PwC Australia Goes All Out in Welcoming Damning Report
PwC Australia’s crisis stemming from its tax practice had a major shoe drop last week when the firm published a report it had commissioned on its governance. The company’s response to the report was forthright — as it needed to be. This is a do-or-die situation of the company’s own making.
The scandal broke earlier this year when it was revealed that a PwC tax partner who was advising the Australian government on new rules aimed at curtailing tax avoidance by multinational corporations had leaked drafts to colleagues and clients. The aim there was to use the information to drum up new business.
That tax partner has left (as has the CEO), and in June PwC Australia sold its government business to an investment firm — for A$1. The company, which has repeatedly admitted wrongdoing, hired business executive Ziggy Switkowski to conduct a review of its “governance, accountability and culture.”
It published that report on Sept. 27, though it’s dated August 2023. The delay is explained by PwC’s extensive, and impressive, response to it. Switkowski’s 80-page report took issue with many aspects of PwC’s governance, including the CEO having too much power, a laser focus on revenue causing people to cut ethical corners and unclear responsibilities and accountabilities leading to gaps.
PwC Australia’s whopping 19-page response mainly takes an approach typical for a company caught in the wrong, one that continues the firm’s tack from the beginning: namely, focusing on changes already made. But the firm also promises to further address the shortcomings Switkowski identifies. Interestingly, one promise is to adopt stricter management more akin to a publicly traded company than a partnership.
“While at times difficult and disappointing to read, Dr. Switkowski’s review lays bare where shortcomings exist in our firm and a culture that allowed them to go unchecked over time,” new PwC Australia CEO Kevin Burrowes and Governance Board Chair Justin Carroll write in a forward to the response. That tone is pretty much in keeping with the self-flagellation the firm has engaged in all along.
The report and response can be found on a webpage at PwC Australia’s site that’s unusual for its richness. It boasts other resources, including a 3-minute video message from Burrowes. Not every crisis will call for such extensive materials, though it’s smart to create a website or webpage dedicated to a high-profile messy situation or litigation.
For PwC Australia, this crisis is so dire — a criminal investigation is ongoing — that it’s smart to pull out all the stops.
Photo credit: TK Kurikawa/Shutterstock
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