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‘Nothing independent’ about PwC’s reform assessment, MPs say
Independent monitoring of PwC’s internal reforms in response to its tax leaks scandal will end almost a year ahead of schedule after the consulting giant was found to have met all but one of its promises to fix culture and accountability flaws.
Chief executive Kevin Burrowes, who was parachuted in from Singapore to take charge of the local firm at the height of the scandal, said he was “delighted” with the report’s findings, which would provide “a really solid foundation for us to now move forward”
The glowing assessment of the independent monitoring report contrasts sharply with the findings of a parliamentary committee last year which held that the firm’s “articulation of changes to governance and culture in the marketplace is not at all matched by [its] internal processes”.
Burrowes admitted there was “more work to do”, particularly in relation to elements of internal culture, but praised the “absolutely awesome” quality of PwC’s independent directors and changes the firm has made to its risk, ethics and conflicts processes.PwC remains under the supervised remediation of PwC International as it works itself out from under the shadow of the tax leaks scandal. An AFP investigation into four former partners of the firm is still under way.
Burrowes said the end of the monitoring “is not the finish line … [but] having an independent monitor validate and verify our work is a tremendous endorsement of the firm and that we have taken [our commitments] very, very seriously.”
“We’ve got a very strong foundation, but we have to build on it a great deal. We’re certainly not done, and there is a lot to do,” he told The Australian Financial Review.
The monitoring was overseen by law firm Webb Henderson and relied on disclosures from PwC detailing its progress against its reform metrics. The firm had the right to request information and briefings from the firm. The monitoring was intended to continue until March next year.
“Given the progress made by PwC … we recommended an earlier conclusion to our review, which PwC Australia recommended,” the law firm said.
Burrowes did not provide a timeframe on when local partners would be given the opportunity to elect a new chief executive, saying the decision was in the hands of the PwC’s Australian chair not its global parent.
He said scrutiny from the global firm was “much reduced” and predicted the results of the monitoring exercise would give senior international leadership confidence that the troubled local branch was making progress.
The reform that was not found to be complete related to changes to the partnership agreement which would allow for a majority of independent non-executive directors to sit on the firm’s governance board.
Burrowes declined to comment on the ongoing police investigation, which resulted in the firm’s offices being searched last year, other than to say it related to former partners and not the firm itself.
He also said the firm was “in constant dialogue” with the Australian Tax Office and Tax Practitioners Board. “We’re no different now in our engagement with them than other practitioners in the country. There’s nothing to report there,” he said.
Separately, the firm announced it had appointed a fourth independent director: Coles Group director Wendy Stops will join the board in July.
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