PwC Names New Leader for Australian Operations Amid Scandal

New Leader for Australian Operations Amid Scandal

PwC, the global professional services firm, has appointed Kevin Burrowes, a senior partner from its global network, to lead its troubled Australian division. The move comes as PwC seeks to rebuild its reputation and regain trust following a scandal that rocked the company.

Next Steps

Burrowes, a seasoned veteran at PwC and currently the head of the PwC Network’s global clients and industries business based in Singapore, will relocate to Australia to take over the local partnership. He replaces Kristin Stubbins, who served as interim CEO after Tom Seymour’s resignation just two months ago.

Justin Carroll, chair of PwC Australia’s governance board, expressed confidence in Burrowes, stating that his extensive experience across different parts of the PwC Network brings a fresh perspective to the firm. Burrowes is expected to work closely with his colleagues and management team to rebuild trust with PwC Australia’s stakeholders.

The Scandal

The scandal that has plagued PwC Australia involves a senior partner in its tax practice who leaked confidential government information to colleagues both domestically and internationally regarding plans to combat tax avoidance by multinational companies. Peter Collins, the partner at the center of the scandal, was banned by the industry watchdog earlier this year. However, the controversy remained in the public eye after Australian senators disclosed emails that revealed PwC had utilized the leaked information to secure business deals. Consequently, the Australian government has barred PwC from competing for new contracts with various public and private sector organizations until a review is concluded, and the matter has been referred to the police for investigation.

In addition to the leadership change, PwC Australia recently agreed to sell its government consulting business to Allegro Funds, a private equity company, for a nominal sum of A$1 (US$0.66). The deal, set to be finalized next month, marks PwC’s complete withdrawal from government advisory work in Australia, which accounted for approximately 20% of its revenue for the fiscal year ending in 2023. As part of the agreement, around 1,750 employees will transfer to the Allegro-owned operation, severing ties with the PwC brand.

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PwC Responding to Crisis

These latest developments, including Burrowes’ appointment and the divestment from government consulting, represent significant steps taken by PwC’s global business in response to the crisis. PwC, along with other Big Four firms, operates as an alliance of locally owned member firms. While this structure is designed to contain financial losses and legal liabilities within each country, the severity of the Australian situation and the evidence of the leaked tax information being used outside the country have turned it into an international issue.

Bob Moritz, PwC’s global chair, emphasized Burrowes’ expertise in the global network’s governance structures and standards. Moritz acknowledged that PwC Australia had failed to meet the network’s code of conduct and uphold its professional standards and values under past leadership. He expressed deep apologies to clients, stakeholders, and employees, asserting that the steps being taken with the network’s support would lead to a stronger firm.

As PwC Australia works to repair its reputation and restore trust, the appointment of Kevin Burrowes represents a pivotal moment in the company’s efforts to overcome the scandal and rebuild its standing in the Australian market.

Source: Financial Times
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