Monday, September 25, 2023

The most powerful people in the consulting sector in 2023

 PwC tax scandal on wiki

The most powerful people in the consulting sector in 2023

Last year, the nation’s key players were from the top five firms. This year, they are all outsiders. AFR Magazine’s hotly anticipated Power issue is out on Friday, September 29.

Edmund TadrosProfessional services editor
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The 2022 list of the most powerful people in consulting was populated by consultants including Tom Seymour, then chief executive of PwC, who took out third spot. But the thunderclap of the PwC tax leaks scandalhas upended the industry and this year’s list is filled with the people who are reshaping it. And that includes just one consultant.

The downfall of PwC shows that in the rarefied world of consulting, the client is not just king – they can also be judge, jury and executioner.

That was on full display when the Department of Finance, furious that PwC had not come clean about the extent of the leaks at the start of the year, in effect cut off the firm from future work with the Commonwealth in May. That’s power.

PwC remains the largest of the big four by revenue but will fall from its perch this financial year. Deloitte is on track to take its place, followed by Accenture. Peter Burns, chief executive of Accenture, is the only return entry on the list this year.

Jenny Wilkinson, Deborah O’Neill, Barbara Pocock, Peter Burns and Andrew Greenwood. Alex Ellinghausen, Martin Ollman, Louie Douvis

1. Jenny Wilkinson

Finance secretary Wilkinson told the Senate that officials first learnt of the PwC tax leaks matter in January, via The Australian Financial Review, and did not realise the extent of the scandal until May, after reading another Financial Review report.

The firm had initially played down the matter, and only in May confessed it involved many more PwC operatives than first indicated. That lack of candour was considered unforgivable by the department that controls the rules about how the Commonwealth buys goods and services.

The Finance Department was quick to unveil updated rules reminding procurement officials they must consider previous behaviour, including ethical conduct, when evaluating tenders.

Overnight, the largest consulting customer in the nation in effect stopped buying from PwC. The move forced PwC to sell its public sector division, estimated before the scandal to be worth almost $1 billion, to private equity investor Allegro Funds for $1.


2. Deborah O’Neill

Labor senator O’Neill has had the big four consulting firms – Deloitte, EY, KPMG and PwC – in her sights for years, railing against their conflicts, secrecy and lack of accountability.

She was instrumental in revealing the extent of the PwC matter, first during Senate estimates questions and then via a Question on Notice that uncovered the 144-page cache of internal PwC emails.

O’Neill formed one part of a formidable interrogation tag-team (with No. 3 Greens senator Barbara Pocock) during the Senate inquiry into consulting firms and other hearings.

She is only getting started. In June, O’Neill announced a new joint parliamentary inquiryinto the partnership models of the big four firms and their lack of disclosure obligations, which will also explore how they are regulated and punished for bad behaviour.

The results of the inquiries will be fed into no less than eight new two-year reviews announced by the government into the sector, covering areas such as the structure and regulation of the firms, the Australian Taxation Office’s information-gathering powers and rules around legal professional privilege claims.

3. Barbara Pocock

After convincing the Labor government in March to agree to the Senate inquiry into consulting, Pocock has been forensic with her interrogation of the often hapless firm leaders. She has not been shy in cutting them off when they (often) stray off topic.

The inquiry managed to extract information from the firms they have never previously released (including profit, partner pay and partnership deeds).

Pocock and O’Neill have also forced the ATO and the Tax Practitioners Board to detail how they investigated the PwC tax leaks matter and why it took so long for action to be taken.


4. Peter Burns

Burns, who earns $2.5 million a year to helm Accenture, managed the remarkable feat of being the only consulting leader to appear at the Senate inquiry who was not subject to a pile-on by the two senators above him on this list.

It helps that Accenture is the Australian branch of a listed company and is required to file audited financial results. Much of Burns’ testimony detailed how Accenture is different from PwC, and by extension Deloitte, EY and KPMG, which are all private partnerships.

The firm’s annual revenue was up 29 per cent to almost $3 billion last year and its results are on track to have exceeded that figure at the end of its 2022-23 financial year (in August).

5. Andrew Greenwood

The long-time Federal Court judge has agreed to be the moral compass for Scyne Advisory, the renamed former public sector consulting arm of PwC, vetting its inaugural incoming cohort of partners and staff.

He was announced as Scyne’s first non-executive director in July and is chairing the new company’s probity, conflict and ethics subcommittee. This is the group responsible for approving the firm’s new employees and matters such as conflict checks so that the PwC problem stays with PwC.

His broader goal is to help set up what will be the country’s newest consulting firm, which features ASX levels of corporate governance and offers services to public sector organisations only.

The private equity-backed outfit will become a threat to the public sector arms of Deloitte, EY and KPMG if it does well.

The AFR Magazine annual Power issue is out Friday, September 29, inside The Australian Financial Review. Follow AFR Mag on Twitter and Instagram.