Consulting industry fights being tarred by the PwC brush
It is a “great shame” that the industry will be affected by the actions of a few bad actors, says Senator Paul Scarr.
Fronting a parliamentary committee on Thursday, Boston Consulting Group (BCG) was asked whether it was tired of being classed with the big four “problem children.”
“Whatever the frustrations,” said Miguel Carrasco, managing director at BCG, meaningful change was the focus of a recent consulting industry meeting.
Senator Paul Scarr said it was a “great shame” that the entire industry will be affected by the regulatory changes to come from the public scrutiny caused by the PwC tax leaks scandal.
“The wrongdoing of a few can lead to that regulatory pendulum swinging and sometimes when it swings, it swings hard, indiscriminately,” he said.
Some among the big four have also taken the opportunity to distinguish themselves from PwC. Chief executive of EY Oceania, David Larocca, for example, pointedly told a parliamentary inquiry last year that “At EY, we don’t deliberately breach confidentiality.”
“We don't market tax minimisation schemes, we don't use blanket legal professional privilege claims to frustrate regulators and our business model is not built on condoning, rewarding or covering up this kind of behaviour,” he said.
Senator Barbara Pocock called out Mr Larocca’s finger-pointing, saying the firm needed to prove its integrity with meaningful change.
“You distinguish yourself from PwC and you’re telling us that you’re different and better, but for me, it’s deeds, not words, that people are looking for,” said Ms Pocock.
While the Joint Committee stated on Thursday it was prepared to accept the problems with tarring an entire industry with the brush of a handful of wrongdoers, Ms O’Neill was less willing to accept that logic at the level of the individual firm.
When asked to identify BCG’s greatest integrity risk factors, BCG managing partner Grant McCabe answered that it often comes down to the actions taken by individual employees.
Ms O’Neill said the ‘few bad apples’ logic “doesn’t hold water anymore,” adding that the problem can go beyond the individual to the broader system.
Senators have grown increasingly frustrated with the conduct of large consulting firms in the ongoing inquiry into consulting services, with PwC repeatedly criticised for its unwillingness to share the Linklaters report on its misuse of government information.
International law firm, Linklaters were appointed by PwC in May last year to form an independent assessment of what happened in relation to the unacceptable sharing of confidential information by PwC Australia with PwC personnel outside of Australia. The report is yet to be released.
“[The report] should be released as a demonstration of the so-called ‘new leaf’ that you’re trying to project … but how do we have any confidence in the things you say that you’re doing when we are treated with disrespect?" Ms O’Neill stated.
KPMG chief executive Andrew Yates has also been accused by Senator Barbara Pocock of misleading the Senate regarding his company’s dealings with the public service.
“You come here and you mislead the Senate and you convey a set of values to the KPMG workforce—thousands of people who are watching you today and want you to be a leader who actually does right.”
