Xenia Taliotis 7 Mar 2018 12:25pm

A royal calling

Sir Michael Peat was private secretary to HRH Prince Charles, and later the Duchess of Cornwall. As he receives ICAEW’s Outstanding Achievement Award, he tells Xenia Taliotis about his career in the palace

Caption: Photography: Matthew Joseph

When I was 14, everyone else went out and I was left to have dinner with my grandfather,” says Sir Michael Peat, Commander of the Royal Victorian Order (CVO), Knight Commander (KCVO), Knight Grand Cross (GCVO) and now recipient of ICAEW’s Award for Outstanding Achievement. “For want of conversation, I asked him what an accountant did. After a moment or two, he said an accountant provides integrity. I didn’t dare ask another question and I am afraid that it took me some years to work out what he meant, but he was absolutely right. Trust and confidence are the foundations on which prosperity is built and our profession is key to promoting and safeguarding these vital elements.”

Peat’s grandfather wasn’t talking hypothetically but empirically. A second-generation accountant, he was the fourth son of Sir William Barclay Peat, founder of Peat, Marwick, Mitchell & Co. Three of
Sir William’s sons worked in the firm, as did two of his grandsons, including Peat’s father Sir Gerrard Peat. Peat himself joined in 1972, was made partner in 1985 and left in 1993, having seen the practice merge with Klynveld Main Goerdeler to become KPMG.

Accountancy is clearly in his blood – but given that he says he followed in his forebears’ footsteps because his father expected it rather than of his own volition, it’s possible it takes second place to duty. “I didn’t play an active role in shaping my career until I was 61. Prior to that – and even at Oxford, where I studied law – I responded to expectations and followed life along the paths it took me.”

That may sound a little passive, until you consider how golden those opportunities were: there can’t be many who would veer away from a path that led from Eton to Oxford, to an MBA at INSEAD, to a career in a worldwide accountancy firm, and then on to serve Queen and country as Keeper of the Privy Purse, followed by nine years as private secretary to the Prince of Wales. Might they have been the choices he would have made even without the weight of his family’s influence?

“It’s impossible to say, but perhaps. I’ve certainly always felt enormously fortunate. I have had the best education, and that counts for so much; and I came on to the jobs market when there was plentiful employment. I also hope and believe that I benefited and was shaped, to a considerable degree, by my accountancy training. I have always thought that the big practices are, in many ways, the world’s business schools, providing the people who are at the heart of much of our global economic activity and prosperity.”

Peat did mainly auditing and financial advisory but also consultancy and other assignments for clients, and that combination of skills made him the perfect person to take on a management study of the Royal Household when KPMG was appointed in 1987.

His report ran to more than 1,300 pages and included some 200 recommendations. When it was completed, says Peat, “The client said to me, in summary, ‘if you think so much needs to be done, why don’t you come and do the job yourself?’ So I did, first while still working full-time at KPMG, and then, from 1990, while on secondment from the firm. By the time we got to 1993, the decision was made that I should join the Royal Household on a permanent basis.” He was first director of Finance and Property Services and then became Keeper of the Privy Purse in 1996.

Peat balks at the suggestion that the Royal Household is a business. “No, I wouldn’t say that. In financial and people terms it is a very substantial organisation that needs to be run in a business-like way, but it is not a business. Its purpose is not to make a profit. Its purpose is to support the Queen in fulfilling her duties as head of state.”

He is not one to trumpet his achievements, saying only that the economies he instigated reduced the Royal Household’s net expenditure by around 70% and helped professionalise management. The key to the process was reassuming direct responsibility for functions and expenditure that had been delegated, over centuries, to government departments – a form of privatisation. Responsibility
for managing the Civil List itself and for the buildings and transport were taken on and efficiencies introduced. The building work included the restoration of Windsor Castle after the 1992 fire and, across the estate, probably the largest programme of work for 100 years or more. Buckingham Palace and further parts of Windsor Castle were also opened to the public and the Royal Collection Trust was created to display the works of art.

He was also the author of the arrangements, working with the Treasury and Inland Revenue, whereby the Queen offered to pay income and capital gains tax on a voluntary basis in 1993 – a move that was as much political as it was financial, and which gave the monarchy a boost in public esteem.

Peat always felt that he might go back to business at some stage. “I had it in mind to return to the private sector after I had completed my work for the Queen,” he says; “but then the Prince of Wales kindly asked me to join his staff.”

If his years working for Her Majesty were defined by saving money, then certainly part of his remit as private secretary to Prince Charles was to make money: in his nine years with the Prince, from 2002 to 2011, Charles’s income more than doubled.

Now back in the private sector, he is no less busy. He is chairman of CQS, Sir Michael Hintze’s £11bn asset manager, and holds directorships with Evraz, Deloitte, M&C Saatchi, GEMS Education and Arbuthnot Latham, as well as being a trustee of the Hintze Family Charitable Foundation and of the Saïd Foundation. “I also have another job,” he says, “and that’s farming. It’s a good antidote.”

An outstanding achievement

Sir Michael Peat has received the ICAEW Lifetime Award for Outstanding Achievement in recognition of a career devoted to the promotion of accountancy as a force for good, his services to the Royal Household and, in particular, for his roles in establishing HRH The Prince of Wales’ Accounting for Sustainability and Integrated Reporting projects. These were both created to help the business community and public sector recognise the benefits of considering the environment and wider society in their day-to-day practices.

“HRH had been reading Nicholas Stern’s report on the economics of climate change, which concluded (in very broad terms) that they could be the greatest ever failure of market mechanisms,” says Peat. “He suggested to me that they could also be described as the greatest ever accounting failure, because accountants had failed to price and quantify the irreplaceable public utilities – fresh water, a clean and functioning atmosphere, biodiversity, fish in the sea – that were being consumed and degraded so rapidly. It was a good point, and as a result of HRH’s drive and determination, the Accounting for Sustainability and Integrated Reporting projects came into being.”

Prince Charles was made the first honorary member of ICAEW in recognition of his work and now Peat has been given the Lifetime Achievement Award. “Receiving the Award is a great honour and pleasure because it is recognition by my colleagues,” he says. “I owe a lot to accountancy and the profession. It has been a continuous learning – business nomadic – experience and a wonderful mix of the practical and the intellectual, all in the company of intelligent, stimulating and decent people. I have much to be grateful for.”