John Bonello: A hard act to follow

John Bonello's announcement this week that he is to step down as PricewaterhouseCoopers Malta senior partner at the end of the month will no doubt leave a void in the accountancy profession.

Mr Bonello has spent the whole of his career with the firm where he has been a partner for 33 years. He has, at one time or another, filled every important role in the firm, from its technical development, to handling most of the firm's larger clients, to the development of its partners and people and to being the firm's mainstay in its relationships with the PwC global network.

The outgoing senior partner is not only extremely well-known in the PricewaterhouseCoopers global network but is actually the longest serving partner in PwC worldwide.

How did it feel now that he was about to retire?

"Strange! There's obviously a whole mixture of feelings given that I have been with the firm for 37 years - but these feelings are tempered by the belief that I am doing the right thing. A firm like ours has to have a being that is separate to that of its partners and I feel strongly that it is right to limit the age of its partners, in our case it's 61, and I don't believe it should be more than that.

"This provides space for the generations that follow and keeps the firm fresh and, above all, it emphasises the fact that it is more about the firm than the person. Keeping the firm fresh and energised is the only way of guaranteeing that you attract and retain the best people and that you continually improve the service levels to the firm's clients - the most important components in the equation. It is not a model I invented but it is one I firmly believe is the right one. So at the end of the day it's not too bad knowing I'm doing the right thing. But I shall miss it," he said.

Looking back he says the accountancy profession has changed in 37 years "from still being in a state of infancy in the early 1970s to a state of maturity today with a status and relevance equal to any of the other professions".

He says: "Today the accounting profession plays a critical role in the functioning of our economy. Its 'attest' or audit opinions, whether on financial statements or on a range of due diligence exercises are fundamental to the growing capital market and to many of the large business deals that take place.

"Financial advice from accountants is today sought on all large projects - even at a national level. The profession's role and its track record in attracting foreign direct investment is also pivotal - no question about that."

Mr Bonello says that the profession possesses the main concentration of tax advisory expertise which is always fundamental to attracting FDI and this is no more evident than in the recent development of the financial services sector.

"The accounting profession has been, in my view at least, the leading force - even if not the only one - in the establishment and development of Malta as a serious financial centre and in attracting many of the big names here. We have a very active and serious Institute which is extremely organised and active and has, among other things, very strong learning and education capabilities, a University course that is very much in demand and around 1,500 practicing accountants.

"The accounting profession in Malta has an effective regulator and we are the most strongly externally regulated profession with regular external quality reviews, we have transparency obligations that other professions do not and we have very powerful international brands which bring a real global capability to the services we provide. Today the accounting profession is a regular, serious adviser to governments and a regular and serious adviser to any sizable enterprise or project. This is vastly different to the profession I joined 37 years ago."

When in 1972 he joined Norman Spiteri & Co. the profession comprised probably less than 150 people providing essentially auditing and accounting services but, Mr Bonello says, "it was also a pioneering time".

He explains: "Norman Spiteri had vision when in 1970 he took his firm into what was the Cooper Brothers network not as a 'representative' of a foreign firm to service any of their clients in Malta but to truly become an integral part of that network. This meant becoming a Coopers firm in all respects - adopting all Coopers work practices, subjecting the firm to external quality control from Coopers but, above all, staffing up the firm with people who could take the firm to new levels.

"We were the first firm to really become part of an international network and it went on from there. Roderick Chalmers had joined the firm a year earlier, head-hunted by Walter Ebejer, as I was, from London. Roderick and I had known each other since we were children and those early days were very exciting for us."

Mr Bonello has seen his firm grow from around 20 people billing probably less than €200,000 to a firm of over 300 people billing over €15 million. What contributed to this expansion?

"I think it was the constant drive to innovate and to lead. I believe that this has enabled us to always attract a higher proportion of the best people and the combination of having great people and always being the first in anything we did helped us first attain and then maintain clear leadership in the profession.

"According to the transparency reports published earlier this year we are by far the leading firm by any measure. We have a significant lead that does not come about by accident or by mergers alone. But the mergers were important. In 1984 we merged with Joe Zammit Tabona who was running the successor firm of the first firm in Malta, Turquand Young & Co. This added a lot of depth to our client base given that firm's long history. The merger between Coopers & Lybrand and Price Waterhouse in 1998 added some great people to our team."

He says the most interesting aspects of his career have been connected to client work. At some time or another he was directly involved with most of the firm's major clients "and therefore in my 37 years in the firm I have had some incredibly interesting client assignments".

Mr Bonello says that from a management point of view the merger between Coopers & Lybrand and Price Waterhouse in 1998 was also very satisfying.

"That was a merger that many people outside the two firms expected to fail and I was given a clear mandate by the partners of both firms to lead the merger and make it happen. That trust and support from the partners was fundamental to its success but it still took nine months' hard work and perseverance - and a little patience."

He says another very satisfying aspect was in mentoring and developing some of the "great people" there are in the firm. He adds: "People issues have always been something on which I focused very hard - we are after all a peoples' organisation so it was a logical priority."

What advice did he have for Kevin Valenzia, his successor?

"I don't think I need to give Kevin much advice. As he himself has said, it is important that the firm retains its ability to stay close to our clients, that it retains a commitment to quality and professionalism in everything, that it continues to invest in people, that it retains its determination to provide services at levels which are distinctive, and that it continues its consultative approach to carrying out our business. Basically the advice would be to continue to do what has served us so well but at the same time always being ready to respond to new circumstances and new opportunities."

Mr Bonello was also one of the pioneers in the development of Malta as an international finance centre, and was the first President of the Association of Nominee Companies, now the Institute of Financial Services Practitioners. Did he think Malta's future as an international finance centre was secure?

"Yes I do. The industry has now gained traction with a wide range of highly skilled professionals operating in a seriously and efficiently regulated environment. These characteristics are not going to go away. Our tax laws are EU compliant and our network of double tax treaties is growing, not shrinking. So I believe that as things stand our future as an international finance centre should not be any less secure than, say, that of Luxembourg. If circumstances force us, at some future point, to amend our tax laws, or part of them, I am sure we will adapt."

He adds: "One reflection - this is one of the few areas where we have had political consensus. Perhaps the success in this area shows we could do with more elsewhere".

He believes Malta's membership of the EU had an enormously beneficial effect on the industry. "It certainly had an effect on our firm and I am sure it did on other firms too. It also changed the regulatory landscape which created more work for the profession and took us to a level of sophistication that we would not have otherwise reached," he said.

He adds: "In our transparency report published on March 1, this year, we reported that we doubled the size of our practice since 1993 - since the certainty of membership. Much of the growth was in the international finance centre space."

Mr Bonello also spent almost five years as Metco chairman, from 1992 until the end of 1996. Was it a culture shock having to work within the public sector?

"No, in fact it was very interesting. Metco was not a very large organisation - around 40 people - and it did suffer from some of the characteristics that blight the public sector.

"But it also had some very good people and the work of promoting the export of Malta-made goods was very interesting." He explains that the focus at the time was precisely to try to act as if we were not a public sector organisation and to be client and service focused - "not usually the favourite priorities of public sector organisations".

He says that at Metco he had some strong relationships with the manufacturing community with a lot of participation from the leading Maltese manufacturers.

"I also had a very strong board with people like Charles Busuttil of Foster Clark, the late George Borg of Wrangler, Alec Mizzi of Alf. Mizzi and Victor Camilleri from the Ministry of Foreign Affairs.

"We had very active participation from representatives of the Chamber of Commerce and the Federation of Industry as they were then, so the place was not exactly a typical public sector organisation - board meetings were very colourful but very focused.

"I also had a lot of support from the ministers to whom we reported - for the bulk of my time there it was Foreign Minister Guido de Marco who was extremely supportive and very keen on adding a trade dimension to his ministry. A very interesting feature of the job was accompanying Prof. de Marco on a number of his official overseas visits to Saudi Arabia, Japan and many Gulf countries. Even though I was also effectively still running PwC for the duration, I look back at my time at Metco as interesting, very busy and, based on the comments from Metco users at the time, successful."

Mr Bonello will retire from the firm at the end of the year but says he has not yet made any plans regarding what he will do.

"I will remain focused on the firm until I leave at the end of the year and then I will start to consider what to do. I think, first and foremost, I would like to take some time off - perhaps even a couple of months - but after that I am sure I will want to start to work again. I don't think I'm ready to put my feet up yet. I thought I would perhaps try to improve my golf by playing more often but my friends at the golf club tell me that would be a waste of time - chasing a hopelessly lost cause. So I suppose I will have to work," he said.