of FinnCap, the leading AIM broker, the International Stock Exchange and Anti-Microbial Research Limited. He also chairs the Better Capital and Greensphere funds, an alternative energy infrastructure fund.
He writes, broadcasts and speaks regularly on corporate finance and financial matters. Jon is also Director of the think tank The Center for Policy Studies and Honorary Fellow of University College London.