Peter Griffith was recently named vice chairman of the Pacific Southwest area for Ernst & Young, the global accounting firm with 140,000 employees. Griffith recently served as global treasurer of the $17 billion firm and also spent several years as president and chief executive of Ernst & Young Corporate Finance LLC, which offered a broad range of advisory services for mid-sized merger and acquisition transactions. He received a taste of finance and investments during an eight-year stint at Wedbush Morgan Securities. His book, “The Guide to the IPO Value Journey,” was published in 1999. Griffith will have to shift gears in his new role. He’ll be responsible for hiring and firing and will have a hand in the firm’s Entrepreneur of the Year awards. He’s looking forward to a break from traveling, though he recently took his 9-year-old son on a salmon fishing trip earlier this month to Alaska with a group of friends.
Question: What qualities do you have that made you the best pick to head E & Y; on the West Coast?
Answer:
I’ve spent 25 years in accounting, auditing and finance and what E & Y; has done is provide a culture for me to thrive. I’m extremely mindful, respectful and passionate about the firms’ values, about people and about quality. I think it was my love of the firm and the history of the profession. Having been at Wedbush Morgan Securities for eight years and being on the capital market side, I have a unique view of the accounting profession. We’re trying to develop an extremely inclusive environment where we have professional and personal development, so everybody becomes a leader.
Q: Is this a radical or a gradual change?
A:
I wouldn’t say it was a radical change, but it’s a big change. I was really into finance and the complex financial issues, and now I’m back into a P & L; (profit and loss) situation, which I really enjoy. I’ve spent the first six weeks in the job getting to know the people in the Pacific Southwest area. I took a vacation five weeks into the job and I didn’t have to worry about it. If I’m not balanced personally, I’m not going to be a great executive. It’s family first. We all make mistakes at work, but I don’t want to make them at home.
Q: What have been the toughest choices you’ve made professionally?
A:
Working with people offers the greatest challenges, but also the greatest returns. Some of the toughest positions mean it’s important to be honest and candid. Sometimes having difficult conversations can be a little bit uncomfortable but I believe it’s important, because I want people to have difficult conversations with me. Those are always difficult, but I think they’re exceptionally important. Another difficult decision for me is how to manage time. I try to spend a little bit of every Sunday evening looking at my schedule for the coming week and making sure it conforms with what I want to accomplish on a long-term basis. I also ask myself if I’ve built some time in to exercise, or make sure I go to a violin recital for one of my kids.
Q: What have you learned about managing large groups of people and how do you do it?
A:
Large groups of people bring a lot of energy, diverse skills, and ideas to the table. My job is to try to help those ideas surface by leveraging the diversity of thought and working with people to take advantage of their creative input. I want our employees to achieve their goals and objectives. I really enjoy helping my colleagues become more successful and helping them achieve their own definition of success, both personally and professionally. The environment at Ernst & Young allows me to leverage the “build consensus” method of leading and managing. I also believe in mutual accountability. I’ve learned the importance of really listening, so I can be as responsive as possible in my leadership and management.
Q: How did your experience at Wedbush Morgan help you become a better accountant?
A:
Wedbush helped me view the capital markets from another perspective, and I believe the added perspective has given me a clearer view of the importance of the accounting profession to the capital markets. I was a user of financial information and appreciate both the extent, and the limits, of what the accounting profession can provide.
Q: How difficult was it to return to E & Y; after Wedbush?
A:
When I returned to Ernst & Young, it came at a time in life when I realized I wanted to spend the rest of my career with a global organization that could provide a wealth of experiences and development opportunities. I actually did stay in finance at Ernst & Young (most recently serving as the Global Treasurer of the $17 billion-in-revenue organization.) I am a student of both the capital markets and of finance. I hope that I never lose my enthusiasm for them or for the many changes in them that are sure to come.
In my mind, finance and accounting are closely related. A great finance professional needs extensive accounting knowledge and a great accounting professional needs extensive finance knowledge.
Q: Obviously, the accounting profession was in disarray after the downfall of Arthur Andersen. What do you think the Big Four know now, that the Big Six didn’t back then?
A:
The entire profession has faced some very tough years and we all took our share of hits. But we have emerged stronger and better from the experience. Today, we have a renewed sense of purpose. We know the importance of listening and engaging on a regular basis with a wider range of stakeholders companies, boards, policymakers, opinion leaders and investors. As auditors, we’ve also learned to collectively work with the entire business community to enhance investor confidence. And we know that absolutely no client is worth compromising the integrity of our organization.
Q: How important do you think the probe into stock options is, now that it has expanded to include outside accounting firms?
A:
The backdating of stock options raises a serious question that must be examined fully in order to address the concerns of investors and enhance public confidence in our capital markets. Clearly that’s something that is of paramount interest to our profession. But it is still early in the process and many more facts need to be gathered. We’re committed to playing our part in that process.
Q: E & Y; recently launched a global fraud investigation and dispute practice. What does this say about the changes in corporate America?
A:
We did recently reorganize our services in this area on a global basis, but Ernst & Young has offered fraud investigation, dispute services and forensic legal technology support for a number of years. We have more than 5,000 professionals providing these types of services to our clients around the world. We’re living in a global economy and whether you’re doing business in America or an emerging market, investors expect to find transparency and appropriate control processes to help to minimize risk. I think the past few years have taught us what can happen when a company’s controls are weak and management does not take the steps necessary to identify risk and establish anti-fraud programs. We’re seeing a commitment among business leaders to change that, and we’re ready to help.
Q: Do you have a management philosophy?
A:
I picked the people and groups I’ve worked with and I think it’s endemic at Ernst & Young. Over the 25 years I’ve been in and around the profession. I try to work with people who are smarter and wiser than me so I can learn from them. My wife and I are very close, my wife is a CPA, and we talk a lot about the demands of the job. You have to have a partner and friends who understand.
Q: What are the biggest challenges facing E & Y;?
A:
Creating a world-class inclusive workforce and group of team members. The growth we’re going to feel globally and that we’re experiencing requires our senior level attention to recruiting the very best and brightest. It’s the biggest challenge not only for our firm but also our profession.
Q: How do you do that?
A:
One of the very best CEOs I’ve ever worked with was in a small company, and they had a product that went into commercial jetliners. Everyone asked him that question. He always had a straightforward answer: We just need to do everything a little bit better than the competition. We need to have everybody involved with recruiting. I think we’ve done that pretty well. I don’t think there’s a secret it’s operational excellence and great execution.
