Practice Profile: Proof of responsibility

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As with all businesses, accounting firms are striving to be more socially responsible, though the logistics of achieving that can daunting, not to mention nebulous.

Pleasanton, California-based CPA firm Sensiba San Filippo follows many of the best practices popular in the profession — philanthropic activities, environmentally friendly offices — but, unlike most, the firm is now more formally recognized for these efforts, becoming the first accounting firm in California to attain B Corp certification. The achievement is more technical and not as well known as the more typical recognition in the profession, such as “Best Places to Work” lists.

In fact, Sensiba San Filippo managing partner John Sensiba only became aware of the designation when meeting with companies outside of the profession.

The Bay Area firm has many venture capital and technology industry clients, and when attending a meeting with some of Silicon Valley’s biggest companies, the certification was mentioned. As Sensiba came to learn, it is a private certification issued by global nonprofit organization B Lab to companies that achieve a minimum score in an online assessment of social and environmental performance. As part of the certification, a candidate company integrates B Lab-mandated commitments to stakeholders into its governing documents and pays annual fees. As of August 2018, 2,619 companies in 150 industries were B Corp-certified, according to B Lab.

“For us, [the certification] is a beginning rather than an end,” Sensiba explained. “It took six months to get through the process, to go through B Lab, do the testing and fill out the questionnaire. It was time-intensive for operations, finance, marketing … We got through it, got the certification, and are now living up to the B Corp standard. It has a significant impact on how you do business, though we found we didn’t have to change very much. It’s an opportunity to be better stewards of the resources we’ve been given — not connected to the bottom line, but to the impact in our community.”

Sustainable success

Community involvement has long been part of Sensiba San Filippo’s culture, which Sensiba described as family-first, then community-focused, and finally, focused on the firm.

“That’s, oddly enough, strange for a professional services firm, [where you] spend the majority of your waking hours and adult life with the firm,” Sensiba said. “Families and community are important to us; we think of the impact on families — and every individual has a different definition of family. Same with the community, [whether] it’s with a church, the homeless of San Francisco … In the decision-making process, those two are priorities before considering the third. That’s consistent with the B Corp certification.”

While Sensiba San Filippo found B Corp standards aligned with its values, there were a few areas where the certification process brought new awareness.

One of those was the firm’s supply chain, which Sensiba acknowledged is usually not as scrutinized in a CPA firm because of its relative simplicity. The firm was generally cognizant of the supplies and products brought in, with a focus on sustainability, but, Sensiba said, “hadn’t paid attention to the distance the supplies traveled.” Now, the firm is more proactive in “buying from local vendors and manufacturers, and paying attention to vendors in a more deliberate way; supporting diversity in vendors … being more deliberate about our supply chain.”

The most recent example of this was a redesign of the firm’s official notebooks, now made of 100-percent recycled material, with a sewn binding so they can be easily shredded after use, and featuring photos of firm employees participating in charitable activities.

For Sensiba San Filippo, B Corp certification was a natural next step at a time when consumers, clients and employees all expect a certain level of social stewardship.

“There was a tipping point — you can now do it without putting a huge budget in for sustainability,” Sensiba said, observing that without this baseline commitment, “people wouldn’t work for you. It’s becoming a business imperative.”

The best and brightest

The market to hire accounting professionals is already competitive, but especially in regions like the Bay Area.

The B Corp certification alone might not sell younger, more socially conscious employees on Sensiba San Filippo, but Sensiba believes the firm’s continued work to earn it does.

“We have great young people,” he reported. “You see how much smarter the younger generation are; more socially aware, more outside themselves. We encourage that, to be more involved in our communities.”

This approach will help foster the next generation within the firm, said Monic Ramirez, the firm’s tax partner-in-charge: “I don’t think we have been as good, as a profession, in helping the next generation see the opportunities, and values, of being partner in a CPA firm. The new generation places different values on things they find important: social justice, the environment, wanting to be very impactful.”

The accounting profession has indeed faced recent challenges in attracting and retaining young people. Meanwhile, major technological and business disruptions to the profession, often viewed as challenges to overcome, could prove enticing for this sought-after demographic.

This is especially evident in the audit and advisory space, said Frank Balestreri, Sensiba San Filippo’s consulting partner-in-charge, who has a background in audit.

“We all see the light that’s coming at the end of the tunnel here,” he said. “Audit is going to continue to change significantly with the advent of more machine learning and AI … I think right now, in a lot of larger firms, younger people are relatively frustrated with their experiences in the first several years. So much of what they’re doing now is control testing, which is not what they went to school for. Once AI catches up, that changes — they will be much more computer-savvy going forward. We see that with a lot of kids on campus already — their knowledge is far greater than ours.”

“The traditional practice of tax and audit, will it be gone in five years? Ten years?” Sensiba mused. “It will change significantly. As a leader of a traditional CPA firm, I look at five to 10 years, a complete metamorphosis of the market. To adapt to serve the new market, the market demands — that’s a fun part to figure out.”

In his leadership role, assumed three years ago, Balestreri has helped shape the firm’s consulting practice into one that offers outsourced accounting and CFO services, with an internal audit function, supported by Sage Intacct’s cloud financial management solutions and BlackLine’s cloud-based accounting software. The practice has grown 35 percent every year, and Balestreri expects that to go up as these software solutions, introduced over the last year, register an even bigger impact.

He also expects these newer functions to better serve new hires.

“Kids on campus, they work a couple years, and they are not necessarily wanting a career for 20-something years in public accounting,” Balestreri said. “I’ve seen people take time off … People come through the internship program for a couple of weeks, months, and decide after four years of school that accounting is not what they want to do. They’re not their parents — they don’t want to do the same thing every year.”

Sensiba San Filippo’s professional development strategies include mentorship and exposure to new learning opportunities, according to Ramirez.

“People are pushed to the next level maybe earlier than they’d like,” she explained. “Sometimes being a manager is lonely; you don’t feel like anyone is in the same position. Bringing together a manager group is one of my goals, and a path forward for up-and-coming leaders … as much as possible, partners not going to meetings alone, but [finding] learning opportunities [for staff members] in everything we do day-to-day.”

The firm also follows a balanced-scorecard compensation model, adopted a decade ago, which Sensiba credits with improving professional development and client service.

“It’s not objective metrics, not related to size of book or chartable hours, but subjective metrics about behaviors,” Sensiba explained. “If you’re good at sales, and I’m not, it’s more heavily weighted to sales, and for me, excellent client service. It allows people to make sure each individual a client associates with is right for the client — to know which partner better serves you. Because if it’s [the compensation model] ‘eat what you kill,’ guess what? I’m your guy! Getting rid of that is best for clients, and it’s changed the culture in a positive way.”

The firm’s culture, with an emphasis on community, will remain an integral part of its business — a holistic approach Sensiba recommends for other firms seeking to improve their social stewardship.

“I would say to engage champions early on,” he suggested. “Understand it’s not a box to be checked but a way of doing business. Be prepared to take it seriously and understand it’s a career-long commitment. There are a lot of things to consider. [The certification] took us a fair amount of time to slog through it. But once you make the commitment, build it into being part of what you do.”

At a glance

Firm Sensiba San Filippo

Headquarters Pleasanton, California

Managing partner John Sensiba

No. of partners/staff 20/185

Year founded 1977

Services Audit & assurance; tax planning & compliance; consulting; risk assurance services; wealth management

Industry specialties Agribusiness; estate & trust; manufacturing & distribution; real estate & construction; technology; venture capital

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