Welcome to My RSM World

As CEO of RSM,  I’m always on the move working with RSM member firms in over 100 countries around the world. My travel gives me a unique perspective on both local challenges facing businesses and global trends shaping their future in a shifting economic landscape.

International accountancy has always been a fast-paced, exciting and rewarding industry. As technical as it may seem, our industry is also very much a people business. Through this blog, I plan on sharing with you  insights from my colleagues, our clients and other industry leaders which I hope you find interesting. And of course, I will keep you updated with news from within the RSM World.

I hope you enjoy reading.

Jean Stephens

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Celebrating Success

The leaders of Europe’s finest businesses gathered in Athens last week for the gala ceremony of the European Business Awards 2013/14, sponsored by RSM International.

Congratulations from everyone at RSM to the Ruban d’Honneur recipients, the European Public Champion, the winner of the Chairman’s Selection Award and the Lifetime Achievement Award, and of course, the ten overall category winners.

Category

Winner

Country

The RSM Entrepreneur of the Year Award

Airspeed Telecom

Ireland

The UKTI Award for Innovation

Olea Medical

France

The Millicom Award for Environmental & Corporate Sustainability

RTR Rete Rinnovabile

Italy

The Award for Customer Focus

World First

United Kingdom

The Employer of the Year Award

Jaba Recordati S.A.

Portugal

The BP Target Neutral Growth Strategy of the Year Award

NNG

Hungary

The Import/Export Award 

Cosentino Group

Spain

The Infosys Business of the Year Award [t/o €0-25m]

Arvento Mobiles Systems

Turkey

The Infosys Business of the Year Award [t/o €150m+]

Galenicum Health S.L.

Spain

The Infosys Business of the Year Award [t/o €26-150m]

B2X Care Solutions

Germany

The European Public Champion

Skroutz

Greece

The Chairman’s Selection Award

Diamantis Masoutis

Greece

The Lifetime Achievement Award

Magna Marine

Greece

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EBA entrepreneurs’ impressive growth during trying times

This is the second in a series of articles leading up to the European Business Awards Gala Event on 27 May 2014. RSM is the lead sponsor of the European Business Awards, click here for more information on the programme.

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Since the European Business Awards began, RSM International has sponsored the Entrepreneur of the Year Award, and we have always felt an affinity with the values it represents: innovation, tenacity and progress.

It bears repeating that these have been a difficult few years for European businesses and what impresses me most about this year’s nominees for the RSM Entrepreneur of the Year Award is the sheer scale of growth some of them have seen during these trying times.

For example, Gregory Trebol was a little known electric-bicycle designer and manufacturer only eight years ago. Now his company, Easybike, is seen as one of the world’s leaders in its sector, enjoying a 25% market share in France and also a truly global market with a turnover of over £16m, 72% of which was exports to European countries and 5.4% to Asia and Australia.

Another which stands out is Airspeed Telecom from Ireland that was founded in 2003 that reports it has experienced year-on-year growth of 40%. This telecommunication-products business can now list reputable companies such as Zurich, Dairygold and RTE as clients. It is a staggering achievement considering how the Irish economy has fared since the crash.

I believe that all businesses, young or old, big or small, can be inspired by the entrepreneurial spirit that exists in all the companies that are nominated for the RSM Entrepreneur of the Year Award. Every billion-pound business had to overcome the same problems as these companies to get where they are today, and in this sense, entrepreneurs embody everything the programme is about. I look forward to seeing these European companies leading the world of business for years to come.

 

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Finding the right balance

Guest Blog: By Phil Forrest, Chairman of the Judges, European Business Awards

This is the second in a series of articles leading up to the European Business Awards Gala Event on 27 May 2014. RSM is the lead sponsor of the European Business Awards, click here for more information on the programme.

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As the European Business Awards 2013/14 reaches its final stage and prepares for the announcement of the winners at the Awards Banquet on 27th May in Athens, it creates the opportunity to reflect on some of the insights into the European business community that the awards have raised.

The cross section of successful businesses in this year’s programme are not a representative sample of the EU business community as a whole. In fact, Jean’s previous blog highlighted that the most successful sectors and businesses in the EBA are actually bucking the trend within their own economies. Yet, they shine an important light onto the challenges of business today and, in particular, the areas on which business leaders are placing greater emphasis. For example, in past years the category attracting the highest number of entries has been Customer Focus. However, this year the highest number of entries is for Innovation (20% of entries). This is significant in that when the economic recession first hit, an EBA white paper identified that successful business leaders saw innovation as one of the keys to recovery. This year’s entries reflect the fact that the innovative processes and products introduced over the past three years are now starting to bear fruit.

These changing circumstances are also having a large impact on confidence levels among budding European entrepreneurs, as shown by the rise in entries for the RSM Entrepreneur of the Year Award, accounting for 14% of entries. This shows that at the entrepreneurial level, confidence continues to grow, and the diverse range of businesses represented is an indicator that the health of the EU business environment continues to improve. A recent survey compiled from the EBA judges emphasised this. One of the judges said:

The key thing about entrepreneurship is to have a balance between great ideas and the necessary correct investment climate for the business. This balance is slowly but surely being achieved.”                                                                              

However, the survey highlighted that when it comes to innovation and entrepreneurialism, every European country differs in what it needs to create that perfect ‘balance’. A judge remarked:

In Turkey, the most important thing needed to encourage entrepreneurship is inexpensive and easy funding for projects.”                                                 

Another said:

“Germany would really benefit from creating a one-stop shop where anyone can access the information necessary to start a company in one day. There are plenty of funds, initiatives and the like for start-ups but less so for later-stage financing.”                                                            

Both the EBA entries and judges’ survey paint a healthy economic picture while promoting cautious optimism for economic recovery in Europe. It is encouraging not only seeing this picture develop but also getting to meet and share the enthusiasm of the many high-calibre businesses leaders that are contributing so much to showcase European business success. Their ability to innovate, not only in terms of product or service creation, but also by entry into new markets, and experimenting with new concepts to achieve sustainable success within an ethical framework deserves great applause. As Chairman of the EBA judges, I look forward to meeting these outstanding business leaders at the Awards Banquet evening in May.

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EBA celebrates manufacturing in Europe

This is the first in a series of articles leading up to the European Business Awards Gala Event on 27 May 2014. RSM is the lead sponsor of the European Business Awards, click here for more information on the programme.

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This year’s European Business Awards will not only be a celebration of success, but also of variety, as the National Champions and Ruban d’Honneur recipient list is composed of 130 companies from over 20 different sectors across the business spectrum. Upon viewing the list of hopefuls there are a number of sectors which stand out: there are 17 technology companies, ten software firms and ten businesses in the environmental sector. However, by far the most prominent sector across Europe is manufacturing, with 23 businesses making it to the final.

This ties in with the Industrial Structure Report, released by the European Commission in February this year, which highlighted the significance of the manufacturing sector within the European Union. The report noted that manufacturing has a hugely important role in both the recovery and the growth of economies across Europe. Nevertheless, after analysing the performance of EU industrial and service sectors, it concluded:

“Manufacturing sectors have been hit more severely by the crisis than services: manufacturing, as a proportion of economic output, has declined significantly.”

The manufacturing sector is currently going through a very difficult period and the European Business Awards gives us the opportunity to celebrate the manufacturing companies that have bucked the trend of decline across the continent.

Conversely, the same EU report praised the growth of pharmaceuticals within the manufacturing sector, saying:

“The pharmaceuticals sector has experienced sustained growth since the start of the financial crisis.”

In fact, the pharmaceuticals sector is the only EU manufacturing sector that has increased its share of output since 2000. With regards to the European Business Awards, only five of the aforementioned 23 manufacturing companies are pharmaceutical, highlighting the range of businesses that exist in the competition, even within each sector.

With six manufacturing companies from the UK and Greece alone, some countries are pushing the sector forwards more than others. We can use the European Business Awards to share best practises and learn from those who have accomplished great things in trying times. The gala ceremony in Athens at the end of May will not only be a celebration of success and variety, but it will also highlight and recognise those who have experienced growth in difficult circumstances.

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RSM welcomes Baker Tilly in the UK

I was delighted to announce earlier this morning to my RSM colleagues around the world, and to the media, that Baker Tilly, the 7th largest firm in the UK, is joining the RSM network. As RSM continues its drive to be the foremost provider of audit, tax and advisory services to internationally dynamic clients we are focused on securing the strongest representation in all markets globally to ensure we are best positioned to meet client needs.

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The UK is a critical market for RSM and following the acquisition of our previous member firm, RSM Tenon, by Baker Tilly, this gave both Baker Tilly and RSM the opportunity to begin talks to see if there was a potential fit between us. Naturally, these discussions were in-depth and the progression over the last few months has included full due diligence on both sides as well as visits by Baker Tilly’s leadership to RSM members in Asia Pacific, Latin America, Europe, Africa and the US.

Baker Tilly shares the rigorous commitment to quality that distinguishes our network. There is a clear alignment with RSM’s aims and strategic vision, and the firm has the capabilities and expertise to support RSM clients worldwide.

I am confident that their admission will be of significant benefit to our clients, people and businesses worldwide and I very much look forward to working with them.

To read the full press release, click here.

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Saudi Arabia: diversification and entrepreneurialism

I was recently fortunate enough to visit The Kingdom of Saudi Arabia for the first time. Our member firm, Al Sabti & Bannaga, is based in the capital Riyadh and the trip was an important opportunity to learn more about the Saudi economy as well as potential future opportunities for RSM International.

Saudi Arabia is the biggest Arab economy, with the second largest oil reserves in the world, accounting for 90 per cent of its fiscal revenue (including 95 per cent of exports and 70 per cent of government revenue). It also has an incredibly large and young population, with around 27 million people and an average age of 26 years old.

Internationally known for its high-income economy – it has the 19th highest GDP in the world – I was particularly interested to see what was being done about the Kingdom’s youth unemployment problem. Brought about from a lack of proper education and a stagnant private sector which has relied too heavily on foreign workers (Saudi Arabia’s population includes nearly 8.5 million expatriates) I was pleased to learn of initiatives being introduced to boost spending on job training and education, with a particular focus on technical skills needed for the private sector. Indeed, just last week it was announced that UK skills providers have won contracts worth £1bn to run education colleges in Saudi Arabia as part of the Saudi plan to build 100 new colleges across the country.

The youth of Saudi are breaking with traditional careers in the public sector as a new wave of entrepreneurialism sweeps the country. As reported in a recent Financial Times article, only 43 per cent of Gulf Cooperation Council respondents preferred a public sector job, down from 64 per cent in 2012, with a greater number of young people in the Middle East and North Africa wishing to start businesses.

The Saudi government are also redirecting their focus for the economy as it looks to attract medium sized businesses and diversify beyond the oil industry. Social development and infrastructure projects, introduced to advance Saudi Arabia’s economy, have invested capital into its scientific and engineering sector, further cementing its prominence in these sectors. Nowhere has this been felt more than in Saudi’s second-largest city of Jeddah, (population 5.1 million), which has benefitted greatly from the government’s efforts. Keen to diversify beyond the capital Riyadh, the government has spent $373 billion since 2010 on establishing six “economic cities” in different regions of the country to promote foreign investment, and create new business and entrepreneurial hubs.

Change is happening quickly in Saudi and it is no surprise that the World Bank rates the country as the easiest place to do business in the entire MENA region. We at RSM International are keen to highlight this and look forward to seeing further business growth develop, both for our member firm and the country.

 

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Islamic Accounting Standards – bridging differences between accounting practices in Islamic and conventional finance

There has been much in the press recently about aspects of Shari’ah law being implemented in the UK and ahead of the UK Islamic Finance Investment Group Summit in London this week, I was reminded of the distance the West has to go in incorporating many Islamic principles.

This is certainly true in accounting. For some time, international accounting standards have been set by Anglo-American governing bodies, with little consideration given to the principles of Shari’ah or the economics of the Islamic states, in which interest payments and monetary speculation are prohibited.

Until recently, accounting methods adopted by Islamic banks have therefore been largely unregulated, and many Islamic financial institutions have had to develop their own accounting methods for contracts that govern their work. This process is inefficient, usually based on deliberation between the external auditor and management as well as, in many cases, the organisation’s in-house religious supervisors (Shari‘ahSupervisory Board).

I was therefore pleased to see that The International Accounting Standards Board (IASB) met with banks across the Middle-East last week to discuss how to bridge differences between accounting practices in Islamic and conventional finance. The London-based organisation’s International Financial Reporting Standards (IFRS) have a key role to play in major centres for Islamic finance such as Malaysia and Saudi Arabia.

With Islamic member firms in many areas across the world, the RSM network is supportive of a system that allows Muslim finance professionals and institutions to have a greater input into international accounting standards. With the IASB’s recent visit, and summits taking place in London and Dubai this week, the signs are that the industry is moving in the right direction.

For a good introduction into Islamic Finance, please refer to RSM’s Introduction to Islamic Law written by Dahman Awardh Dahman, Managing Partner of RSM Dahman in United Arab Emirates.

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