Skip to main content

Professional Insight: KPMG’s Global Head of Valuation on the importance of public trust

28 June 2018

In addition to his day job as a Partner and Global Head of Valuation Services with professional services company, KPMG, Doug McPhee is also a member of the UK Financial…

In addition to his day job as a Partner and Global Head of Valuation Services with professional services company, KPMG, Doug McPhee is also a member of the UK Financial Reporting Council’s Financial Reporting Review Panel and sits on the Board of Directors of the Canadian Institute of Chartered Business Valuators (CICBV). We asked Doug to share some insights on his various roles.

1. What is your role with KPMG and how did your career get you there?

I am a Partner in KPMG’s London Corporate Finance business and our Global Head of Valuation Services, which comprises 1,500 professionals in 50 countries around the globe.

Although a ‘lifer’ with KPMG I had quite a varied route to London, joining the firm in Vancouver, Canada in 1991.

I qualified in Audit as a Chartered Accountant before moving to the Financial Advisory Services business in 1995 where I worked on M&A, Restructuring, Forensic and Valuation projects and qualified as a Chartered Business Valuator.  In 1997 I commenced a 2 year secondment to our London Corporate Finance division at a time when we were investing heavily in the business and growing rapidly.

With all this opportunity – not to mention the great history and travel opportunities – my wife and I decided to stay in London long-term and I became a Partner in 2001.  I’ve spent my career here focussed on complex commercial and regulatory valuation matters, generally in the large cross-border arena working for major corporates, funds and governments in connection with M&A, Joint Ventures, Restructurings, Re-Financings and Disputes.

I spent 2009 to 2011 seconded to our Qatar office in the Middle East working with Middle East Sovereign Wealth Funds throughout the Gulf Cooperation Council (GCC) as well as on the Dubai World restructuring, the largest globally next to Lehman’s.  I headed our EMA Valuation Services business during this time and became our Global Head in 2014 as well as sitting on our Corporate Finance ExCo and Global Leadership Team.

2. What size is KPMG’s valuation practice and where in the world do you operate? Where are you based?

Although officially based in London, I spend a fair amount of my time in other countries, helping our local practices with their strategies to expand and grow, as well as opening and developing presence in new locations.  We’ve seen significant growth in our business over the past 5 years from the impact of increasing regulation – be it accounting, tax, central bank or stock exchange driven.  Coupled with increasing stakeholder focus on Directors and Senior Management to drive shareholder value and avoid value-destructive deals, we feel we will continue to grow our 1,500 strong team.

3. What is the rough distribution of focus across the KPMG valuation service line? (i.e. what areas of activity dominate the time of your 1,500 strong team?)

We have quite a mixed focus in our team.  We cover all asset class valuations including businesses, real estate, intangible assets, property plant & equipment and complex financial instruments.  Our spread of business ranges from regulatory valuations (accounting & tax), to commercial valuations for transactional purposes (independent board opinions, public & private fairness opinions), restructuring (creditor-side, company-side, court-related), financing purposes through to periodic mark to market valuations to funds and dispute and litigation opinions.

Our focus will vary by geography, with our US practice very focussed on regulatory valuations given the dynamics of the local market and our Asia-Pacific and EMA practices having a larger balance of commercial or advisory related projects, an area we expect to grow significantly in the future.

4. KPMG has a Global Valuation Institute – what is this and why is it important?

The GVI is comprised of KPMG professionals and leading academics with strong credentials in the field of valuation and financial reporting who have a shared commitment to bridge academic research with practice excellence.

The GVI encourages members of academia as well as valuation and financial reporting professionals to contribute ideas related to our agenda. Approved submissions can receive grants to support authorship of articles and research.

At the forefront of the GVI’s approach is its commitment to the practical application of quality research and authorship. Therefore, leading academics from highly regarded universities around the world are commissioned to act as advisers. These individuals provide both their insights and perspectives to the GVI’s work.

The GVI’s research agenda integrates numerous areas of topical interest: corporate finance, economics, financial reporting, governance, joint ventures, litigation support, tangible assets, intangible assets, and tax.  For further information check it out at

5. You cover a broad range of valuation areas within KPMG – which areas do you find particularly interesting / challenging as a valuation professional?

From a personal perspective, since the onset of the Global Financial Crisis I have spent the majority of my project execution time in the stressed/distressed restructuring arena.  I find this both intellectually challenging but also interesting.  With the evolution of the Hedge and Alternative Investment Fund industry, the preponderance of restructurings are now consensual and do not involve ‘changing the locks and closing the doors’.  In these situations the creditors need to understand both value today but also the potential for value recovery over time, often across multiple asset classes.

Often the valuation opinion we are giving are part of a court-approved restructuring (Chapter 11 US / Scheme of Arrangement UK) process and so our work and views is likely to be disclosed in the public domain and subject to significant review and challenge from other parties – or indeed the man in the wig in the courts.  This is where having global standards one can reference and a formal valuation credential can really set one apart from the part-timers and dabblers.

6. What new areas/issues are beginning to challenge the clients you work with and your own teams – e.g. valuation of cryptocurrencies; biological assets; new regulations etc – and why?

There are a number of emerging themes we are seeing in terms of hard to value businesses and assets.  At a macro level, looking at the major global corporates the issue for many is they are having to do more difficult deals in more difficult parts of the world – and often in some sort of Joint Venture or collaboration structure.  Information and transparency in such markets can be challenging as well as taking a view on growth rates in hugely green and inflationary markets.

At a more micro-level technology and in particular disruptive technology is a challenge – be it Artificial Intelligence and Bots replacing humans, the rise of autonomous vehicles, rapidly changing habits as a result of the sharing economy and impact of millennials.  For traditional manufacturers and bricks and mortar operators this poses a real threat and assessing how this may impact on value in the near-term cannot be under-estimated.

Another area of focus would be FinTech – there is a wall of money moving into challenger banks, virtual banks, alternative payment platforms, insurance tech and indeed blockchain and distributed ledger technology which has the potential to really up-end many long established and previously thought to be hugely insulated businesses.  It’s really fascinating when you look at some of the success stories in this space over the past 24 months – and even more difficult to value these ‘unicorns’.

The other area we are focussed on is Data Analytics and Digitisation and how this can help our business in terms of depth of analysis and speed of response.

7. You were recently appointed to a Review Panel of the Financial Reporting Council (FRC) in the UK, what does this role involve and what valuation-focused issues is your panel looking at?

The FRC regulates Auditors, Accountants and Actuaries in the UK and sets Corporate Governance and Stewardship Codes.  They promote transparency and integrity in business aimed at investors and others who rely on company reports, audit and high-quality risk management.

The FRC’s Financial Reporting Review Panel (FRRP) on which I sit is a body of individuals drawn from commerce and the professions who, from time to time, are called on as peers, to join a Review Group to consider issues raised in respect of the Conduct Committee’s reviews of company reports and accounts.  It can be really fascinating with intellectually challenging issues that we are asked to consider and it’s an important part of ensuring the public trust in the work of Auditors.

8. Is the valuation profession well represented on this panel or is this a first?

Traditionally the various FRC panels were staffed predominantly by accountants and lawyers.  Given an increasing focus on fair value matters, a couple of years ago I was approached to join and along with one of my fellow Big-4 Valuation Partners here in London we are the first Panel members from the valuation profession.

9. You sit on the Board of Directors for the Canadian Institute of Chartered Business Valuators (CICBV), which is a key member and sponsor organization of the IVSC. What is the CICBV about and what role is it playing in the future of the valuation profession?

The CICBV has been a leader of the business valuation profession since 1971 through accreditation of the Chartered Business Valuator (CBV) designation. It upholds the highest standards of business valuation through education, accreditation and governance of the CBV, for protection of the public interest.

The CICBV has an accomplished 47 year history of valuation excellence and now has close to 3,000 Members and Registered Students in Canada and around the world. It takes a leadership role in the international valuation community and has been working shoulder-to-shoulder with other VPOs, regulators and standard-setters to help build a truly global valuation profession. It’s really at the forefront of business change and that’s why I’m honoured to be a CICBV Director and be a part of continuing this important work.

10. You hold the Chartered Business Valuator (CBV) credential. What does it mean to be a CBV and to carry the designation with you around the world?

I do, and it’s a designation I’m hugely proud of. Achieving the CBV is a professional accomplishment. The CBV Program is a thorough 2 year curriculum, applied through related professional experience and qualified in a rigorous qualification examination. In the Program, CBV’s are trained to develop analytical skills to provide insight for confident decisions. As a CBV, you are well-known for your analytical acuity and informed judgement to understand the pulse of an organization through valuation analytics and you have authority as a business valuator. In fact, the Canadian Courts recognize CBV’s for their expertise in business valuation and related matters. I think it’s all about providing credible value measurement, value creation and value protection, and that has really been the essence of my career as a valuation professional.

11. What do you believe is the goal of the valuation profession and what does it need to do to achieve it?

To me this is really straight forward.  We want the readers and users of our formal valuation opinions to be able to trust that the person undertaking them is sufficiently trained and has the practical experience and professional judgement to give a robust, supportable and reliable analysis and opinion that users can trust.

12. The CICBV is taking an active role in adoption of IVS and KPMG recently adopted IVS though its Australian practice; what IVS initiatives is the CICBV undertaking and how do you see the wider adoption of IVS taking shape across the valuation landscape?

As a long-time member and sponsor of the IVSC, the CICBV is of course interested in promoting globally recognised standards – that should set a minimum to be met or indeed exceeded.  Alignment of globally divergent standards in a self-regulated profession is always challenging but it is also what central banks, stock exchange and other regulators are currently calling for.  And it’s tough to call something a global profession if there is no baseline as to what qualifies one as a valuer, what training and enforcement procedures are in place and what standards must be applied.

The CICBV is in the process of assessing the most efficient way to adopt IVS which will still allow its members to adhere to the specific requirements under the local Canadian standards.  Whilst there may be a process of alignment it is not felt this will be a significant change – there could be some specific country  situations where divergence from IVS is mandated by law – for example minority oppression cases, stock exchange fairness opinions etc – but the IVS already have provision for local regulations to over-ride in any case.  Indeed with the recent move of many VPOs and regulators in Asia-Pacific now requiring IVS to be specifically adopted it will be important for VPOs in the Americas and EMA to be on the front foot.

At a firm level, as you highlight we have now adopted IVS in Australia for our tangible asset valuations and elsewhere in the world for a number of KPMG’s dispute based valuations, where the relevant legal agreements may be silent on definition of value, process or standards to apply. We are increasingly baking IVS into our engagement letters and finding the instructing lawyers very supportive of this.

In the final analysis it’s hard to see how we will be credible in terms of driving public trust in the profession globally if the sponsoring VPOs don’t actually adopt the IVS which they have been so deeply involved in drafting.


Interview by Richard Stokes

Director of Communications, International Valuation Standards Council (IVSC)

[email protected]

There are more than 170 member organisations
of the IVSC, operating in 137 countries worldwide. Join them.

Become part of a global network working to enhance valuation standards and professionalism.

There are more than 200 member organisations
of the IVSC, operating in 137 countries worldwide. Join them.

Become part of a global network working to enhance valuation standards and professionalism.