This week on the podcast Matt sits down with Barbara Marchini-Ellis, Partner at EY. They begin the episode with Barbara discussing her journey through the accounting field, from her diverse background in Silicon Valley to leading EY’s work with Walmart in Northwest Arkansas. Barbara then walks through how the accounting industry has changed during her 35 years of experience, touching on the importance of business ethics and integrity. The conversation concludes with Matt asking Barbara what has kept her at EY for the entirety of her career and Barbara’s work with the Endeavor Board in Northwest Arkansas.
Episode Transcript
Barbara Marchini-Ellis 0:01
I'd say the progression I've seen is a lot of times it was entrepreneurs coming here
to work with the big retailers and CPGs and trucking companies and now it's more companies
wanting to headquarter and form their home here in Northwest Arkansas.
Matt Waller 0:16
Excellence, professionalism, innovation and collegiality. These are the values the
Sam M. Walton College of Business explores in education, business, and the lives of
people we meet every day, I'm Matt Waller, Dean of the Walton College and welcome
to the Be Epic Podcast. I have with me today, Barbara Marchini-Ellis, who's a Partner
at EY. And she has been there for 35 years. Most of her career was in San Francisco
and Silicon Valley. And now she's been in Rogers since 2018. Thank you so much for
joining me today, Barbara.
Barbara Marchini-Ellis 0:56
Thank you for inviting me.
Matt Waller 0:59
And thank you for your involvement with our board and our accounting department. I
appreciate that. So Barbara, you have a lot of experience with EY obviously. And now
you're a partner. How long ago did you become partner?
Barbara Marchini-Ellis 1:15
I've been a partner for actually close to 25 years. So the majority of my career with
EY has been in the role of partner.
Matt Waller 1:26
And you have a lot of experience with global type multinational clients. And you have
lots of experience, I think, probably in part to your being in Silicon Valley with
the technology industry and internet advertising, IT services, software and others.
And now you're in Northwest Arkansas, dealing with retail and omnichannel retail.
How was that transition for you from a from a work type perspective?
Barbara Marchini-Ellis 2:00
Yeah, you know, it's been a really interesting journey. I mean, you know, obviously,
when we think about Silicon Valley, we think about tech, and I often tell new recruits
that a lot of the companies who are our core clients now didn't exist when I graduated
from college, right, you think of the Oracles and the Googles. And, and many of those
companies, they didn't exist back in the 80s, when, you know, when I started in the
profession, so actually, when I started with EY, I did start in consumer products,
I worked with companies like Del Monte Foods, I worked with some wineries. And then
I had kind of some multidisciplinary, you know, financial service conglomerates that
were clients, so I'd always kind of gotten experience working with bigger companies.
And then as the demographic of the Bay Area, and Silicon Valley changed, I started
working more in tech. So everything from technology hardware, like a Hewlett Packard,
and then you know, higher end networking equipment and and, you know, eventually into
internet advertising with companies like Google and Facebook, and so built a pretty,
you know, diverse background. And, and so the opportunity came up to lead our work
with Walmart, and with really the changing profile of the company there and all their
varied interests, sort of that history that I had had of, you know, everything from
consumer products to tech was was was very, very interesting. So that's what brought
me to Rogers, four or five years ago.
Matt Waller 3:33
You you've been in accounting, your career during your career and accounting has changed
accounting firms have changed. What are some of the big changes you've seen over your
career?
Barbara Marchini-Ellis 3:48
Yeah, you know, you mentioned the firms have changed when I started, there were eight,
eight major multinational firms.
Matt Waller 3:55
I still want to say the big eight.
Barbara Marchini-Ellis 3:57
Yeah. So do I some days. You know, now we're, we're at four multinational firms. I
think that clearly, when I started in the industry, we were not a regulated industry.
Currently, we are a regulated industry. And, you know, I think, for everyone who's
been through that journey, that that does make some changes. I mean, our general our,
our oversight by a regulator certainly has, you know, increased quality of the of
the industry in the profession and that's, that's always a good thing. You know, I
think clients have become more sophisticated. I mean, when you think about when I
started auditing, you had ERP systems, but nothing like what you have today, right?
And and, you know, we I always tell people I could never be a staff accountant today
because, you know, we wrote everything out by hand clients would hand us binders of
information to evidence transactions. And now, you know, we audit in a much, much
different way. And it's not only how we memorialize what we do being, you know, electronic
versus manual, but it's also just the way that we approach the way we audit, we, you
know, we take data sets out of ERPs. And, and look at how data is moving through systems,
and then also look at, you know, evidence of real information to get comfort, right,
that what's moving through these systems is, is based in reality and real transactions
our clients are entering into, but it's a much different, a much different way of
auditing than when I started. And then the profession in general, you know, has also
moved from opining just on financial statements to also opining on internal control.
And so that's certainly brought another big change to the profession since, you know,
since I started 30 plus years ago,
Matt Waller 6:05
So, you know, there's all of these industries are changing, you know, if you look
at retail, for example, retail is changing dramatically, especially with omni channel,
people are able to go in the store order in the store, get pickup, get delivery, get
delivery in home, delivery through drones, just so many different, retails become
very complicated. For the the retailers, the number of suppliers, they have to have
has gone up dramatically, especially for dot com type stuff. And all of that is really
driven by technology on the one hand and, and competition on the other. But how do
you see accounting and auditing changing over the next decade or so?
Barbara Marchini-Ellis 7:06
You know, think there's going to be a continuation of what of what we've currently
seen, in terms of, you know, moving more into a digital way of auditing and, and looking
more at reliance upon systems, trends in the data and looking at full data sets. Versus
a lot of times, you know, traditional auditing was focused more on testing through
sampling, right. So you have millions and billions of dollars of revenue, and you
pick samples of hundreds of transactions that are deemed to be statistically valid
samples. And you draw conclusions that way. Now, right, we take entirety of datasets,
and can look for the anomalies, and test to make sure that we understand the process
about how all of these transactions make it into the system. So it's, it's a very
different, different way of doing that. And I think we're really just at the forefront
of that as a profession in terms of deploying those types of procedures, and where,
you know, how it can fundamentally change our audits. And it's, you know, it's an
exciting thing for our people, because it gives them the bigger picture more quickly,
in terms of how, how companies operate, and, and how we can, you know, draw conclusions,
really, with, hopefully higher levels of assurance and higher levels of certainty
than we're able to, you know, today, the way our audits are designed.
Matt Waller 8:46
You know, one thing that we started. So when I became Dean eight years ago, I went
around and talked to a lot of our alumni. I would say 100 most successful alumni all
over the world, and asked them a couple of questions in different ways. One was, what
could we do as a college that would make you more proud to be an alum? And what do
I not know that if I knew would help me manage better and lead better as Dean. I said
it in different ways, but those were the two things I was trying to get at. And one
thing wasn't necessarily number one, but it was up there and it was frequent. And,
you know, some of these alumni went through our undergrad program somewhat through
our masters, one of our master's programs, some went through both. But something that
came up a lot was business ethics. And they basically said, you know, we think you
could do more on business ethics. You know, with academic institutions changing curriculum
is very complicated. It's done through the faculty. It's not top down, and it can't
be. It just doesn't work that way. But faculty are aware of what they're doing and
what their their specific areas are. And they naturally update things. I met the Chief
Ethics Officer of Walmart, she had been Chief Ethics Officer for like 20 years at
Walmart, Cindy Moehring, you may know her I don't know. So when she retired, she came
on board, and began, she founded and started leading the Business Integrity Leadership
Initiative. But when she did it, she found out that only about 15% of our students
were getting any substantive education in business ethics. And so she, she really,
she did a good job of working with faculty to change the curriculum. And now 100%
get it. But one of the things that we've done is we have a lot of guests come and
speak to our college and meet with us. And we created badges, achievement badges for
learning certain things in business ethics. So recently, we had the whistleblower
for Theranos, Erika Cheung came in, and she spoke to us but she also like, our leadership
team had lunch with her and we had different, she had several meetings with us over
the time she was here. This doesn't have anything to do with accounting, per se, but
but then we also had the whistleblower for Enron come in, as well. And, of course,
we're off. I mean, these are big time scandals you know that I, I mentioned, but there's
lots of them that occur. But I remember when I was talking to when we were talking
to the whistleblower for Enron, you know, she said, she didn't think she was uncovering
something real big. It was more, she was thinking, there's a problem here. And it
needs to be addressed. And of course, eventually, she was asked to talk to the CEO
about it. And she thought that's kind of strange. But, but in many cases, these people
that blow the whistle are accountants, not always like Erika Cheung was a scientist.
But many times they don't know they've uncovered something so big. And they're always
surprised that how many people have gone along with everything up to that point.th
Barbara Marchini-Ellis 12:29
Yeah. Yeah.
Matt Waller 12:31
Do you have any advice for us as a college, around things that you think are worth
looking into, you know, from a business integrity, ethics perspective, and furthering?
Barbara Marchini-Ellis 12:44
You know, I think, to your point, business ethics is sort of the foundation of everything,
you know, when when we look at working with companies and accepting clients, one of
the first things we do is, is background checks, both on the company and on the key
executives of the company, and, and selecting clients that we believe are ethical
and trustworthy and forthright and motivated to do the right thing. Are is sort of
the foundation of, you know, how, how we we built a practice and decide who, you know,
who we want to be associated with. But to your point, you know, a lot of people as
as these things come to light, a lot of times it is a history, right? It's a history,
it's a culture, it's been there, and those types of things can change on the margin
very slightly to where it just becomes, you know, feels normal. Right, and that, that
becomes challenging. And so, you know, I think a lot of it is making sure that in
every, in each and every one of us, whether you're on the service provider side or
the client side, right, you you just have that strength and moral fortitude to keep
your you know, your moral compass where it where it needs to be and to ask questions,
and when something just doesn't, doesn't feel right, or you don't understand it. I
think, you know, a lot of it from you know, and the public accounting profession isn't
isn't immune to those matters, either. Right? We've had our own challenges and from
time to time, their behaviors in the organization, including EY that, you know, are
other than what we aspire to, and you have to deal with those and recognize those
and a lot of it becomes a big culture shift, right? There's, there's consequences
for individuals, but then, you know, you have to kind of step back and say, Is this
part of our culture and what do we want and need our culture to be? So I think a lot
of it is is just each and every individual, like I said, really having the strength
and the conviction that if it doesn't seem right, or it doesn't feel right, you know,
you need, you can't audit, you know, you shouldn't automatically assume there's something
malicious going on. But you just have to raise your hand and ask questions. You know.
So Barbara, you have elected to be in the profession, your entire career. And you've been with EY for 35 years. So, two questions. What is it that's kept you in the profession this long? And two, what is it that's kept you with firm so long?
Yeah, it's a great question. Given our, what we do in our profession, and having sort of annual cycles, that that, that that that come to a close each year, there's a natural opportunity for reflection. And in asking yourself, how have I grown this year? Is this a career I want to continue to invest in? And I'll have to say that, you know, in public accounting, and with Ernst and Young specifically, I've felt that each year I've grown, I've pushed myself, you know, beyond my comfort zone, and I'm doing things that I would not have thought possible even a year or two, prior, you know, and that continues, frankly, continues today, you know, 35 years into my career. So it's, it's really been the growth opportunities that come with the profession, the ability to, and that comes to being able to see different companies being able to talk to different different people at different companies and in your younger years, right? It's, you're you're working with, with control younger folks within within your clients. But then as you progress, right, you're starting to work with more senior executives. So over the years learning perspectives from from the CFOs, and CEOs, at at the clients I've worked with has just been very, very valuable. And I think what's also been rewarding is when you kind of pivot from, hey, you're the auditor to, when you walk into the office of an executive later in your career, and they're really looking to you for counsel and advice, right, you become a trusted adviser to them. That is hugely, hugely rewarding. As I've entered into the the later stages of my career, it's also been taking that out into the public. So I've had the opportunity recently to to join some boards, you know, board here in Northwest Arkansas that I'm on is in, you know, the Endeavor board. So working with early stage entrepreneurs. And again, that ability to kind of give back to early stage entrepreneurs, based on the experiences gained with a variety of companies has been huge. So for me, it's really been just continuous growth. And I see that, you know, continuing through the remaining years, of my my career as well.
Matt Waller 18:15
Well, you know, serving on Endeavors board, helping entrepreneurs, you're a perfect
fit for that, because of your experience in Silicon Valley, I would think. Endeavor,
here in Northwest Arkansas, it's a global organization. But there is an office here,
for those listening that don't know about it. They really look for what they call
high impact entrepreneurs, people who are dreaming big, they want to scale faster.
They've got good leaders in place. And they but endeavor is, is doing really well
here. And I think, you know, globally, they've they've had a huge impact. They've
had lots of early stage founders that wound up with unicorns, inside and outside of
the US. So how long have you been working with Endeavor?
Barbara Marchini-Ellis 19:16
I've been on the board now three years. And working with Canem and the rest of the
board there. It's been a great experience.
Matt Waller 19:23
Do you think your your connections and just experience in Silicon Valley, do you see
things that we're missing here a bit that we need in Northwest Arkansas? Or are you
able to kind of fill in the gaps for some of these early stage companies?
Barbara Marchini-Ellis 19:39
You know, I think it's been interesting for me to watch over the last three, four
years, how the the maturity profile of the companies that we work with in endeavor
has changed, you know, initially, you know, maybe the business models weren't as broad
the level of tractions that companies had were not as extensive But over time, I think
because of much of the mentoring that a lot of the entrepreneurial support groups
to Northwest Arkansas have attracted here a lot of the mentoring they've been able
to provide. It's been huge, right? Whether it's executives like Marc Lore, who maybe
would have never thought about Northwest Arkansas, right, had it had it not been for
Jet being acquired by Walmart, or, you know, various other resources being attracted
to the middle of the country. There's greater awareness of Northwest Arkansas, and
all and more resources coming here to provide that mentoring and support that I think
continue to help mature the entrepreneurial ecosystem. I mean, I think the other the
other angle to it is that the capital needs to follow. You know, we we we have, you
know, some of our our venture capital folks that have visited here in Northwest Arkansas
and some of the conferences and so forth over the last few years. And I think whether
it's corporate VC funds, contributing more or attracting other sources of funding
to the middle of the country, that's we're seeing more of it than we did when I first
came here in 2018. But I think that's, that's sort of the next step. You know, I'd
say the progression I've seen is a lot of times as entrepreneurs coming here to work
with the big retailers and CPGs and trucking companies, and now it's more companies
wanting to headquarter and form their home here in Northwest Arkansas. So I think,
you know, bringing in that support, mentoring and financial, is really going to be
the foundation of, of growing the entrepreneurial community here.
Matt Waller 21:44
Well, Barbara, I'm glad you're here in Northwest Arkansas, and all you're doing and
thank you for hiring our students and for engaging with our college really appreciate
that. It was pleasure visiting with you and thank you so much.
Barbara Marchini-Ellis 21:58
Yep, thank you.
Matt Waller 22:01
On behalf of the Sam M. Walton College of Business, I want to thank everyone for spending
time with us for another engaging conversation. You can subscribe by going to your
favorite podcast service and searching Be Epic. B E E P I C
Matthew A. Waller is dean emeritus of the Sam M. Walton College of Business and professor of supply
chain management. His work as a professor, researcher, and consultant is synergistic,
blending academic research with practical insights from industry experience. This
continuous cycle of learning and application makes his work more effective, relevant,
and impactful.His goals include contributing to academia through high-quality research and publications,
cultivating the next generation of professionals through excellent teaching, and creating
value for the organizations he consults by optimizing their strategy and investments.
