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Everyone Has a Right to Moan About Work From Home

Everyone Has a Right to Moan About Work From Home

Saturday, 13 February, 2021 - 05:30

The tone at the top sets the culture of the firm. Over at the UK arm of KPMG, the top has been sounding pretty tone deaf.

The “Big Four” accountancy firm announced on Friday the resignation of Chairman Bill Michael after the Financial Times reported that he told staff to stop moaning about the challenges of pandemic working and rejected the concept of unconscious bias as “crap.” Such remarks gave the impression that the intensifying discussion around mental health and diversity has simply passed KPMG LLP by.

Michael swiftly apologized and initially stepped aside, saying the words he used on Monday’s town hall with financial-services consultants did not reflect what he believes in. KPMG launched an investigation. On a temporary basis, it’s appointed replacements for both of Michael’s roles — Bina Mehta is acting chair and Mary O'Connor is acting senior partner. It’s the first time they’ve been held by women. But the reputational damage will take time to mend.

Many people have been fortunate to retain their job and work from home in the pandemic, especially in the finance industry. Meanwhile some industries have shut down entirely, and workers in health care and other essential services have soldiered on amid the higher risk of contracting Covid-19. But even within a white-collar firm like KPMG the range of experience will be wide, and everyone deserves their concerns to be heard with sensitivity.

The onus is now on KPMG to show that its employees — its main asset — will be listened to if they say they are struggling. The firm also needs to demonstrate it’s open to criticism from within, and not just when there’s a media storm.

While KPMG has several programs designed to promote diversity and inclusion, the risk is people doubt its sincerity. One reason training to combat unconscious bias and microaggressions is so important is that it targets behavior that people may be too scared to question, and which can get air cover from demonstrative pro-diversity policies.

The year is young and it’s already shaping up badly for the professional services industry. Deloitte LLP received a record 15 million-pound ($21 million) UK fine for audit failings. Management consultant McKinsey & Co. agreed a near $600 million settlement relating to work for the pharmaceutical industry on selling opioids. KPMG can scarcely afford giving talented hires another reason to sign elsewhere. Its financial performance lags peers, and an investigation into its auditing of failed UK construction company Carillion is yet to be published.

Listed corporations are watched by outside shareholders, nowadays increasingly mindful of environmental, social and governance risks and with the power to fire managers. Accountability in the professional services industry is a fuzzier affair. Supervisory power lies with regulators and clients threatening to walk.

UK auditors’ own governance code says firms should promote an appropriate culture principally through “the right tone from the top.” They should maintain “a culture of openness which encourages people to consult and share problems.”

The Big Four firms talk a lot about the strength of their audit culture. They could go further to evidence this, say by annually disclosing the results of staff surveys, including questions about the strength of the leadership and the commitment to diversity and inclusion, and outlining in general terms usage of speak-up hotlines. Call it a culture audit.

The episode is a reminder of non-executive directors’ formal responsibility to help secure their firm’s reputation. KPMG’s independent non-execs are led by former head of the MI5 security service Jonathan Evans. They said in their 2020 report that its response to issues including Covid and diversity would have a major impact on its standing. Unfortunately, they were right.


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