At a time when western economies are weighed down by worries and positive signs are scarce, international investors have been seeking more opportunities in Asia and new emerging markets. Riding that wave — if not ahead of it — is Michael J. Andrew, who in 2011 became chairman of KPMG International. Working out of Hong Kong, he is the only head of a “Big Four” accounting firm to be based in Asia Pacific.
“We are the first of the Big Four (KPMG, PwC, Deloitte, Ernst & Young) to decide to move our head office from New York to Asia. This is considered a big challenge but I think it’s important that we move to where the growth and future opportunities are,” Mr Andrew told Asia Focus in an exclusive interview on the sidelines of the World Economic Forum on East Asia earlier this month in Nay Pyi Taw.
Raised and educated in Melbourne, the home of the Australian Open, Mr Andrew had a childhood passion for sports, particularly tennis. He was one of the best players of his age, claiming many trophies in various competitions. “I was very good at tennis, but then there was a time that I had to decide whether I wanted to be a professional athlete or pursue an academic college degree,” he recalls. “With good advice from my mentors, I chose my path and today I’m happy with those decisions I’ve made.”
Starting his career as a lawyer, Mr Andrew then ventured into tax and advisory services and joined KPMG in 1984. A partner since 1988, he later served as chairman of KPMG Asia-Pacific and chairman of KPMG Australia until 2011. Prior to that he held top-level roles in KPMG Australia including deputy chairman and managing partner of KPMG Melbourne. The assignments brought with them a lot of experience dealing with clients from Asia and he was always interested in learning how business was done in this region.
“I studied commerce and law that’s why I decided to take on tax,” he said. “Working in this industry allows me to utilise both of my technical skills. I like to work in the emerging markets; it’s always interesting to see new changes.
“When I walk into the office, I don’t know what I will be doing today. The phone will ring — there might be a big takeover or anything — that’s what I call excitement.”
Mr Andrew believes cultural and cross-cultural understanding is his chief strength. He is keen to learn about new cultures and the way people from different backgrounds think. Working in big multinational company there is a lot to confront. One needs to understand what short of “personality” each country has, and to remember not to embarrass anyone in any situation, he noted.
“My engagement with Asia started since I worked in Australia. I had to deal with Japanese clients. I have learned a lot about how Asians do business. It’s different from what the Europeans or Americans think. For example, you will not hear many Asians speaking during a meeting, but they will come and talk to you after the meeting ends.”
To lead a global network of professional firms that has operations in 156 countries and employs as many as 152,000 people is never an easy task for anyone. For Mr Andrew the arrival of the opportunity allows him to make use of all the experiences that he has accumulated throughout his career. The international exposure and all the skills he has developed over the years have accumulated into a formidable package of skills. He sets high standards for himself and others as a result.
“I would say I’m a tough but fair boss,” he says. “I like to push people and train them to be able to work at their best.”
The KPMG chief’s engagement with the wider business community is extensive as well. He speaks regularly around the world on key issues related to economic growth, business development and corporate governance. He is a member of the International Business Council of the World Economic Forum and also sits on the steering committee of the United Nations Global Compact for the Environment.
As the first head of a major global accounting network to be based in the eastern hemisphere, the 57-year-old Australian chairman likes to reflect on the differences he has found between the East and the West and how they can learn from each others.
“When it comes to business, the East focuses more on the long-term view, while the West is looking for quicker response,” he says.
“I think the West should learn to be more patient and undertake longer-term restructuring to drive growth from the East, whereas the East should learn how to make policies more open and transparent like the West.”
Mr Andrew sees a very positive outlook for Southeast Asia, particularly the coming integration of the Asean Economic Community (AEC) in 2015. However, stronger collaboration and coordination among the members will remain the keys to success.
“I think Asean needs to understand that as individual countries alone they will not be able to compete against China or India. But if all of them stay together as one economy and develop what each is best at, it will create a big potential market,” he explained.
“You may have Singapore as a financial services centre, Thailand as the logistics and transport hub linking the region together, cheap labour in Myanmar and Cambodia, while you have the Philippines for outsourcing services. These are the things that Asean needs to do.”