Maria Micallef

Managing Partner, RSM Malta

Maria Micallef is managing partner at RSM Malta. She has extensive experience in servicing local and international companies in M&A, corporate finance, business planning and risk management. She is a visiting lecturer at the University of Malta and provides training courses on risk management and internal audit. Ms Micallef has a B.A. Hons Accountancy degree and is a Certified Public Accountant and a Certified Fraud Examiner. She is a fellow of the Malta Institute of Accountants, a member of the US Institute of Internal Auditors and a member of the Association of Certified Fraud Examiners. She is also a council member of the Malta Institute of Accountants and was its President from 2013 to 2015.

Bad news does not age well

Saturday 18th March 2017

By now we are all familiar with the colossal mistake that occurred during the 2017 Oscars. In my 30-year profession, I have seen accountants blamed for many things, but it never occurred to me that we would also manage to give our two-penny worth at an Oscars event.

Yet what struck me in all of the hullaballoo was Mr Ryan’s, PWC’s US Chairman and Senior Partner statement – he said: “We have to get to the bottom of this, and if we made a mistake, we’ll own up to it. My philosophy in life is, bad news doesn’t age well.”

Bad news does not age well – how true and important a mantra to adopt in our professional life.

When we dodge the tough episodes, we might be making life easier on ourselves for a while, but it will probably only get worse and possibly out of hand as time goes on. I once read that top performers in professional services are proactive in addressing issues and tackling problems head on. They put critical issues on the table quickly, both internally and with their clients. They do not procrastinate, get emotional, or take bad news personally.

Rather, the effort is on getting the bad news out in the open and working to find the best solution to the issue.
The same philosophy should apply in any organisation. Some companies will not share bad news because they fear the consequences – some real, some perceived. All companies want to look strong. And there is nothing wrong with that per se – there is, however, something amiss when such continues to be the case even when it is clear to that company that there are severe problems that are bursting to come to light. I know of companies that faced up to their severe liquidity problems, swallowed their pride and went to their suppliers to renegotiate better repayment terms. I also know of companies that refused to do this, said everything was OK and then had to close down.

Employees of an organisation should not be discouraged from, or indeed discriminated against, when presenting bad news. This is especially the case in good times when management may feel on top of the world in view of the strong results being achieved and would not appreciate communication that may distract from, or cast doubt on, their performance. Employees should always be made to feel that it is OK to point out that ‘the Emperor has no clothes.’

The important thing to remember is that in bad times, it is not simply about assigning blame. It is rather about solving problems. If something does not work, it doesn’t simply mean that the people involved should suffer the consequences – it is wider than that and it means that we have to find a solution that works and address the shortcomings identified with the failures.

If you want to succeed, you need to work out how to deal with bad news. The ability to keep a clear head to handle the traumatic, the unforeseen, and the downright ugly swiftly and effectively is something that can make you stand out, even in bad times.