“In recent years, the emphasis on growth coupled with high levels of trust and reluctance to challenge created blind spots. It may also have contributed to a willingness of partners to tolerate poor behaviours of ‘rainmakers’.”
At the same time, Switkowski found the CEO position was not perceived within the firm as being accountable to the board – unlike CEOs in other companies.
“Culturally, the generally accepted view is that the CEO “runs the show”. During a long period of commercial success, this has translated to a reluctance of partners to challenge the CEO, even at senior leadership levels,” the report said.
“It has also led to heightened (potentially even misplaced) trust in the CEO.”
“A powerful CEO can also contribute to “fluid” management practices and to decisions being made ‘out of the room’ or overridden. The overly collegial culture at PwC Australia has tended to amplify the power of the CEO.”
Switkowski said in his report that against this backdrop, the overplaying of collegiality creates risk.
“PwC Australia exhibits a “good news” culture at the enterprise-level where “good news gets communicated and bad news gets held back”.
“The Review found there is a general hesitancy to delve into uncomfortable conversations, to learn from mistakes and to be prepared to hold others to account.
PwC said in a statement that it had developed a comprehensive management response and action plan to serve as its road map for re-earning the community and its stakeholder trust.
“The Action Plan is built around five commitments for change, including enhancing the independence and effectiveness of our governance board, embedding a culture and practice of constructive challenge, improving discipline and rigour of decision-making, strengthening risk and incident management accountabilities, and putting our values at the core of everything we do,” the firm said in a statement.
Leading this change will be current PwC Australia chief executive Kevin Burrowes, who was brought in from the firm’s Singapore office.
“Our Action Plan will help us chart a course to achieve our vision of becoming the leading professional services firm, built on the highest ethical and professional standards with integrity at our core.”
“From the top down, we will learn from these findings, rebuild and re-earn the trust of our stakeholders. That is our promise to our people, partners, clients and our communities.”
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