Accountants can bring key skills to the executive suite
At first glance Ed Pahud, is the last person that you would expect to be running an office-products distribution company and a laser-toner re-manufacturing plant.
"I know my career path is a bit strange," said Pahud, a chartered accountant and president of Kirkland-based Kerr Norton Inc. "Our business requires very sector specific knowledge, and you'd think someone from operations or sales would be in charge. So I consider myself lucky to have the opportunity."
While accountancy has long been considered a staff function in many companies, a surprising number of executives use accounting training as a base for an ultimate move into the corner office. According to Canadian Institute for Chartered Accountants data, 8.0 per cent of the CEOs on the year 2000's ROB 1000 list were CAs. Notable names include Barbara Stymiest, of the TSE, Guy Charron of Les Boutiques San Francisco and Rémi Marcoux of GTC Transcontinental.
And they seem to be doing a pretty good job; those companies listing a CA as their "top officer," have above average profits, shareholder's equity and total assets. They also out-perform in terms of one- and five-year return on capital.
But those figures understate the number of CEOs who began their careers as accountants. They don't include those with other designations such as CGAs and CMAs. Nor do they include accountants who run small and medium sized business like Pahud does.
Not that he ever expected it. Pahud was one of the top accounting prospects in Quebec when he began in the trade. He finished fourth in his graduating class at McGill among those writing the CA profession's rigorous four-day uniform final examination (UFE). As a result he had offers from several firms, including KPMG - one of the "big five" -- where he did his apprenticeship.
Pahud rose quickly through the ranks, rising to audit manager. But like many CAs, he was constantly courted by clients. Eventually he joined Mid-City Carbon and Ribbon, and when its Kerr Norton division was spun off, Pahud signed on as general manager. Two years later he was named president.
"I loved the challenges of working as a CA. But the responsibilities of a CEO are so much broader." said Pahud. "We have 60 employees here, a manufacturing facility in St-Eugène, and 16 salesmen throughout Quebec and Ontario. And although we work as a team, ultimately the CEO is the one who is seen as responsible for a company's success or failure. "
"But my accounting training brings me so many advantages," said Pahud. "I don't know where to start. Just in terms of financial and legal literacy the benefits are enormous."
"For example, when we bid on big government and industry contracts, we have to submit complex proposals. As a CA, I evaluated these sorts of documents, all the time, so I am used to working with them."
According to Pahud, this knowledge brings Kerr Norton a big competitive advantage. The office products business is so competitive, and bid documents so complex, that many of those involved in the process ignore the legalese and just look at the prices on the back page.
But because various delivery, penalty and performance clauses in those large contracts are so complex, many people - sometimes even his own employees - have the tendency to put in big price "cushions," in case something goes wrong. Pahud's job is to evaluate bid clauses, and assess the risks and costs, so Kerr Norton's pricing structure keeps these cushions to a minimum.
It seems to be working. Kerr Norton's sales have almost tripled
to $12 million during the nine years that Pahud began running
the company. That includes a 15.0 percent jump last year, and
Kerr Norton is on track for a similar increase in 2002.
"Business has gotten increasingly complex in recent years," said Pahud. "Taxation, regulatory issues, and information technology, are taking up more and more executive time, and as accountants we have training in all of these areas."
Marc-André Varin, a spokesperson for the Ordre des Comptables Agréés du Québec agrees. "Financial control is a core competency for any senior officer, and that's why CAs are in greater demand in industry," said Varin. "In the last few years, we've expanded training for our members to focus more outside of pure financial knowledge into areas such as information technology and soft management skills."
Ironically, among his former classmates that he still stays in touch with, Pahud is the only one who went on to run a company. "Many of them are still in private practice," said Pahud. "But I get don't get too many calls asking if I need a good accountant," he jokes.
Photo caption: According to Ed Pahud, a CA, who became president of Kerr Norton Inc., good accounting skills are an invaluable asset to a CEO.
Highlight this quote: "Business has gotten increasingly complex in recent years," said Pahud. "Taxation, regulatory issues, and information technology, are taking up more and more executive time, and as accountants we have training in all of these areas."
|© 2002 Peter Diekmeyer Communications Inc.|