Last week, I went to listen to Jim Turley, the CEO and chairman of Ernst & Young (E&Y), speak as a part of the Undergraduate Business Council’s VIP Distinguished Speaker Series.
Lehman Brothers
It was the first Monday back from spring break…that is, the Monday after the media went crazy with malpractice allegations over Ernst & Young’s involvement with the Lehman Brothers case. I went in thinking Mr. Turley might not bother discussing the touchy subject with a bunch of students, but he got right to the point. He spoke in detail about what the allegations were, reminded us that there is a desire to direct anger about corporate greed toward someone, and finally said that he is confident that E&Y took all the right steps regarding the Lehman Brothers audit.
After about 20 minutes, he moved on to what he actually came to speak about: his perception of the business world today. He discussed the importance of approaching business from a worldview perspective. As a resident of both New York and London (the locations of the U.S. and global headquarters, respectively), and as well as a co-chair for the Russia Foreign Investment Advisory Council, he certainly brings a global perspective to the firm. He discussed the impending convergence to IFRS as well as where he believes the U.S. stands in relation to other countries around the world. He feels strongly about the need for common standards across the board, rhetorically asking, “What if every country brought a different set of soccer rules to the World Cup?
Where the U.S. stands
When discussing the current economic climate in the U.S., Mr. Turley gave an interesting analogy (or “warning,” depending on how your interpret it). When analyzing the ups and downs of different countries’ economies, he says they are either in the shape of a “V,” a “U,” or an “L.” The V countries are those that are rapidly emerging such as China, India and Brazil. The United States has typically been a U country. When we hit a low point, our free markets and our legislators have typically been able to bring us back to a high point after a reasonable amount of time. However, he warned that we might start looking like an L country, which is commonly seen in Europe. A country’s economy becomes an L when there aren’t enough market incentives to bring the economy back up. In short, he implied that increased regulations could make us more susceptible to becoming an L country. Obviously this analogy has some political undertones, but it is interesting nonetheless.
Entrepreneurship
Mr. Turley also discussed E&Y’s commitment to supporting entrepreneurship and his belief that entrepreneurship and innovation are keys to economic recovery. In keeping with the previous point, he mentioned how the government can help by supporting public policy that stimulates economic growth and therefore helps entrepreneurs. Because innovative companies substantially outperform their peers by finding new ways to grow, it is important to support creative, innovative thinking across organizations in all sectors. Only then, he says, can we as a country pull ourselves out of the present financial crisis.