Accounting for performance

THINK TANK: This month's column on rising management thinkers focuses on Gary C Biddle whose award-winning work on accounting and corporate performance has proved significant against the recent scandals in global companies

The golf clubs he and his wife bought for each other two and a half years ago are still in their original packaging. He says he likes to play the flute, listen to rock and swim.

The trouble is, Gary C Biddle, associate dean of business and management and head, department of accounting, Hong Kong University of Science & Technology, doesn't get to indulge in any of these hobbies much.

When he is not teaching, he's working on research that focuses on corporate accounting and performance measurement "" both hot-button issues in global corporations.

Biddle was, however, acknowledged as a management thinker of growing influence several years before. It is evident in the awards that bristle on his CV: the KPMG Peat Marwick Research Awards which he won on three occasions, MBA Professor of the Year (1991-92, 1995-96) and so on.

Biddle is currently working on research that examines income measurement and value creation, especially economic value added (EVA).

His published work includes research papers on the use of accounting information in financial markets, performance measurement, foreign exchange listings, inventory accounting, cost allocations, auditor decision- making and audit sampling.

In that respect, HKUST proved a good fit since its faculty has initiated some ground-breaking research that has placed it among the the world's top research universities. "All HKUST faculty have PhDs, half from the top 20 universities in the world," he says proudly.

Biddle attracts attention because he highlighted the crucial role of accounting long before Enron catapulted the discipline and its practitioners into global focus. "Simply put," he says, "accounting is the foundation on which financial markets and modern economies are built. Rattle that foundation and share prices tumble worldwide."

Investor losses over the past three years as a result of these scandals have been enormous. Biddle reckons that, "It equals $ 2,000 for every man, woman and child human on the planet."

So what do disasters like Enron and Worldcom mean for the accounting profession? "Enron and related events emphasise the importance of accounting. Going forward, auditors will demand higher fees and more thorough reviews. Ditto for executives and directors to protect themselves. This means boom times ahead for accountants," he predicts.

Research may have put him in the reckoning in the competitive field of management thinking, but Biddle is also considered a good teacher, a fact that was acknowledged when he was voted Professor of the year at HKUST in 2001.

"Professor Biddle is a first-rate researcher and a very inspiring accounting educator. He is also an excellent mentor for junior colleagues and PhD students," says Gim S Seow, associate professor of accounting, School of Business, University of Connecticut, who has been associated with Biddle since 1987 and with whom he has published two papers.

Biddle is also the face of the Kellogg-HKUST executive MBA programme along with Kellogg School of Management's, Lakshman Krishnamurthi.

But the Ohio-born Biddle could have nearly missed his affair with accounting were it not for the influence of his younger sister, who is now CFO of an insurance company. Which is why after reading chemistry and computer science at university, Biddle changed track to accounting and economics.

He says he has a particular penchant for the Chicago School of Economics. "This led me to the University of Chicago where I stayed for 10 years, first as a student and then as a professor," he says.

If Biddle was not a professor he would have taken up law. "Today, I would probably favour managing a company," he says.

Like Madan Pillutla, the London Business School professor who was featured in this column earlier (June 10), Biddle's memorable moments are linked to travel.

"We love to travel and we have wonderful memories of places that we have visited with our daughters," he says. The professor claims to have been to every country in south-east Asia, except Laos. In India, he's been to Goa, Jaisalmer and Varanasi.

The professor says that the greatest influence in his life has been his wife Patricia, whom he first met at the University of Chicago.

"She remains my best counsel," he says. Patricia is a surgeon and now an HKUST MBA. No doubt, the influence works both ways.