EY partner: Establishing a strong virtual presence, digital marketing amongst to-do list amidst economic impacts
Jacky Lai recognised how the pandemic collapsed businesses’ digital roadmaps in a few months.
Jacky Lai is currently a Partner at EY, having over 24 years of professional experience and serving clients in a wide range of industries, including environmental energy, retail and consumer products, food and beverage, as well as construction and manufacturing of garments and electronics.
He has extensive experience with initial public offerings (IPO), including assisting state-owned enterprises with restructuring and advising on cross-border listing procedures. In Hong Kong, he is also experienced in providing assurance and advisory services to multinational and local companies and has extensive experience with International Financial Reporting Standards, Hong Kong Financial Reporting Standards and domestic IPOs.
Lai is also a practising CPA of the Hong Kong Institute of Certified Public Accountants (HKICPA), and a committee member of HKICPA’s professional committees.
Talking about how businesses can flourish amidst a challenging economic environment, he advised that adopting an agile approach and keeping an eye on the market leaders and competitors can help business leaders grow and succeed.
“It is critical for businesses to stay resilient and robust to survive. As a result, business strategies have to be re-evaluated to find new revenue generation opportunities. The rapid transformation of business can bring prosperity to agile companies,” Lai said.
The EY partner sat down with Hong Kong Business to provide insights on how outstanding quality assurance can improve management in organisations, as well as how leaders can promote diversity & inclusion, and sustainability initiatives amongst stakeholders.
How does outstanding quality assurance help improve management in organisations?
A high-quality external audit provides not only unbiased eyes for an organisation but also valuable business insights. This absence of bias is hugely important for reinforcing the credibility of a company’s financial statements, pinpointing areas where compliance efforts may be lacking and assisting organisations to better know the strengths and growth areas. Taking a financial or integrated audit as an example, it focuses not just on the financial figures. The audit also involves the accounting process, the internal controls, as well as the risk assessment. Therefore, the audit may reveal weaknesses in an organisation’s business processes and control deficiencies. The recommendations given by auditors to the key decision-makers within the organisation can assist the management to enhance internal controls and accelerate automation in order to streamline business and accounting processes. A high-quality audit also brings knowledge of industry sectors with trends and best practices so that management is able to perform benchmarking or gap analysis to facilitate goal setting and performance evaluation in various aspects.
As corporate’s activities become increasingly dependent on digital technologies, companies in every sector are generating and gathering ever-increasing quantities of data and creating entirely new business models. A high-quality audit nowadays also embeds a data-driven approach and advanced technology applications. The technology tools and data-driven processes increase trust in the audit process and allow auditors to demonstrate how they have reached their conclusions, providing far greater transparency for stakeholders. The data analytics technology and approach cover the vast volume of data population in full and allow auditors to dive into a single transaction level, identifying trends that point to risks to the management.
How can management ensure an inclusive and empowering environment for their employees and clients?
Inclusiveness is about leveraging our differences, where everyone experiences a sense of belonging and feels safe to surface many aspects of who they are and bring forward their perspectives and ideas.
Management has to include inclusivity as part of the company’s values and to make this value visible to all employees and clients through effective promotion, communications and training. One of the most common ways management can create an inclusive workspace environment is through reward and recognition. It is important to ensure employees base their reward on tangible as well as intangible efforts which allows them to feel included based on what they contribute to the firm.
Management shall seek out viewpoints different from his/her own to assess situations and ﬁll in blind spots and gaps. It is critical for management to create psychological safety for those around to feel comfortable voicing dissenting views.
Finally, management can create an inclusive workplace environment by conducting inclusivity events. These events can either take place within the office or remotely, depending on the lockdown restrictions. These events can help employees get to know each other, and that’s why it’s important that every employee attends these events, at least once. This may be inconvenient for some, especially introverts. However, management can actually use these events to help introverts engage in conversations with fellow employees.This not only improves teamwork and cooperation but helps employees bond with each other.
How do you think businesses can stay afloat amidst a challenging global economic situation? Are there key trends to watch out for?
The current global economic outlook is challenging under the fragile global macroeconomic backdrop, rising inflation, ongoing geopolitical tensions, market volatility and the continued impact of the pandemic.
It is critical for businesses to stay resilient and robust to survive. As a result, business strategies have to be re-evaluated to find new revenue generation opportunities. The rapid transformation of business can bring prosperity to agile companies whilst overthinking and conservative leaders are left behind. Adopting an agile approach and keeping an eye on the market leaders and competitors can help business leaders grow and succeed.
Whilst most companies had extensive digital roadmaps or plans across several years, the pandemic compelled businesses to compress those processes into a few months. The lockdowns also made the virtual world the go-to place for consumers, for shopping, socialising or entertainment. Establishing a strong virtual presence, digital marketing and custom software solutions are some burning tasks that deserve the spotlight on all business to-do lists for now and beyond.
Talent retention - most of the reasons responsible for record-breaking resignations, like upgrading to a better pay package or revisiting work-life priorities, in many ways, stem from an organisation’s inability to develop and retain talent. Dissatisfaction with the workplace culture is another aspect that could encourage an employee to consider switching to another organisation. Understanding the root causes of why people are leaving your organisation, improving workplace culture and developing a tailored retention program could help a company retain the best talents.
As industries are urged to employ ESG programmes in their operations, what do you think management can do to promote this amongst its stakeholders? What do you think will be some challenges in this undertaking?
Businesses exist to serve different stakeholders, including customers, employees, communities, the environment, and suppliers—in addition to shareholders. Leaders must be strategic about communicating ESG impact to stakeholders. This means that leaders must clearly communicate goals, action plans, and progress on ESG issues both internally and outside the organisation.
In recent years, there has been tremendous pressure to take into account stakeholder considerations in business and governance practices. Corporate directors and executives embrace the ESG movement, but also believe they are already effective in advancing stakeholder interests. However, the legal and economic implications of ESG are unclear. Do companies make ESG investments that are costly to shareholders? Can they do so legally? Do these create long-term benefits? The relation between ESG and performance is unproven. The lack of rigorous, consistent, and reliable metrics makes it difficult to measure ESG effectiveness and its impact on performance.
In many places, the law and governance structure is still shareholder-centric. Change in laws and regulations would be required for boards to make decisions that reduce short-term economic outcomes for shareholders to benefit other stakeholders in a sustainable way. The trend across the globe for industries to increase disclosure and compliance with various ESG requirements gradually better placed the stakeholder's interest in the corporation.
For all sustainability-minded stakeholders to assess a company’s future performance, they need a clear and comprehensive picture of its ability to create sustainable value over time—not just a snapshot of its finances. The corporate reporting system needs to evolve and expand to deliver the right information to the stakeholders, including shareholders, regulators, and the public. A globally recognised system for delivering consistent, comparable and assurable sustainability information is in need. Such sustainability disclosure must become a core component of the corporate reporting ecosystem that helps stakeholders assess objectives and progress toward addressing the climate crisis and other important environmental, social, and governance matters.
Coming back from judging last year’s HKB Management Excellence Awards, what are you hoping to see from this year’s entries? What qualities stand out for you?
The world is experiencing a level of disruption and business risk not seen in the past – wars, geopolitical tension, recession threats and continuing pandemic. Some companies fail whilst others innovate, transform and survive. The difference is resilience. There are different dimensions of resilience, from operational, and financial to strategic, from risks, value chain to technology. It is imperative to see how management rethinks, rebuilds and remodel the corporation to strengthen its positioning and even to thrive. The story of building resilient capabilities and navigating the corporation through uncertainties would be attractive to me.