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The woman who transformed accountancy in government

Dame Mary Keegan, the former managing director for Government Financial Management, HMG Treasury department finance director and head of the Government Finance Profession, has received the ‘Award for Outstanding Achievement’ from the Institute of Chartered Accountants in England and Wales. PSE spoke to her.

Dame Mary Keegan was the first female audit partner at what was then Price Waterhouse in 1985, having trained with the company in London and working for it in Paris and Chicago since 1977.

She went on to have a huge role in the introduction of international professional standards into accountancy in the 1990s – experience which was called upon during her illustrious Whitehall career from 2004-2008.

On 4 March, she was given the accountancy profession’s most prestigious award – the ‘Award for Outstanding Achievement’ from the Institute of Chartered Accountants in England and Wales (ICAEW).

PSE talked to her after the dinner and ceremony. She said: “It was lovely, a very enjoyable event. I’m mostly retired now, so being able to see a lot of people with whom I’d worked over the years was very pleasant. And I was delighted with the award.”

Pushing for professional standards

Dame Mary was made director of professional standards for Europe at Price Waterhouse in 1994. She said: “I looked round Europe and talked to people about professional standards around Europe, and realised that actually, it was a bit of an oxymoron – there was no such thing as professional standards in Europe. The firm had its own ‘rule book’ and principles, but in the profession as a whole, there was no such thing as standards for Europe. Every country had developed their own.

“We argued that we needed better international standards that were properly applied. It became a bigger and bigger push over many years, and I have to say, in the 1990s it seemed unlikely that we were going to have any effect – but looking back now, it all seems so obvious!

“The hurdles were more to do with culture than anything technical. In any profession, in any country, if you’ve grown up with a set of standards then those are what you’ve used and what you’ve learned – the older generation, certainly, don’t particularly want to change. So there was that cultural issue to overcome.”

Overcoming scepticism

Dame Mary continued: “There was also some of what you could almost call geopolitics: Brussels was trying to deal with regulation generally across the marketplaces of Europe, and some of the civil servants in Brussels thought it would be wonderful to have European standards. Those of us who’d already seen beyond Europe were quite concerned that we shouldn’t be left with a set of purely European standards for accounting, auditing, ethics and all those things that apply to the profession. That was a bit of a fight. The Americans, who already had pretty good standards, were saying ‘why don’t you just take ours?’

“In the UK, we had good auditing and accounting standards. Sir David Tweedie was heading up the Accounting Standards Board (ASB) in those days and developing new standards fast in the UK. There was scepticism here too that we needed to be troubling ourselves with this international outlook.

“It seemed frustrating at the time, but these sorts of changes take a while to gather momentum. By the end of the 1990s the idea had caught hold.”

Big multi-national corporations, especially those based in Russia and China, were especially keen on common standards,
she said.

“There are still countries where the change is taking place. Personally, I hope we’ve moved too far ever to go back. That’s the important thing. There’s a lot more to be done, there always is, but so long as we’ve tipped the scales so that we can’t go back, then we’ve achieved quite a lot. It wasn’t just me – it was a team effort – though I’m very flattered to be singled out.”

Committed to change

Working with the European Commission on standards was her “first introduction to the politics of regulation”, she said, and her work on standards also brought her into contact with influential people in the UK government at the DTI (now BIS) and the Treasury.

She was invited to succeed Tweedie at the ASB in 2001. “This was at a moment where, as the UK, we’d already committed to the change to the international [standards] within five years. They wanted someone at the ASB who was equally committed to the move and wasn’t about to try to change course.”

It was clear, in the early 2000s, that something had to be done about the state of financial management across Whitehall. Dame Mary was seen as the person to manage that change, and in 2004 she joined the Treasury as managing director for Government
Financial Management, as department finance director and as head of the Government Finance Profession.

She explained: “I was invited to do a change management role in Whitehall, based on my previous convictions in trying to change standards across the world. Though that sounds a bit immodest!” she joked.

She praised her predecessor, Sir Andrew Likierman (now the National Audit Office chairman). She said: “He had been the head of the Government Accountancy Service before me and he had done a fantastic job – he’d introduced basic accounting in Whitehall, from what had been just cash accounting. He really had done the heavy lifting, as far as I’m concerned.

“But, at that point, in government, there were still departments that were struggling to produce their annual accounts on a timely basis, let alone producing management accounts along the way. My predominant role and achievement, though as part of a
team effort, was getting the processes embedded properly into government departments that enabled people to produce regular management accounts.

“The fact they were doing that showed in their ability at the year-end to produce their annual accounts a great deal faster. In the private sector, you’re always producing management accounting data, so the year-end doesn’t become a huge effort. We moved, on the whole, towards doing that.

“By the time I left Whitehall in 2008, almost all government departments were producing audited accounts by the recess. Alongside that, we were encouraging the whole concept of using ‘number’ – using management data in the decision-making process. I’m immodest enough to say that in that period we did move forward – but we’ve still got a long way to go.”

‘A profound impact’

Peter Wyman, chairman of the judging panel for the Outstanding Achievement Award, put it clearly in his assessment of her contribution: “She made accountancy matter in government.”

He added: “Dame Mary has had a profound impact on the accounting profession with her huge intellect and a deep understanding of the global financial system.

“I commend and admire her commitment to moving accounting and capital markets forward through building better professional standards and international institutions. She mentored hundreds of professionals at PwC, and at Treasury, who are a lasting
legacy to her great accomplishments.”

Spreading skills

The drive for better policy-making through management data was strengthened through the Civil Service Professional Skills for Government (PSG) agenda, which Dame Mary also spearheaded.

She said: “For a lot of people who’d come up through policy routes in Whithall, it gave an introduction to number and the idea of decision-making with number that they hadn’t necessarily had before. It was very gratifying to see how enthusiastic people were about having better management data.”

PSG was replaced by the Civil Service Competency Framework across government from April 2013.

Asked about better policy-making through the use of management data today, Dame Mary said: “It’s difficult to know where exactly
the pressure now needs to fall. From the outside, I’d say the most important thing is to encourage everyone else to want management data, which will encourage the finance teams to produce the data – which I know they can do and that they do have. But we need the decision-making processes to be more based on ‘number’.

“If one works in the private sector, as I had until then all my life, all of industry and commerce is on the whole based on measuring things. It doesn’t always have to be accounting data – it can be performance data, sustainability data – but every policy decision in the private sector is rooted in data. ‘How’s this going to change things? Let’s set up some parameters, we’ll get the data now, so that we can measure as we go how successful we’ve been’.

“I don’t think those ideas have been quite so current in the public sector, but it is coming, and life is changing – which is encouraging.”

Biography

Dame Mary was born in 1953 and educated at Brentwood County High School and Somerville College, Oxford. She was with Price Waterhouse (later PwC) from 1977 until 2001, occupying a number of senior roles during that time. She was a founder member of the International Financial Reporting Standards (IFRS) Interpretations Committee and of the European Financial Reporting Advisory Group Board.

In 1997 she was appointed the UK member of both the council and the executive of FEE (Fédération des Experts Comptables Européens) and she was also a founding member of the International Forum on Accountancy Development. She was also a member of the UK’s Urgent Issues Task Force.

She chaired the UK’s Accounting Standards Board from 2001 until her move to Whitehall in 2004.

In 2007 she was awarded Dame Commander of the Order of the British Empire in recognition of her hugely significant and lasting contribution to both HM Treasury itself and to the wider government agenda in financial management, government accounting and public spending.

She has been a keen rower, sailor, gardener and musician, and has since 2008 been involved in a non-executive capacity in the National Audit Office, the Royal Horticultural Society, Falmouth University and the Business School at Exeter University.  She is also an Honorary Fellow of Somerville College, Oxford.