Chris Laughton

Is it a coincidence that the incoming UK heads of PricewaterhouseCoopers and BDO are from a restructuring background in the current economic climate?

Ian Powell takes the helm at PwC on 1 July having come through the ranks of the firm’s corporate restructuring practice over the 20 years to 2006, to become head of advisory. Simon Michaels will lead BDO from October, similarly after 20 years in the firm’s business restructuring stream, which he has headed since 2004.

Prime qualities for the roles are leadership and people management skills. Knowing both men fairly well, I can see how they fit.

It’s no surprise to me that insolvency practitioners should take leadership positions, especially those bent towards restructuring rather than straight liquidation.

Good restructuring professionals will inevitably develop good people management skills and the best will have been comfortable exercising such talent over many years.
Michaels’ views are less public, but one has to assume that he won the ballot on the strength of his partners’ judgement of his leadership qualities rather than on pure politics.

I believe it is unremarkable that having come through the recessions of the 1980s and 1990s, when good people were attracted to corporate restructuring, those who moved on to divisional management roles and developed their leadership skills are now positioned for the top jobs.

Commerciality and numeracy is expected of IPs, but communication abilities and people skills have become ever more important. These recent promotions underline the skillsets of the restructuring profession and the opportunities in store for those whose careers begin by attending creditors’ meetings or dealing with retention of title claims.

But is there really no coincidence here? I think that’s the case. PwC’s and BDO’s partners may know something about their firms that I don’t, but I very much doubt that their new leaders’ insolvency technical skills will be put to much use.

Even if the credit crunch turns out to have more severe and long-lasting effects than most IPs hope, both firms have strong counter-cyclical restructuring departments.

Fortunately for the rest of us, they have an increasing number of conflicts of interest and, therefore, insolvency matters they are unable to deal with.

Chris Laughton is a business recovery partner of Mercer & Hole