Consulting giant PwC has been savaged in an independent review that exposed the firm’s “shadow” culture contributing to its infamous tax leaks scandal.
The review, run by former Telstra boss Ziggy Switkowski, was tasked with investigating revelations earlier this year that the firm’s former tax partner Peter Collins shared confidential information within the firm regarding multinational tax measures it was helping Treasury to develop in 2015.
The accounting firm subsequently used the information to advise clients on how to sidestep the tax changes.
The review’s report, released on Monday, paints a brutal and unaccountable culture atop the big four firm, which is driven by a “growth at all costs” mantra with a myopic focus on “revenue, revenue, revenue”.
The review consistently found the attitude among staff that “revenue is king” and partners who exceeded their KPIs were treated as “heroes”.
“Overall, interviewees and focus groups reported that conversations about purpose and values have declined and receive less consideration in decision-making,” Dr Switkowski wrote in the report.
Dr Switkowski also commented that the firm’s “aggressive growth agenda” to outstrip its rivals and become the biggest accounting firm in the country “occurred at the expense of the firm’s values and purpose”.
“The focus on ‘whatever it takes’ seems at times to have contributed to integrity failures,” the report said.
“Some partners did the wrong thing while others failed to do the right thing by overlooking or minimising the significance of questionable behaviours.”
Despite not naming former chief executives Tom Seymour and Luke Sayers, who have since departed the business, the inquiry found a “generally accepted view that the CEO ‘runs the show’ and there was a reluctance of partners to challenge the CEO even at a senior leadership levels”.
“The CEO is not perceived to be accountable to the board,” the review says.
“The CEO has a strong mandate, being elected following a presidential-style campaign, and other than maintaining popularity has relatively unchecked authority.”
The firm’s governing body was also found to “lack independence and external voices”.
Under sweeping changes recommended by the review, which PwC has promised to implement, independent members will be added to the firm’s governance board, the board will have the ability to sack the chief executive, and partner remuneration will be overhauled.
PwC’s newly appointed chief executive Kevin Burrowes, who was parachuted into the position from Singapore in July by the firm’s global leadership, said the company’s Australian brand was determined to rebuild and regain the community’s trust.
“We are deeply sorry for that behaviour and the culture that allowed it to go unchecked for many years,” Mr Burrowes said in an open letter.
“Together, these investigations reveal shortcomings that should not have been possible at a firm like ours. It is clear that we did not meet our own expectations – much less those of our stakeholders – and that there was a failure of leadership, both by individuals and as a firm.
“However, by identifying and accepting these failures, we begin to chart our path forward. We have listened, we are learning, and we will change.”
In an attempt to rebuild trust with government, PwC hived off its government consulting arm and sold it to private equity firm Allegro Funds for $1 in July.