SGV: Eight decades of excellence

I’m not an accountant and never took an accounting subject – I couldn’t tell you the difference between “book value” and “equity” if my life depended on it – but as fate would have it, I’ve been privileged to have an inside view of the Philippine accounting profession as an author and even, to some extent, a confidant.

It all began 20 years ago when I was asked to write the biography of the man whose name is synonymous with Philippine accountancy itself – Washington SyCip, or “Wash” as generations of Filipinos knew him. Most of us, myself included, probably grow up thinking that nothing could be more boring than an accountant’s job (but then again, there’s the elevator operator) – all those days and nights poring over ledgers and scribbling notes and figures with a fine-tipped pen.

That impression went out the window when I met and got to know Wash – a certified genius who graduated from college at 17, summa cum laude, and soon began teaching students older than he was. He took his master’s and became a CPA at 19 – but was too young to legally practice, so he went to the US for his PhD, only to be caught there by the war. Upon hearing the rumor – a false one – that his father Albino had been executed by the Japanese, Wash signed up with the US Army, which promptly realized they had a prodigy on their hands, and assigned him as a codebreaker in Calcutta, where he spent most of the war. At war’s end, on the voyage home, Wash faced a choice: return to the US and take up a job as an accountant for Women’s Wear Daily, or stay and start his own firm. He chose the latter and founded what would become the accounting giant SyCip, Gorres & Velayo, or SGV as we’ve known it since.

Wash died in 2017 – characteristically enough, on a flight to America, the other pole of his storied life. The firm that he started has just marked its 80th year, and again I’ve been fortunate to have been asked to write its commemorative book, published by SGV as SGV 80 Years: Celebrating a Continuing Legacy of Integrity, Excellence and Purpose. (Last year, I also wrote A Century of Philippine Accountancy for the Philippine Institute of Certified Public Accountants, marking the profession’s centenary in the Philippines.)

SGV’s rise to the top of an industry once dominated by British and American firms and its continuing leadership in a new century is a study in corporate culture – in an organization’s adherence to core beliefs and in how a generation of leaders builds on previous ones to keep the firm not only alive but at the cutting edge of its profession.

With its absorption of Fleming & Williamson’s audit practice in 1958, SGV became the country’s largest firm and completed the Filipinization of the profession. In the 1960s and 1970s, it became the first Asian multinational, with member firms from Taiwan to Singapore. By 1971 SGV was serving 63 of the country’s top 100 corporations.

A big turning point came in the early 1980s, when the Philippine economy weakened and could no longer support the regional network, so in 1985 Wash and his partners joined Arthur Andersen’s global organization, trading independence for technology, training and reach.

Arthur Andersen’s implosion in the early 2000s led to another crisis, resulting in SGV’s tying up with Ernst & Young, a productive global association that continues to this day. Then Country Managing Partner Cesar Purisima steered the firm through that period deftly and later reorganized SGV into market circles, which later evolved into market groups, to make the firm more responsive to its clients’ needs. Its emergence from crisis also brought to the fore the concept of stewardship – of the firm as something held in trust – first enunciated by CMP Dave Balangue and developed by CMP Vic Noel, as a “reminder to the Partners that we are not owners of the Firm but rather its stewards… We had to think of SGV as more than a business, but as an institution that it was our duty to perpetuate.”

It was CMP Itos Cruz who pushed that further into one of SGV’s central tenets – what it calls “purpose,” by which SGVeans aim “to leave the Firm stronger than we came in, so we could help the Filipino people better. Whatever increase we bring to the value of SGV, we leave it to the next generation to build upon. We clarified our corporate purpose accordingly: to nurture leaders and enable businesses for a better Philippines.”

When the pandemic hit, SGV was prepared, because CMP Wilson Tan had providentially just refreshed the firm’s business continuity plan. As a result, SGV was able to shift to remote work almost overnight, to pay salaries early, to get its partners to take a temporary cut and to lay off no one. Today, under Rosing Fajardo – the firm’s second female CMP – SGV employs nearly 6,000 across four service lines, adapting to a business and political environment marked by rapid technological change, the challenges and opportunities of artificial intelligence and the issues of sustainability, demographic change and geopolitics.

Key to SGV’s longevity and success has been its adherence to integrity, a principle laid down by Wash SyCip from the very beginning, when he said of SGV’s predecessors: “One group practices discrimination by color of skin, the other practices discrimination by blood. So I sought to get the best people to join me. I told them that even when I get married, I’m not going to have my children in the Firm. There should be complete meritocracy.” (Indeed, all of Wash’s three children have pursued other careers.) SGV has been known to drop major clients over issues of misreporting.

One way SGV has maintained that integrity has been to draw a clear, sharp line between its business and its ties to government. While many ex-SGVeans have joined government in high positions from Cabinet secretaries to House speaker and prime minister, they’ve done so knowing they were taking a one-way road. Wash SyCip himself laid down that rule: “We don’t want people to think that we are putting somebody in government so that he would have influence when he rejoins us, because that would affect our integrity… If we lose them to government, then that is one of our contributions to our developing nation.” Cesar Purisima recalls Wash telling him that he should “look at government the way a moth looks at light.” (It certainly deserves to be noted, to be fair, that some of SGV’s contributions to government could have served and performed far better had they kept “integrity, excellence and purpose” at heart after the transition.)

At a time when there seems to be a dire shortage of these qualities in public life, SGV’s history reminds us how the private sector can help bring out the best in us – with exemplary leadership and good corporate citizenship.

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Email me at [email protected] and visit my blog at www.penmanila.ph.