AABP Award 728x90

Boardroom bound


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When Kevin Prust broached the idea of retiring a year and a half ago, the economy wasn’t on his short list of concerns.

“One of the top concerns was from my wife,” Prust said with a grin. “She said: ‘You’re not going to be at home all day; you’re going to have an office someplace, right?'”

Prust, managing director of RSM McGladrey Inc.’s Des Moines office, plans to retire on Dec. 31 after more than 30 years with Greater Des Moines’ largest public accounting firm. RSM McGladrey, which provides business advisory services, partners with McGladrey & Pullen LLP, an independent accounting firm that provides audit and tax services.

Prust, who turns 53 next month, said he plans to become active in corporate governance by serving on the boards of for-profit companies.

“That’s something I’ve always had a strong interest in becoming involved with,” said Prust, sipping coffee at his favorite corner booth at the Renaissance Savery Hotel’s coffee shop, where he has started nearly every workday for the past 25 years. (Being an accountant, he usually sticks with the can’t-miss English muffin or the granola, but if he’s “feeling really wild,” he may order the French toast.)

“People have said this is kind of a crappy time to be going on a governance board; I think just the opposite,” Prust said. “There’s not a better time. With the uncertainties we face, governance has never been as important. With my background, I think I fit a lot of organizations pretty well.”

The Minnesota native grew up on a farm just north of the Iowa border, and to his parents’ chagrin left Minnesota to study accounting at Drake University. After graduating, he joined McGladrey’s Mason City office, and three years later transferred to the Des Moines office.

Prust is a member of the American Institute of Certified Public Accountants (AICPA) and the Iowa Society of Certified Public Accountants, and has served on the AICPA’s Committee on Banking, which serves as a liaison between banks, their regulators and the accounting profession. He has also served on McGladrey’s company-wide committees and has presented on a variety of banking and finance topics.

Besides setting up an office somewhere outside his home, Prust said he also plans to continue as chairman of the Transit 2030 Committee and as a member of other nonprofit boards. Those include the Blank Park Zoo Foundation board and Mercy Medical Center’s finance committee. He said any decisions on joining for-profit boards won’t come until next year.

“What I’ve told everybody that is that up to Dec. 31, my focus is still on McGladrey,” he said. “I’m not going to make any decisions until after that period, because it takes some due diligence on both sides to ensure you make the right choices. I have a long history of when I make a decision, I stick with it. I’ve been on the zoo advisory board for 25 years. My farming background says, when you make a commitment, you stick with it.”

Succession plan

Tom Stanberry, chairman and CEO of West Bank, said Prust “is an extraordinarily competent accountant, and more than that, he’s able to sit down and give you excellent business advice.”

Stanberry said he also knows Prust through their involvement with charitable organizations, among them United Way of Central Iowa. “He’s a very well-known and well-liked contributor to the community at large as well as an adviser and auditor,” Stanberry said.

Succeeding Prust as lead partner of the Des Moines office will be Rod Foster, 48, a managing director who has been with the firm since 1983. He has extensive experience working with closely held businesses, and his areas of expertise include the construction industry. He is a member of the Construction Financial Management Association’s Iowa chapter and several professional accounting associations, along with the Greater Des Moines Partnership.

McGladrey has operated a Des Moines office for the past 62 years. During the last 30 years, the office has tripled in size from about 60 people to its current head count of about 180 employees, which swells to more than 200 during tax season. The Des Moines office now has 19 partners and about 65 others in management or supervisory roles.

Prust wouldn’t be the first McGladrey leader to move on to positions with some of the state’s most prominent companies. His predecessor, Jeff Cannon, left the firm about six years ago to join Diamond V Mills Inc. in Cedar Rapids, where he is now senior vice president for planning and business development. Former partners Mike Wheeler and Mike Frazier went on to fill chief financial officer slots at Hy-Vee Inc. and AmerUs Group Co., respectively.

“I noticed very early on that we had a great leadership group,” Foster said, “and coming up through the system, they attracted great clients. Those great clients then allowed them to recruit and retain great employees, which continued to allow you to keep great clients. So this all kind of fed on itself.”

Developing and executing a succession plan has been one of Prust’s top priorities.

“I probably started discussions 18 months ago with our firm’s leadership about what I wanted to do,” he said. “We percolated on that for 12 months, and then announced it to the office. In that time period, we laid out transition plans for both my client responsibilities and my office duties and who should be the heir.” It’s a process that really didn’t happen with his two immediate predecessors, who each received offers from clients that they quickly snapped up, he said.

“The firm was very supportive of what I wanted to do,” Prust added. “It’s not very often that you’re young enough to do a second career after having a successful first career.”

Herding cats

Ira B. McGladrey founded the accounting firm in Cedar Rapids in 1926, and through organic growth and two mergers, McGladrey’s offices by 1987 had expanded coast-to-coast. In 1999, H&R Block Inc. purchased the firm’s non-attest (tax and business consulting) assets and established RSM McGladrey Inc. as an indirect, wholly owned H&R Block subsidiary. McGladrey & Pullen remained a partner-owned and -managed firm offering audit and attest services. Both companies are now based in Bloomington, Minn.

Though McGladrey has traditionally promoted from within, in recent years a tighter supply of accountants has led the firm to recruit more from other CPA practices, Foster said. Several partners in the Des Moines office were recruited from the Big Four national firms, which has led to more work for larger corporations. However, the majority of the firm’s work remains with mid-sized, closely held companies.

Prust said leading the Des Moines office has been “like herding cats,” but in a good way.

“They’re smart cats,” he said. “It’s also kind of the lightning rod for phone calls, issues, opportunities, so you get to be the focal point. It’s one of the great opportunities you can have. Working with professionals, you get very spoiled about the quality, depth and integrity of the people you work with. The culture is very important, and that partner-in-charge role really is kind of that tone at the top; you help set, manage and monitor that culture.”

Developing into a good mentor and manager took time, Prust said.

“When I was a young staff accountant, I probably wasn’t a very good people person because I had high expectations and expected people to have that same ability and desire,” he said. “But I think as you work with clients and mature, your management style and philosophies change. We hire smart people, and you let smart people do the things they’re capable of doing. I’m a big fan of delegation.”

Economic concerns

Prust said he’s concerned about the present turmoil in the financial markets, but it hasn’t deterred him.

“I don’t know if anybody could have totally predicted what’s going on, or if they could have, what they could have done to prevent it,” he said. “Whenever you have excesses, it’s going to take time for the economy to absorb those excesses. Personally, yeah, it’s concerning, but I truly believe that you don’t overreact to anything that occurs, because you’ll generally make dumber decisions by overreacting.”

Generally, the lack of confidence in and uncertainty about the economy seem much more widespread than when the market crashed in the late 1980s, Prust said.

“The message I think we’ve been sending to our clients to give to their employees is that their retirement funds and benefits are there, that (the retirement funds) are still strong, they’ll provide you the benefits you need, and don’t overreact.”

Shedding as much debt as possible is probably good advice for most companies, Foster said.

“I think being less leveraged is the one ultimate goal most of these mid-market companies probably have at the moment,” he said. “They’re either going to be asked by their lender to become less leveraged, and even if they’re not, with a lot of uncertainty out there, it’s just wise to become less leveraged. Everybody’s situation is unique, but one thing’s probably very common: Less leverage now would be better than more leverage.”

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