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April 30, 2008

KPMG Australia leader upbeat

Geoff Wilson cut his teeth in the US and Asia and in the audit practice before being appointed chief executive of KPMG Australia. He speaks to Catherine Woods about the importance for partners to have diversity in their career and the changing face of Asia-Pacific.

KPMG Australia chief executive Geoff Wilson describes himself as an optimist – although anyone in his position would be hard-pressed to be too pessimistic. Wilson is in charge of the second-largest firm in Australia (and one that’s bearing down on the A$1 billion-revenue mark) in an economy that has so far avoided the downturn that is squeezing the US and Europe.

Wilson tells the International Accounting Bulletin: “The phrase I would use when talking about the Australian economy is ‘cautious optimism’. There is subprime and we are looking at the likely impact of that but if you examine Australia during the past dozen years, the economy has performed particularly well and has not had the spikes and dips others have had, and are having. I think that is a good foundation for our future.”

What does concern Wilson is some of the revisions to company earnings that are being made by organisations being battered by exchange rates and subprime exposure.

“When we’re talking to clients, there’s still a lot of discussion around deals,” he adds. “Private equity may have gone off the radar but the trade buyers are there. We are optimistic but clearly keeping an eye on what is happening globally and regionally.”

Good shape

Fortunately for Wilson, he inherited a firm in pretty good shape when he took over as chief executive from Lindsay Maxsted at the start of the year. The most-recent year’s revenue stands at A$906 million ($853 million), tantalisingly close to the A$1 billion mark, and growth is tracking at 14 percent.

Wilson hastens to talk about the opportunities facing the firm when asked about the challenges in the market.

“The Australian economy has been particularly buoyant over the last four or five years and the wide range of regulatory response and change that has occurred has really provided some great opportunities for us,” he says.

“On top of that, Australia has been very buoyant in the M&A market, so there has been a lot of transaction activity and that’s contributed to what has been a very busy and successful period. The first challenge is to continue that success and to seek out where the new opportunities for growth are for us. At the end of the day, we have great people and we need to have great people to have great clients.”

Wilson joined KPMG in 1979 and has been a partner since 1990. Before becoming chief executive, he was head of audit and risk advisory services, thereby joining a long list of audit heads that have made it to the top job of a firm.

While he argues that KPMG has a history of drawing on people from disciplines other than audit for chief executive, Wilson admits an audit background does provide much-needed breadth of experience.

“It enables you to get into the boardroom and have a dialogue with senior executives across a broad range of topics, not just about a particular regulation or a service; you are talking about the whole business,” he says.

In addition to working in Australia, Wilson also spent a few years on secondment in Silicon Valley, California. He says the time was “life-changing for me, and my family, both personally and professionally”.

Wilson believes the experience will help him adapt to his new role. He is also hoping to persuade more Australian partners to do stints overseas at other KPMG firms.

“I have at least 15 of our partners in overseas locations,” Wilson says. “I would like to ramp that up to maybe somewhere between 15 and 20 partners working internationally at any point in time. They would be away for two or three years and when they return, someone replaces them.”

In addition to working in the US, Wilson has also spent a number of years working closely with member firms in the region. Within his capacity as KPMG Australia head of audit, he was chief operating officer of the Asia-Pacific audit and advisory practice.

Wilson says it was a formative experience: “It opened my mind to things that I just had not seen and been aware of. It enabled me to build friendships and relationships that continue today.”

Important region

Asia-Pacific (and Asia as a whole) are crucially important to KPMG’s development and also that of the Australian economy.

“China is a fascinating case study,” Wilson comments. “Both in terms of its growth and the way in which they are looking to build that economy and change the social fabric of the country. But you can really see that they are also looking to change the way the world economy looks and challenge the existing ways.”

Wilson singles out Vietnam as an economy to watch: “It has a population of 80 million people who are relatively young and highly educated. Venture capitalists are working in the country, private equity is in there; we will be talking about Vietnam in a very different way in ten years’ time than we are today.”

The leaders of the major KPMG International member firms in Asia meet each quarter for a strategy meeting and while Wilson says there are no immediate plans to follow KPMG Europe’s lead and chase a legal merger between the country members, he does not rule it out.

Wilson says: “Each of the country practices co-operate and work together very closely. Having said that, it is worth exploring to the extent to which certain countries can share resources or infrastructure and get some efficiency gains. We need to ask: can the same service be done in a more efficient manner?”

KPMG Australia may be in good shape but there is much for Wilson, ever the optimist, to do as he takes the firm to the next stage of its development.

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