Ahead of his attendance at this week’s New Metrics ’17 conference in Philadelphia, we caught up with Bob Mancini, CEO of the Rhode Island Society of CPAs (RISCPA), to learn more about why the concept of sustainability is finally being recognized in the finance world, and what this means for the future of the industry.
First tell us about the Rhode Island Society of CPAs — how is it structured, and are all the state societies structured in the same way? What is the main objective and mission of the society?
Bob Mancini: RISCPA began operations in 1905. Today, the Society enjoys a total membership of 2,300. Currently, our accounting members are broken down into the following categories: 60 percent public, 40 percent industry. We also have student members, as they are the seeds of the profession, if you will. And two years ago, we introduced the professional affiliate member (PAM). These individuals are primarily comprised of professionals from the financial services, legal and corporate sectors and serve to complement the strong emphasis we place on driving business development. Typically, most societies operate in similar fashion. However, we’re one of the few that has delved into offering a PAM program. Moreover, a lot has to do with size; that is, the smaller the society, the more it’s necessary to strategically diversify revenue. Our mission is simple and most certainly fits within the confines of the best of elevator speeches: We educate, advocate and lead.
Today’s businesses are having to rethink the way they are operating to remain competitive in the changing business landscape, and CPA firms are no different. What changes, shifts and challenges do you see facing the accounting profession?
BM: Right now, the profession is looking for new ways to bring additional value to clients, differentiate themselves from their competition and attract and retain top talent. Interestingly, while more students are gravitating toward accounting as a major, there’s been a decline in those actually sitting for the exam to capture the pedigree. Some of the larger firm environments, given their emphasis on the consultative side due to its having amplified profitable opportunities, have been actively recruiting both accounting and non-accounting majors in Marketing, Economics and data analytics (important when considering Millennial talent acquisition). It should also be noted that technology is taking away more from traditional taxation and attestation, thus it makes sense that larger firms are moving down the path they’ve been headed. Recently, one of the big four announced it’s establishing a law subsidiary as a means of strategically complementing its business model. For the smaller firms, technology has opened the door to expand through virtual operational connectivity and by collaborative alignments, thus creating more competitive opportunities.
The other issue affecting many in the profession is getting a handle on succession planning. It seems while many of the smaller to mid-sized firms speak of its importance, from this writer’s perspective, many haven’t been able to successfully execute a viable plan of action for funding mechanisms for exit strategies.
What was the impetus for bringing the discipline of sustainability into the society?
From TCFD, to shareholder activism, to transparency gaps ...
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BM: Four years ago, an energetic professional named Joy Pettirossi-Poland literally knocked on my door and introduced what she articulated as the new wave of the financial/accounting future: sustainability. Joy was the driving force by creating the MVP (More Value & Profit) pilot through its initiation from the first sustainable CPE event on succession planning, with noted author and impact investing expert and HIP Investor CEO Paul Herman, which was ultimately presented at the Sustainable Brands New Metrics 2013 conference. Joy was instrumental in bringing together global thought leaders to participate in the pilot, such as Lindsay Stoda of Interface; CSRHub; EKOS International; and Bob Willard, creator of the Sustainability ROI Workbook. Fast-forwarding from a task force in its infancy to a full-fledged committee (believed to be the first amongst the state societies) as co-chaired by Joy and RISCPA Board member and Associate Professor of Accounting at Providence College, Michael Kraten, PhD, CPA, CGMA; the RISCPA Sustainable Value Committee was operating at full steam – so much so that CIMA did review some of the work of the committee around quantifying human capital and prototypes for the integration of non-financial data onto financial statements. The committee launched its sustainable value certificate program and proudly issued its first round of certificates at the RISCPA Annual Meeting in April 2017 to the 15 participating committee members. Joy was also named the first non-CPA recipient of the Society’s Mission award at that meeting.
What do you see as the biggest opportunity for CPAs around sustainability?
BM: Opportunities surrounding sustainability tie in to areas of newfound ways for CPAs to create value for their respective clients and business development opportunities for their firms. Case in point, in the public accounting arena, if a CPA is representing a private client selling a product to a public entity, then the company producing the product must adhere to the audit and disclosure standards and requests surrounding supply chain sustainability or risk the loss of position in the supply chain. Then, there is 401(k) emphasis, as many CPA firms also perform these audits. And there is sustainability and ESG screening relative to investments for those CPA firms operating wealth management practices. Industry-wise, supply chain management, of course, is key. All of these areas represent opportunities for business development and revenue generation for CPA firms, as well as a way to attract and engage Millennial talent – another challenge for CPA firms and businesses alike.
Why do you think Sustainable Brands’ New Metrics conference is an important event for CPAs to attend?
BM: I attended the New Metrics conference last year in Boston and was extremely impressed with the level of thought leadership and innovation around metrics, reporting and non-financial data assurance work. Two examples: The work being done by the Natural Capital Coalition and the Human Value Institute directly relates to the work that was being done by our Sustainable Value Committee and was demonstrated to link to increased performance for business which intuitively would translate into opportunities for increased company valuations – something very relevant to the CPA profession’s expertise. RISCPA underwrote the CPE for last year’s [New Metrics] conference; we examined their content quite closely and found most of the content to be highly relevant and cutting edge to the CPA profession – to my knowledge, Sustainable Brands is the only venue aligned so closely with the accounting profession. It offers exceptional opportunity for high-caliber learning, which is a priority for our society.
What advice would you give CPAs that are considering getting involved with sustainability?
BM: One of the quotes I often use when speaking to my members: “Change is imminent, but growth is optional” – if we can’t help be part of that mix, then we are not going to be able to help connect those peripheral dots … and that is unsustainable for us and for the profession.