Championing ethics

PASSING THROUGH: William G Parrett

William G Parrett

If all had gone well, William G Parrett would have made history last year itself. But his mother was unwell. So this is the first time that the chief executive officer (CEO) of one of the world's largest accounting and consulting firms "" the $16.5-billion Deloitte Touche Tohmatsu "" has ever set foot in India.

His visit on Monday comes close on the heels of Deloitte's Indian arm, Deloitte Haskins and Sells' acquisition of AF Ferguson, one of the oldest home grown accounting firms in the country.

Today, Deloitte has a formidable presence in India. Its clutch of domestic accounting firms includes Fraser & Ross, PC Hansotia, SB Billimoria & Co and CC Chokshi.

Even so, Parrett, a father of six, says Deloitte's growth here is largely going to be "organic because we are very positive about the Indian economy and the GDP (gross domestic product) is expected to grow".

It doesn't mean that his Indian shopping expedition has come to an end.

"If there are opportunities for us to align with other firms we would of course consider them. We understand the needs of some of these firms, and would be happy to enter into discussions with any of them," he says, adjusting his red tie. Prospective acquisitions include tax firms, consulting firms and audit firms.

That's why Parrett plans to invest $50 million in India over this decade.

And like most global companies, he claims he is "very bullish about both India and China". With the Asia-Pacific region accounting for 16 per cent of Deloitte's people and 18 per cent of global revenues, he wants to achieve the same scale for the region as Europe or the US. Fuelling this growth with at least 10,000 people will be India, he admits.

Globally, the firm operates under different umbrellas. In the UK, US and some other countries, it goes under the Deloitte & Touche tag while the global organisation is called Deloitte Touche Tohmatsu, after the merger between Deloitte Haskins and Sells and Touche Ross & Co. That's why, in India, the firm goes under the Deloitte Haskins & Sells brand name "as it wasn't a merger here".

And like Deloitte's operations the world over, he wants to display an Indian face. "We believe that we are not interested in being an European, Asian or American firm. We really want to be a firm with a local face. Fundamentally, that's the best business model, we think," he says.

In a sector where job hopping is the name of the game, Parrett, who took over the top job 18 months ago, has had a long innings with Deloitte, for well over 35 years.

"I am from the old generation where having fewer jobs rather than a lot of jobs was the norm," he says.

Joining a predecessor firm of Deloitte & Touche in 1967, the medium-built Parrett quickly became a partner a decade later. He was the co-founder of the firm's global financial services practice.

A regular at the World Economic Forum at Davos, Parrett's favourite topic is ethical behaviour. He claims that the measure of success of a company goes beyond the bottomline performance.

"It includes corporate and environment responsibility, customer satisfaction, quality and so on. Those companies have a holistic view on performance," he says.

Citing a Harvard Business Review case study, he points out that the net income of ethically behaved companies is more than that of profit-oriented ones.

"They trade at 14 per cent greater market value than companies that do not have that. Which is a pretty significant view for doing the right thing," he says.

So does it mean that a profit-oriented company is not ethical? "Not at all. But companies must take a holistic view. There are some terrific companies out there which are doing the right thing which is part of their every day fabric," he says.

According to Parrett, the Sarbanes Oxley Act 2002, implemented in the US after a spate of corporate financial misdemeanours, have made companies more accountable.

"The Act and the local variations of it in the various countries around the world have helped restore faith in the capital markets system. The cost is expensive, but not too expensive to restore overall trust," he says. The total cost of Sarbanes Oxley, reveals Parrett, is estimated at about $14 trillion.

But weren't some of the companies like Enron hailed for their ethical behaviour until the accounting debacle came to light? "Yes, it's been a reaction and history might say that it's been an overreaction. We had to have the Act. By having tools to measure current performance, we can avoid the mistakes of Enron in the future," he says.

Parrett shies away from identifying three global companies that score on ethical behaviour. He claims that many are his clients.

"It is unfortunate that we always spend all our time taking about the one that didn't do a good job as opposed to a multitude of companies that do a good job. We live in a good world because we have good citizens and good companies out there," he says.