Douglas Flint and his influence over the regulators

A politically engaged FD and one involved in shaping regulations and standard-setting is an FD with clout well beyond the finance function, as HSBC’s Douglas Flint knows.

In the past couple of years there has been a lot of talk about how finance directors can extend their reach beyond finance leadership and get the whole business to dance to their tune. Flint’s comments in a recent interview with Financial Director’s sister publication Accountancy Age were a good example of this.

The recipient of Accountancy Age’s gong for outstanding industry achievement award in 2009, Flint was chosen by the judges not only because HSBC has largely avoided the effect of the subprime crisis – and even seemed to escape any immediate pain from its exposure to the United Arab Emirates when Dubai’s principal investment vehicle, Dubai World, announced it was at risk of default – but because of his work with organisations such as the Accounting Standards Board and the International Accounting Standards Board.

Plugged in
This extra-curricular engagement with the standard-setters and regulators of the auditing, accounting and financial services industries serves a clear purpose for HSBC and as a member of The Hundred Group of Finance Directors, Flint will be well plugged into the group’s lobbying efforts behind the scenes on everything from IFRS, pensions mortality assumptions, audit choice and taxation. This approach is something all FDs should mull if they’re thinking about their sphere of influence and the impact movement in these areas has on their duties.

Flint has certainly made the effort to get HSBC a seat at tables around which decisions affecting the way it does business and accounts are made. He was chairman of the Financial Reporting Council’s review of the Turnbull Guidance on Internal Control between 2004-05 and has served on the Accounting Standards Board. Between 2001-2004 he sat on the advisory council of the International Accounting Standards Board.

He also served on the Working Group on Public Disclosure, an initiative composed of the heads of major banks established at the turn of the millennium by the US Federal Reserve’s board of governors and chaired by former Chase Manhattan chairman Walter Shipley, which lobbied the head of agencies such as the Securities & Exchange Commission on issues including how to report risk exposure.

Finally, he co-chaired a high-level report on the role of accounting systems and policy in management, Enhancing Public Confidence in Financial Reporting, from the Group of Thirty (a body of international finance heads and academics that boasts Nobel Prize-winning economist Paul Krugman, European central Bank president Jean-Claude Trichet and former US Federal Reserve chairman Paul Volker as members).