INTERVIEW NEW MAN AT THE business had two second-hand buses. Souter had spotted a gap in the market WHEEL in Scotland, and the market was about Despite struggling with maths, he became to be transformed by the privatisation of local bus services across the UK. a CA and founder of an international Stagecoach was among the leaders in transport business. ICAS president-elect taking advantage of this shake-up, and grew at a rapid pace, both organically Sir Brian Souter speaks to Robert Outram and through acquisition, In 1993 Stagecoach, then valued at £134m, was floated on the London Stock IR BRIAN Souter’s story reasonably quickly … the management Exchange. In the 1990s privatisation is probably one of the best of money always interested me.” extended to rail services and Stagecoach S known in Scottish business Without maths O-Level, he was entered this market too, acquiring today. The son of a bus unable to take a university degree so South West Trains, the UK’s biggest rail driver, he paid his way through college studied for a diploma in commerce at the franchise. Stagecoach now also operates working shifts as a bus conductor and then Dundee College of Technology (now South Western and East Midlands started his own business, Stagecoach, Abertay University ). It was intended to Trains, has a 49 per cent stake in Virgin with two second-hand vehicles in 1980. lead to a career in teaching, but that did Rail’s West Coast route and a 90 per Stagecoach now operates more than not appeal and Souter was able to use the cent stake in Virgin East Coast. In 2003, 13,000 business, coaches, trains and diploma to transfer to the second year of Stagecoach launched budget inter-city trams in the UK and North America. an accounting and commerce degree at coach service megabus.com. In the UK it serves around two million the University of Strathclyde. Stagecoach’s expansion was passengers every day. Its turnover for That was the route to the career not limited to the home market. the year to April 2016 was £3.87bn and Souter had decided was for him: Internationally, the business acquired pre-tax profit was £104m. accountancy. He trained at the Glasgow operations in Australia, New Zealand This month, Souter succeeds office of Arthur Andersen, a firm and Hong Kong. The company also Ken McHattie as president of ICAS. prepared to take a chance on a candidate bought Coach USA, the biggest operator Never the typical CA, Souter does with an unconventional background. As in the United States and a major player however acknowledge the role that his Souter explains: “Arthur Andersen was in Canada. The acquisition proved to professional training had in his career. a meritocracy. They took a wide range of be a troubled one – Coach USA had a As he puts it: “The key thing for my students in, many of whom had shown number of problems and ultimately, own ‘success’ … was taking the skill set exceptional academic performance, but much of it had to be sold off. Souter, who that I got from being a CA, and matching they also had the good sense to work had become executive chairman by this it with the passion I had about transport. out that sometimes there were people stage, returned to the chief executive “It was especially useful when that who weren’t, perhaps, academic giants, role in 2000 to turn the situation round. accounting skill was very relevant and but had had to drive very hard to get to The elements of Coach USA still in important. It was good to be able to do where they were.” Stagecoach’s hands generate more profit that work myself and not have to pay What the firm didn’t know was that than the whole of the subsidiary did at someone else to do it. And to understand their CA student had not given up being the outset, the company says. the interpretation of the numbers... a bus conductor, and was still working Looking at the business today, these skills were really, really useful.” shifts at the weekend. He was eventually Souter says: “Stagecoach has got some It might seem odd that Souter forced to admit his double life when he interesting opportunities. There are struggled with mathematics at school turned up to the office with a battered a number of rail franchises up for and did not even get an O-Level in the and bruised face, after being attacked by renewal. We just did a deal with a subject, despite being fundamentally a drunken passenger on a late-night bus. company in Europe to sell our European numerate. He describes it as a “mental In 1980, funded by with his father’s Megabus operations but we still find block” and explains: “If you put x and redundancy money, Souter set up there are opportunities and challenges, y in an equation I just didn’t get it. But Stagecoach with his sister, Ann Gloag, in Europe, and with digital.” if you put pounds into it I could get it and brother-in-law Robin Gloag. The In 2012 he stepped down from the 20 / CA MAGAZINE / ICAS.COM / APRIL 2017 “What the ICAS Foundation is doing is really important. They’re dropping ladders down to people who are socially excluded, to follow a career in accountancy” 20 / CA MAGAZINE / ICAS.COM / APRIL 2017 BRIAN SOUTER CURRICULUM VITAE 1970s Trains as a CA with Arthur Andersen, Glasgow 1980 Co-founds Stagecoach with his sister Ann Gloag and brother-in-law Robin Gloag 1984 Joins ICAS 1992 Souter Charitable Trust is set up 1993 Stagecoach lists on the London Stock Exchange 1998 Souter moves from chief executive to executive chairman 2000 Returns to chief chief executive’s role, to become non- His beliefs have proved controversial a train-themed fundraising event for executive role executive chairman. He is still very on occasion. A leading political donor (to the ICAS Foundation, which supports much involved with the business, but the SNP), he also helped fund a privately young people from disadvantaged 2012 Becomes organised referendum in Scotland as backgrounds who are looking to make a stresses: “At Stagecoach we have a great non-executive team and that team continues to do a lot part of a campaign to try to persuade career in finance. chairman, of innovative and interesting things. We the Scottish Government not to scrap Souter says: “I’m passionate about Stagecoach are still at the forefront of our industry.” Section 28, the legislation that barred enterprise, and it’s also important to me The current chief executive and local authorities from “intentionally to live in a compassionate society. One EDUCATION finance director, Martin Griffiths and promoting homosexuality”. of the reasons I agreed to take on this Commerce Ross Paterson, are both CAs and, like Souter says his views on a range of role was that it’s really important what diploma, Dundee College of Souter, started out at Arthur Andersen. topics are “well known and understood”, the ICAS Foundation is doing. They’re Technology; Another focus is Souter Investments, but makes it clear that as ICAS president dropping ladders down to people who degree in the family fund that now accounts he will be expressing the ICAS position are socially excluded, to follow a career accountancy for the greater part of Brian Souter’s on issues that ICAS has an interest in. in accountancy.” and economics, net wealth and through which he has He continues: “ICAS gave me a great Souter also believes that ICAS has University of invested in more than 200 businesses. training and I want to put something a role in helping to rebuild trust in Strathclyde. One of the most significant of these is back … it was very much part of my business. He says: “There is a scepticism Awards and honours include: bus and coach maker Alexander Dennis, story. I couldn’t have done what I did in the world just now … I don’t think that honorary degree, which Souter Investments acquired as without that training and the benefits I ICAS is tarnished, I think it has a great University of a turnaround investment and is now got from it,” adding that the key themes standing, as the oldest professional body Strathclyde thriving, with more than £600m in of his presidential year are “enterprise, in the world. We need to be part of the (1997); Scottish sales to the UK and overseas markets compassion and inspiration”. renewal of integrity. We need to be part Entrepreneur including Hong Kong, China, Malaysia, A major event this year will put young of the solution to this challenge. ‘Seeking Award (1998); Ernst & Young North America and New Zealand. CAs in touch with figures from the the truth’ is where we should always be.” UK Master Outside business, Souter’s Christian business world, including a planned live “I know I am going to have a Entrepreneur of faith and personal beliefs are an link and address from Virgin founder busy year,” he concludes. “But I like the Year (2010); important part of his life. The Souter Sir Richard Branson. There will also be being busy.” knighted for Charitable Trust, set up in 1992, runs as services to a grant-making body assisting a range transport and of organisations in Scotland and further the voluntary “ICAS gave me a great training and I sector (2011) afield, working on issues from child poverty to the fight against malaria. In want to put something back … it was FAMILY 2011 he was awarded a knighthood in very much part of my story.