‘A terrible gap’: big 4 firm moves to shake up board

‘A terrible gap’: big 4 firm moves to shake up board

‘A terrible gap’: big four firm moves to shake-up board

The chairperson of a big four firm is employing a little-used mechanism for board appointments to plug skill set and diversity holes, following feedback that “the partners that have been here for life have all the power.”

KPMG chairperson Alison Kitchen, who officially took the reins from Peter Nash about a month ago, spotted a disconnect between the diverse skill sets being sought for KPMG through appointment and acquisition, and board representation.

Ms Kitchen has since added to the board outside of the standard election process — a method which is allowable, but historically rarely used. In typical circumstances, partners put themselves forward for the election process, meaning the pool of candidates can’t be controlled.

“A number of people said to me the partners that have been here for life have all the power in the organisation,” Ms Kitchen said at a function in Sydney today.

“When you reflect on the acquisitions [chief executive Gary Wingrove] has made over the last few years, he has been deliberately going out and targeting different skill sets we haven’t got and bringing them into the business. Not having them being able to find their way onto the board was a terrible gap,” she said.

Dr Julian Edwards and Sarah Dunn joined the board in September and October respectively. Dr Edwards was part of the executive team that turned a technology start-up into a 300-person firm, and Ms Dunn is a senior lawyer with 20 years’ commercial litigation experience.

“I’m excited that I’ve got two new board members from very different backgrounds,” said Ms Kitchen. “It broadens the skill set and the thinking we have.”

As the first female chairperson of KPMG — and of a big four professional services firm in Australia — gender diversity is high on Ms Kitchen’s priority list.

Of KPMG’s 62 partner admissions for 2017, 42 per cent were female. However, overall, only 24 per cent of KPMG’s partnership are women.

Consistent with the experiences of the accounting industry, graduate and new intakes are a roughly 50/50 gender split, but the proportion of women starts to drop at around age 30.

Ongoing, the firm is implementing a range of policies and services in the name of staff retention, particularly geared towards women who want to maintain their family obligations and career, chief executive Gary Wingrove said. These include flexible working arrangements and sponsorship and support programs.

Mr Wingrove explained that this “portfolio of policies” will form part of the strategy that gets the partnership to a target of 30 per cent female by 2020. This is slightly behind similar targets set by the Australian Institute of Company Directors (AICD) of 30 per cent female representation on ASX 200 boards by the end of 2018.

“We are trying to create an environment where everyone has an equal opportunity,” said Mr Wingrove. “The facts as they stand suggest this hasn’t been the case in the past.”

Growth on the cards

KPMG has two middle-sized acquisitions set for announcement within six weeks, and is keenly engaged in the alliances space.

“We can’t have everything under our own roof with [the] expanse we are operating in,” said Mr Wingrove. “The alliances help us take the best to market.”

With that in mind, KPMG is in the process of making small, minority investments in business which can help access different market channels, such as in the technology space.

“There are more of those in the pipeline that will help us get readier and quicker access to market, but also take a combination of consulting skills and tech to our clients,” Mr Wingrove said.

As reported earlier today, this parallels moves of other big four firms, like Deloitte, who are partnering with external companies in a bid to boost partnership revenue and cut costs. You can read more about this emerging trend here.

 

 

‘A terrible gap’: big 4 firm moves to shake up board
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