BDO underdog wins race to lead UK’s fifth-largest accounting firm

Partners at BDO have elected Mark Shaw to lead the UK’s fifth-largest accounting firm in a surprise win for the firm’s head of business restructuring.

The mid-tier accounting and advisory firm said on Wednesday that Shaw, who has not yet served on BDO’s leadership team, will succeed Paul Eagland as managing partner in October.

Scott Knight, the firm’s head of audit and assurance, was seen as a favourite internally to succeed Eagland, according to multiple people familiar with the matter. However, it was announced to partners at a meeting on Tuesday that Shaw had triumphed in a five-candidate race.

BDO has expanded rapidly in recent years, particularly in its audit practice led by Knight, but has also attracted increasing scrutiny from regulators.

It has been the most successful of the mid-tier accounting firms in winning more business among FTSE 350 companies in recent years, but in its annual review of audit quality last year, the UK’s accounting watchdog criticised BDO for “unacceptable” shortcomings in its audit work.

One partner said that Shaw’s pitch was to “go for growth, but go for controlled growth”, adding that he made an “emotional connection” with partners by emphasising the importance of BDO’s heritage and its partnership model — a potential signal that he would not seek to follow BDO’s US firm, which last year agreed a $1.3bn debt deal with private equity group Apollo.

“He came across as presidential but at the same time extremely respectful of the firm and its culture,” the partner said.

Under Eagland, revenues at BDO jumped from £405mn in 2016 to £935mn in its most recent set of financial results. Partner numbers also increased from 244 to 441 during his tenure, while total headcount grew from about 3,000 to 7,500.

During the Covid-19 pandemic, the firm furloughed 700 staff, unlike its rivals, and initially decided not to repay the £4.1mn in taxpayer support, but reversed its decision following a public backlash.

Eagland will remain in post until the end of September and will work with Shaw to ensure a smooth transition, the firm said.

The succession comes at a turbulent time for the wider professional services industry, with many of BDO’s rivals forced to cut jobs in recent months amid a slowdown in the advisory market. The adoption of artificial intelligence within the industry is also in its infancy.

Shaw, who has been a partner at BDO since 2006 and has served on the firm’s advisory executive, said: “We have much to be proud of from our journey to today, as a near-£1bn UK firm. This is a time to build on our heritage, whilst looking to our future.

“I look forward to working with our talented partners and colleagues to achieve balanced growth over the coming years, which puts serving the public interest, doing the right thing, culture and wellbeing at its heart.”

Eagland said: “I have every confidence that, under Mark’s leadership, the firm and its 7,500 people will continue to grow and succeed.”

Partners at BDO were paid an average of £609,000 in the firm’s last financial year, a 6 per cent drop on the previous year.