Based in more than 140 countries, Ernst & Young is well-placed to see the effects of globalization on the world. A world that is increasingly fast-paced and connected by people, commerce and innovation moving across borders at an increasing rate and in changing patterns.

As the world becomes increasingly connected, our clients look to us, as the most globally integrated organization in our profession, to create advantage for them through our global reach and capabilities. Our strength lies in our ability to combine deep local knowledge with our global experience in serving multinational clients and large accounts.

Over the past few years, we have worked with the Economist Intelligence Unit to measure and evaluate the impact of globalization and publish the results in an annual index launched at the World Economic Forum Annual Meeting. Our index shows that the world’s 60 largest economies are continuing to globalize, driven by continued global economic recovery, deepening relationships between governments and global businesses, and the rise of the emerging markets. It’s a trend that shows no sign of abating.

The world is not only shrinking but also shifting. Over the past few years, we’ve witnessed major changes in terms of relative economic power. It’s estimated that emerging markets will contribute around half the world’s output in 2011. This impressive economic growth trajectory is translating into political power. Six emerging markets have reached a trillion dollars of annual GDP (the four BRICs, Mexico and Korea, and two are poised to do so (Indonesia and Turkey). All eight are members of the G-20, the world’s premier forum for global governance.

We’ve invested around US$1.5b over the past five years, much of it earmarked for emerging markets, and, as a result, have seen high growth in markets such as Brazil, China, Africa and India. Our success in emerging markets is, in part, because our presence is long standing and we’ve evolved with these markets as they have grown. Taking Brazil as an example, we opened our first office there in 1959, and in 2011 we merged with Terco (at the time Brazil’s fifth-largest auditing and consulting firm). That kind of merger brings together the best of both worlds – combining our global reach with Terco’s strong presence in the middle market. Our global reach and integrated approach has bought real benefit to our clients in emerging markets – helping our international clients expand into emerging markets and our emerging market clients expand internationally.

Our clients today operate across the interconnected global economy. We help them cut through complexity though our streamlined global structure and our clear focus on our core services and our people. It requires an inclusive approach, and we are equipping our people with the skills and global perspective needed to lead across borders. This allows us to provide our services consistently around the world. We are focused on providing assurance and aligned services that truly fit together – in our eyes, in the eyes of our clients and in the eyes of our regulators. We are also focused on our people: on building strong networks with our current, past and future employees and on empowering them through a broad range of career opportunities across our global organization. This ensures we have the best people to provide our clients the best service wherever they do business.

Our global mindset, structure and actions

We are the most globally integrated professional services organization in our mindset, structure and actions. Our people share a global mindset that has helped us shift from a country-focused organization to a more integrated one across the world. This global mindset can be seen in the success of our cross-border and cross-cultural client engagement teams. Developing this global mindset is partly about recruiting the right people, but we also encourage it through international assignments among our member firms and through our focus on inclusive leadership behaviors – the ability to leverage the inherent strengths and individual talents of everyone on a team for better business outcomes. Across the world, the diverse range of backgrounds and cultures of our people has helped us serve clients by combining deep local knowledge with global reach.

Our highly integrated organization creates opportunities for our people to work with a diverse range of clients and teams and to enrich their careers through international assignments and cross-border mobility programs. This kind of experience is increasingly valued and even expected as people build their careers.

Our global structure is unique in our profession. We have one strong global leadership team that sets one single global strategy and agenda, and our business units are grouped into four geographic Areas across the Americas; EMEIA (Europe, the Middle East, India and Africa); Asia-Pacific; and Japan. Each business unit’s leadership team works directly with their Area and global leaders to ensure flawless execution.

This structure is streamlined and means we can act faster than our competitors. We can access the right people and assemble broader, more experienced teams, wherever the client is based, to deliver seamless service worldwide. We can consistently negotiate everywhere, execute everywhere and mobilize resources everywhere. We can invest on a global basis, also. With 152,000 inclusive leaders acting globally we deliver better, more consistent quality.

Our global quality standards

Our integrated approach strengthens our ability to set the bar high for service quality through globally consistent policies and practices. We have a range of global tools and processes that support our people in evaluating, accepting and serving the right clients with the right services. These tools include our Global Tool for client Acceptance and Continuance (GTAC) and our Service Offering Reference Tool (SORT), which allows people to assess quickly which services can be delivered to our audit and non-audit clients.

The UK Audit Firm Governance Code, which came into effect in 2010 and applies to our UK business, stipulated bringing in Independent Non Executives (INEs). We decided to also implement this requirement at a global level, naming the INEs to our Global Advisory Council, our main global oversight body. This was part of our commitment to achieving the highest quality standards, worldwide.

Through the year we appointed five INEs: Sir Richard Lambert, former Director-General of the Confederation of British Industry and former editor of the Financial Times; Mark W. Olson, Co-Chairman of Treliant Risk Advisors LLC and former Chairman of the US Public Company Accounting Oversight Board (PCAOB); Klaus Mangold, former member of the Board of Directors and former CEO of DaimlerChrysler Services AG in Germany, and Vice Chairman of Rothschild Europe; Shyamala Gopinath, former Deputy Governor of the Reserve Bank of India; and Lim Hwee Hua, former Singapore Minister in the Prime Minister’s Office, Second Minister for Finance and Managing Director at Temasek.

Across the world, our member firms are complying with the requirement of the EU 8th Directive that statutory auditors of EU public interest entities publish an annual transparency report. As strong advocates of transparency, we have extended this by publishing a global report that provides an overview of our global governance and quality standards.

Shared services

Over the past couple of years, we have globalized the support functions shared by our four geographic Areas. Our shared global services support our client teams and global integration efforts by helping to build a global mindset and underpinning our global structure. At the same time, we are creating savings by reducing duplication and creating efficiencies of scale. Globalizing shared functions like IT and procurement increases effectiveness by improving service consistency and also enables us to make significant enterprise-wide investment. There are currently five Global Shared Services (GSS) centers around the world – three in India, one in China and one in Poland. A center in Buenos Aires is set to open in 2012.

Our GSS centers play a vital role in our global integration efforts. The centers have been providing consistent and seamless service to Ernst & Young client service teams and internal clients around the world.