Capital Growth Report
When it comes to L.A.’s future, Tony Anderson has his eye firmly on the bottom line. As Pacific Southwest area managing partner for accounting giant Ernst & Young, Anderson has spearheaded initiative programs for minority talent; in his other life as a philanthropist, he has done work for the Children’s Bureau and been on the boards of the California Science Center and Pasadena Pops. Appointed chairman of the nonprofit Town Hall Los Angeles program in January, Anderson will spend his two-year term overseeing a forum that since 1937 has hosted such figures as Mikhail Gorbachev, John F. Kennedy, Nikita Khrushchev and Condoleezza Rice. We requested a portfolio review.
The accounting industry is under the microscope and facing possible federal regulation. Is that a good thing?
It is a good thing, in my opinion. This is a profession that for decades has been self-regulated. In the last several months we’ve gone from self-regulation to having external regulators. It’s caused us to really look at ourselves and how we do virtually everything. As a result, I think we are better as a profession.
How do you see the accounting and auditing scandals of the last five years?
I don’t think people talk about the need to really understand the ethics and morals of an organization you’re doing business with. If someone doesn’t have the kinds of ethics and morals that you have, you probably shouldn’t do business with them. Sometimes you have to walk away. There is no client too big where we would do something that we think is inappropriate. There is nothing more important than your personal integrity.
What needs to happen to restore faith in corporations and financial institutions?
I think the right things have happened. I think the Sarbanes-Oxley Act has been a good thing. I think all of the different groups that have some impact on financial reporting in our country and the financial markets are doing their part. I go to a lot of audit committees and I see it happening every day. We are on the right track and we’re making progress.
You are one of the highest-ranking African Americans in an industry that has lagged behind in promoting women and minorities. What are the biggest obstacles to diversity in the accounting field?
Our biggest challenge right now is attracting and retaining the best people, not just women and minorities but everybody. If somebody has to work really hard and they have a kid playing in a baseball game in the afternoon, we ought to make sure that we have an environment where somebody can leave and go see that baseball game, while at the same time being able to handle the responsibilities they have. It’s making sure there’s flexibility in everyone’s schedule. The vast majority of people that we attract to the firm are ambitious. They want to learn and grow. If they’re not, they’ll leave and find it somewhere else. We have to maintain an environment where people learn and grow over the years. Those things are key.
What sets Los Angeles apart from America’s other financial centers?
We’re a community of entrepreneurs, a community of small and mid-size businesses. We don’t have many Fortune 100 or Fortune 500 companies. New York does and Chicago does. Because we have so many entrepreneurs, there’s probably more innovation going on here than in any other place in the country. Ernst & Young has an entrepreneur of the year program. We look for young, growing companies where somebody has put everything on the line to develop something special. When you sit down and listen to what some people in L.A. County have done, you’ll feel pretty darn proud of Los Angeles. I’m the first to get on the platform and say we need more Fortune 100 companies. But all you have to do is get out in the community here to see the innovation.
What’s the key investment for L.A.’s future?
The thing that we should focus on that could make us probably the most outstanding city in the world is the connection to Asia. We have Caltech in Pasadena. It’s not just Caltech, you’ve got USC and UCLA. When you think of what we can do with the intellectual capital we have, you could build something that would make Los Angeles outstanding. Should we focus on Caltech, or bring a football team to Los Angeles?
Town Hall Los Angeles has hosted figures with global name recognition. As the program’s chairman, whom would you like to have as a guest?
Colin Powell. I think he’s a fascinating person. Have you read his “18 Lessons on Leadership”? He’s fascinating.
You grew up in a poor area near Chicago. How did that experience affect your life choices?
I grew up in a little town called Phoenix, Illinois. It’s a town of about 2,000 people. It was in the Chicago Tribune every year when they would list the wealthiest suburb down to the poorest. Phoenix wasn’t the poorest, but it was real close to the bottom. I couldn’t go to college unless I paid for it. When I was 16 I was a stock boy at a grocery store. I worked eight hours a day, evenings and weekends. That experience made me realize there’s got to be something better in life. I’m a first-generation college graduate.
What stays with you that you learned as a young man?
I never give up. I just never give up. No matter what it is. That’s the thing I try to tell my two kids. Never, ever give up. It may be hard, or you may feel like it’s time to just walk away, but you will always regret it if you do.
