Paul Boyle took the biggest gamble of his career when he left his clearly defined role as finance director of Cadbury Schweppes last year to join the uncertain world of the Financial Services Authority. There were no similarities between his previous jobs and his new role as chief administrative officer at the authority - apart from his background in finance. The fact that he willingly made this move, despite his lack of knowledge of the financial-services sector, says a lot about Boyle. He's a risk taker, and there is little doubt that the FSA is lucky to have him. Those who know him well say this quietly-spoken accountant has proved himself to be an impressive catch. He is one of only a handful of high-profile recruits who have been tempted to leave well-defined paths and take off down uncharted routes, such as those at the UK's changing regulatory regime. Boyle trained at Coopers & Lybrand and qualified in 1983. Five years later he joined WH Smith and then headed for Cadbury Schweppes in 1991. He held several senior positions there and was made finance director in 1996. His move to the FSA came in 1998 where he initially took the mantle of business planning and finance director. Internally, the FSA is still only an umbrella organisation to describe a loosely knit combination of nine regulatory bodies including the Personal Investment Authority and the Investment Management Regulatory Organisation. Although the authority took over banking supervision during the first phase of its establishment (October 1997 to the spring of 1998), it remains the case that each of the old regulatory bodies still has a legal right to supervise its particular sector. This peculiar situation will exist until royal assent is given to the Financial Services and Markets Bill. This will transfer legal power to the FSA and end current conditions that mean, for instance, that bodies such as IMRO have legal responsibility for fund managers but no staff, because they have now all been moved to the FSA's Canary Wharf headquarters. But the Bill is not expected to be passed until Easter next year, and this presents huge hurdles for Boyle. He has had to grapple with a fragmented organisation while getting used to the specific needs of a high-profile government agency that is seldom out of the public eye. 'We do not have shareholders as such, but do feel very much in the public spotlight because we are accountable to Treasury ministers for the way we operate. 'But we are funded by the private sector, which means there is a strong sense of accountability to the industry that pays the bills,' he says. And therein lies the challenge. Boyle has to ensure that costs are kept in check while allowing enough funds to be available to allow the FSA to perform its duties as an efficient regulator. However, he had a rather harsh wake-up call to the reality. One of the first things he had to do when he joined was to prepare the budget for publication as part of the process of consulting the financial services industry on fee proposals for the coming year. 'That came as a bit of a surprise,' he acknowledges with a smile. Not only did he have to publish his budget for the first time, he had to compile a budget for all nine bodies, with no past example to base the figures on. He has also had to produce accounts and financial statements for each of the nine bodies that comprise the authority. And that meant no fewer than five year-ends to achieve simultaneously. This mammoth task has been hindered by the fact that Boyle inherited an IT infrastructure that lagged far behind his needs. 'What we have had is a lot of hard work and going through this for the first time last year was pretty complex. 'The FSA was the old Securities and Investment Board with about 100 staff and an expenditure just exceeding £20m. We have now added £130m of costs to it, so all the accounting is designed for an organisation of a much smaller size.' Faced with the task of operating a super-regulator that has outgrown its infrastructure several times over may have sent other accountants running in the opposite direction, and Boyle admits that the move was a bit of a personal gamble to begin with. He left a well-managed company to go to something completely new. But he has no regrets about becoming a player in an evolving body - one which has been created not only to streamline regulation, but to restore credibility to a troubled sector and thereby promote prosperity in the financial services industry. In search of a happy ending He wants to be part of a story with a happy ending and as head of the finance team, Boyle will be central to the eventual success of the organisation. The fact that he has to juggle the finances of nine bodies before they eventually merge is just something that has to be dealt with. He has the support of a modern if small budgeting and management accounting system, and has put in place procurement procedures to help get the best value from the FSA's purchases. But his key expense is people. Historically, the organisation has had a high staff turnover and so attracting high-calibre staff means competing with City salaries. That creates another conflict of interest between costs and quality. Boyle also attends the regular policy-making body of the FSA in his capacity as cost custodian, and as such has a bird's eye view of the internal politics of the financial services industry. And his vantage point will only broaden as the authority is given more responsibility. Regulation of mortgages and Stock Exchange members are two areas already on the agenda, and accountants conducting investment business will follow. Looking at the finer details Although the finer details of what constitutes 'investment business' have yet to be announced, there is no question that many firms will lose their traditional relationship with the accountancy institutes to be regulated by an umbrella body. To many firms the FSA is no more than a necessary evil. And although it is seldom out the news (and not always for the best reasons), its impact will soon become clearer and accountants will soon become part of a wider regulatory framework. Words to describe the body formed to bring together nine organisations with financial regulatory power, range from at worst 'draconian' to at best 'controversial'. Boyle is matter-of-fact about the bad PR: 'The difficulty we have is that our activities touch on so many different organisations and interest groups that on almost any issue you care to mention we are likely to be criticised from some angle for being harsh, and another for being feeble,' he says candidly. But whatever the description, accountants will be part of it and another cost for the finance department to worry about. For now, Boyle is looking forward to the time when the FSA can become a single body in more than just title and he will be able to plan more easily for the future with new finance and IT systems in place. It is all a far cry from the corporate lifestyle at Cadbury Schweppes. But he could never be accused of not being willing to try something new. THE BIRTH OF A SUPER-REGULATOR The Financial Services Authority was born in 1997 as the UK's new financial regulator, designed to enhance the protection offered to consumers of financial services and improve the supervision of the institutions under its guidance. It was formed using the old Securities and Investments Board as its foundation, but will merge with eight other regulators to form a single umbrella body. These are: the Building Societies Commission, the Friendly Societies Commission, the Insurance Directorate of the DTI, the Investment Management Regulatory Organisation, the Personal Investment Authority, the Registry of Friendly Societies, the Securities and Futures Authority, and the supervision and surveillance division of the Bank of England. In launching the authority, chairman Howard Davies set four key objectives for the body. These are to work with the Bank of England to sustain confidence in the UK financial system and markets while protecting consumers by ensuring companies are competent and sound. It has been created to promote understanding of financial products and become involved in the monitoring, detection and prevention of financial crime.
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