PwC’s $1 deal an attempt to ‘phoenix’ its government relationship
The global organisation has taken greater control of the Australian firm’s mishaps, parachuting in one of its own as the next CEO.
PwC’s $1 deal with Allegro Funds to divest its federal and state government business has been labelled an attempt to phoenix the firm’s government relationship by Labor Senator Deborah O’Neill.
Ms O’Neill said the one-dollar number was ridiculous and that further investigation would be required.
“The whole amount is mind-boggling in itself, one dollar for a business of this scale, there are a whole lot of questions I think that need to be answered about that, and that just continues what I am now, I think appropriately, calling a saga,” Ms O’Neil said on ABC radio.
She said the slow and resistant responses to the public inquiries followed by the speed at which the firm had looked to phoenix itself raised several questions.
“We have this unseemly haste with a profit driven motive to try and phoenix itself back into some sort of connection with the government, I’m very concerned at this point of time that the motivations of those at PwC remain self-centred and not about service,” she said.
“There is no clear vision of who was ethical and who wasn’t ethical.”
“There’s a very very big bridge to build between where PwC currently is and any modicum of trust that a government might have with services provided by a company still dominated by a majority PwC staff. You can’t just rebirth your way out of the cultural practices of the mothership that they’re coming from.”
Board chair of PwC Australia Justin Carroll said the firm has looked to divestment with Allegro Funds as it believes it was the right thing to do.
“We have taken this step because it is the right thing to do for our public sector clients and to protect the jobs of the c. 1,750 talented people in our government business,” said Mr Carroll.
“This transaction will result in the first pure play, at scale, government business in the market. This was an extremely difficult decision, but we are determined to take all necessary steps to protect the jobs of our people and re-earn the trust of our stakeholders.”
“This transaction marks a new direction for PwC Australia and puts us on a path for success as we focus on our people and serving clients across Australia and our critical role in supporting capital markets.”
Somewhat alarmingly, PwC said its government advisory work at both the state and federal levels represented 20 per cent of the firm’s 2023 financial year revenue, with the divestment to impact its future size and operations.
Along with its one-dollar deal with Allegro Funds, PwC announced the appointment of its next CEO, Kevin Burrowes.
The decision saw the global firm look to take more leadership within the Australian operation, with Mr Burrowes previously based in Singapore as the network’s global clients and industries leader.
PwC said acting CEO Kristin Stubbins would remain in her role until Mr Burrowes moved to Sydney, with Mr Carroll thanking her for her efforts during the tumultuous period.
“The board wants to thank our acting CEO Kristin Stubbins for leading the firm during this challenging period marked by rapid change,” said Mr Carroll.
“We look forward to welcoming Kevin to our firm and leveraging his decades of executive leadership, unique experience working with PwC’s largest global clients and his extensive knowledge of the PwC network.”
“Kevin’s experience across other parts of the PwC network ensures that as he takes over the leadership in Australia he brings a fresh perspective to the firm, and he will work with his colleagues and management team to re-earn trust with PwC Australia’s stakeholders.”
As part of the global body’s increased control over the actions of PwC Australia, the firm’s global chair Bob Mortiz welcomed Mr Borrowes’ appointment and criticised the actions of previous leaders.
“I am pleased that PwC Australia has appointed Kevin as CEO. In addition to working with PwC’s largest clients over the past several years, Kevin is an expert in PwC’s network standards and governance structures and will be a great asset to the firm,” said Mr Moritz.
“Under past leadership, PwC Australia failed to meet the network’s code of conduct and uphold the network’s professional standards and values.”
“Its past actions are not representative of the work and behaviours of PwC around the world and I am deeply sorry to our clients, our broader stakeholders and our people. PwC Australia has significant work to do and I am confident that the steps they are taking with the network’s support will result in a stronger firm.”
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