Founding Partner Frances McLeod speaks to Leaders League
As featured in Leaders League
FRA Founding Partner Frances' McLeod speaks to Leaders League about global investigations trends, ESG and outlooks, the impact of the Russian invasion of Ukraine, and the volatility of the cryptocurrency market.
LEADERS LEAGUE: You are the Founding Partner of Forensic Risk Alliance which was created in 1999 and assists global corporations as well as law firms in the US and Europe in their international corruption and fraud investigations. In your expert opinion, what is the role of a Forensic Accountant in today’s world?
Frances McLeod: To be truly effective, you must be able to seamlessly integrate and willingly collaborate with both inhouse and outside counsel and become a member of the team. This is key to developing and executing a strategy that will not only be accepted but also successful. In addition, it is necessary to be comfortable with change and adapt easily to new processes. In today’s line of work, priorities are constantly shifting, and it is part of our job to remain nimble and recognize the impact of these changes on investigative processes. Cultural experience combined with commercial awareness is a wonderful skill to have as a forensic accountant – being able to navigate different jurisdictions effectively yet sensitively is something that cannot be taught. Arguably, the greatest role of a forensic accountant today, with the increasingly complex data sets now involved in most investigations, is to be able to take large amounts of information and distill the key analysis in the way that the client needs it.
How have environmental, social, and corporate governance (ESG) standards impacted businesses and their way of functioning? What is the future of ESG and how should corporations prepare themselves?
ESG, particularly environmental reporting and fraud, continues to emerge as a key area for our clients across all sectors and jurisdictions. Climate change is now at the forefront of public life, and what businesses say about themselves must stand up to scrutiny. This is a complex area – we’re seeing environmental reporting standards align across some jurisdictions but there are real areas of divergence of approach. We’re working with clients to develop compliance programs that level up to the highest standards relevant for them, and ensure they’re rigorously tested. Consistent and accurate reporting to investors, executives, and clients is imperative. We’re starting to see more investigations announced from a variety of authorities in many regions, not just the US. This pace will only increase.
"We’re starting to see more (ESG) investigations announced from a variety of authorities in many regions, not just the US"
How has the Russian invasion of Ukraine affected your consulting firm and what future impacts should companies be prepared for?
Russia’s ongoing invasion of Ukraine has exposed the way that companies operate in and near conflict zones, as well as how they deal with parties in countries engaged in armed conflict, which are increasingly facing serious legal risks. Economic sanctions quickly emerged as the primary strategy for countries looking to curb Putin’s government’s acts of war in Ukraine. With no end in sight for the war, they are now a long-term, and perhaps permanent, fixture impacting all aspects of our lives. The exceptional breadth, depth, and number of sanctions against Russia rolled out at pace has presented significant challenges for businesses, organizations, and governments alike. From the court of public opinion to the laws of the land, only time will tell what the full impact will be.
How does Forensic Risk Alliance offer more than just forensic accounting consultancy and advice? What differentiates you from competitors in the market?
A commitment to excellence and a commitment to evolution. We have seen several enforcement waves and compliance challenges emerge over the past 23 years and we have been able to pivot to address them on behalf of our clients. We are trusted advisers to our clients, and people whom they actually enjoy working with. Many of our clients have worked with us for over two decades and over that time we have built strong client relationships acting as a partner, valued adviser, and thought leader. We have consistently fostered a culture of openness and inclusion, which translates into people being their genuine selves at work. I believe that this allows our people to be better consultants.
Diversity, equity, and inclusion (DEI) in the industry are very important. What have you seen in terms of progress and what do you hope to see continue?
Since founding FRA over 20 years ago with my other two co-founders, we have always ensured that these core values have been embedded into the firm through our work to promote ethical business practices and rootout corruption and fraud around the globe. It has been incredibly rewarding to see the one firm collaborative culture, which was one of our most important tenets when we founded the firm, and it continues to be embraced across our global team. I am also very proud to have built a firm that is nearly half women, with many strong women leaders. I am dedicated to the role I can play in bringing about positive change in the communities in which I live and the industry in which I work. Our industry has made progress around these values in recent years, however, there is still a long way to go. A new role I have seen in our industry is that of DEI Officer arguably signaling a positive move in firms proactively committing to doing more within this space. The 200+ members of the FRA family are deeply committed to being allies in the fight for justice and equity and will continue to do what we can in helping to build a more diverse, equitable, and inclusive future.
The cryptocurrency market and its prices have crashed throughout 2022 due to a variety of reasons including sharp market volatility and scams. What are some trends you expect to see going into 2023 and how will this potentially affect you and/or your clients?
Cryptocurrencies have been around for over a decade yet have only recently been accepted as more mainstream forms of investment and finance. The exponential growth in the use of cryptocurrencies has led to several countries formally accepting them as legitimate forms of payment. Recent price volatilities and nascent regulatory oversight however has enabled cryptocurrencies to become the latest vessel for fraudulent activity and deception. We are now seeing a wide range of schemes perpetrated through the use of cryptocurrencies, including traditional frauds such as bribery, embezzlement, money laundering, pump-and-dump schemes, and Ponzi schemes. 2023 will continue to see increased pressure on authorities to set in place stronger regulations around cryptocurrencies and digital assets. Practitioners should remain aware of the trends and regulatory developments in these areas and be proactive in developing the tools and techniques required to conduct investigations. Many of the necessary investigative techniques will be familiar to experienced practitioners, although often requiring a slight nuance to adapt to the nature of the allegations subject to investigation.
"The exceptional breadth, depth, and number of sanctions against Russia rolled out at pace has presented significant challenges for businesses, organizations, and governments alike"
What advice would you give to young professionals who hope to work in the industry?
Our industry offers an incredible variety of international work. No project, no client, and no issue are the same and they all present their own nuances and challenges. I particularly enjoy the dynamic of successful, collaborative relationships where the value added is measurable – even when there have been tensions in getting to the right result. If you are willing to listen and learn from the experts and immerse yourself fully into client relationships and projects, you will have a very successful and fulfilling career as I have had and am still having.