What I’m Reading – Jeff Galt

With senior management roles in finance, accounting, assurance and risk management, Te Whanganui-a-Tara Wellington-based Jeff Galt CMInstD has worked in the public and private sectors in Canada, Australia and New Zealand. His work has taken him to North America, the United Kingdom, the Bahamas and Azerbaijan. 

Exotic locations aside, his commitment to governance now sees him on the Pharmacy Council of New Zealand and the board for Transparency International New Zealand. 

This week, the independent governance and assurance consultant shares insights from a book that also speaks to his connection with numbers. 

What is the name of the governance/business book you are reading or can recommend? 

Bean Counters: The Triumph of the Accountants and How They Broke Capitalism, by Richard Brooks. 

How would you describe the style of writing?

Brooks is an investigative journalist and, although the book is historical and factual, it is written in a conversational way. There is a journalistic flair which is sometimes a bit sensational – making it more interesting – but the points are well made with evidential support. 

What drew you to the book? 

It was recommended by a colleague in response to our conversation about concerns about ‘quality’ in the accounting profession. The area of external audit quality and the profession’s ‘performance’ is important to our financial (and often non-financial) assurance governance requirements.

What resonated with you the most?

Having worked for a Big Four accounting firm, I was more interested because of the history of the accounting and auditing profession, especially as I’m aware of some of the big failings of the profession.

The point made in the book – that “accountancy hides behind its ‘boring’ image to ruthlessly exploit the financial system we rely on” – should cause all directors to think about the value they obtain through accounting firms as a professional service. Another example is where the author refers to ‘How the Big Four ringmasters created a global tax avoidance industry”. If your organisation is getting tax avoidance advice, you really need to stop and think about what’s illegal, and what’s immoral. The former should clearly be out of bounds, and it’s a question of judgement as to how much the latter matters to your organisation.

What is something you have taken away from the book that now follows you into your board roles?

Directors often have an assurance expectations gap of what their financial attestation means for governors. In our Finance, Assurance and Risk Committee, we discuss the ‘value’ of the external audit attestation, the nature of materiality (specifically to our own organisation) and closely monitor the work of external auditors. Non-audit services are not obtained from the external auditors, full stop.

How does reading feed into your continued governance practice/learning?

It has become an (almost) welcome daily task. Keeping up to date with developments is only part of my governance interest, but most media news items have governance elements. 

The recent public sector governance stories have worrying aspects where reputable governors have been criticised for financial incompetence through government announcements – without balanced commentary. There are other stories of government board appointees being ‘well qualified in governance’ because they used to be senior members of parliament. It poses questions about what effective public sector governance looks like, and is it really viewed as a critical foundation of organisation success?

Who should read this book and at what stage in their governance career?

All directors should read this book and reflect on their organisation’s relationship with their external auditors/professional advisors.  

When you are not reading books on business or governance, what kind of books are you likely to pick up? 

I’m a keen reader across the book landscape. Booker, Ockham and Pulitzer Prize fiction-winners are on my list. I am currently reading Prophet Song by Paul Lynch and on a waiting list (position #94 in the queue) for Emily Perkins’ Lioness. I read a lot of non-fiction too: The Men who Killed the News by Eric Beecher is on my list ahead of Emily Perkins; and The Unsettled by Richard Shaw (Massey University Press) was excellent reading about his personal account of colonisation in Aotearoa New Zealand.

What are some of the most pertinent governance issues at the top of mind for you, and why?

• • Board effectiveness: how well boards self-evaluate and how well this supports board success
  • Conflict of interests: continued focus required on what seems a never-ending issue/problem for most boards
  • Integrity, transparency and ethics: a sound foundation for governors to operate successfully in their role
  • Critical for oversight, is that assurance is obtained as a fundamental part of how the organisation operates – and a critical success factor.

What has been the most surprising thing you have discovered about yourself and others while being on a board?

It’s been an interesting journey to see how a group of well-intentioned, knowledgeable and intelligent directors with different backgrounds have come together and work well alongside one another. This continues to be a work-in-progress that requires team building and development, including face-to-face interactions, and sharing lived experiences. I’m surprised I’ve been able to contribute so much, and I have also appreciated the positive feedback from my input.

If there was anything you want to see more of at the board table, what would it be, and why?

I would like to see improved governance skills because there is a need for all directors to develop in this area. It is a matter of ensuring the theory is understood (The Four Pillars is a great reference), and then continuing to put it into practice.

In particular, discussions around risk and opportunity need to be a component of almost every conversation, as opposed to just being a separate agenda item.

If you have a book you would like to share, contact sonia.yee@iod.org.nz.