Incoming PwC Australia chief announces major shake-up of top team

A big shake-up of the firm’s top team will see the departure of its two senior legal experts, ahead of the new CEO’s arrival.

PwC Australia’s top two legal officers have announced their intention to retire. Picture: NCA NewsWire / Andrew Henshaw

PwC Australia’s incoming chief executive, Singapore based Kevin Burrowes, has announced a major shakeup of the firm’s top team ahead of his arrival later this month, which will see the departure of its two senior legal experts.

In an email to partners on Tuesday afternoon, Burrowes, who was appointed as chief executive by the group’s network last week, said he would be taking over the new job on July 17 with the approval of his visa.

The restructuring will see the departure of the firm’s top legal officers, long time general counsel, Meredith Beattie, and Tony O’Malley, who was recently appointed to head up PwC Australia’s risk and ethics division, both of whom the firm said had announced their intention to retire.

Ms Beattie’s departure is significant as she has been seen as a leader of the firm’s response to the tax leak scandal which arose from advice given by the firm to the Australian Tax Office as part of its multinational tax crack down.

Some sources have criticised the firm’s approach to government inquiries and the Tax Practitioners’ Board as being overly legalistic.

Mr O’Malley was PwC’s global legal business solutions leader until he was appointed as chief risk officer by acting chief executive Kristin Stubbins in May.

The firm’s global leader for public policy and regulation, Jan McCahey, will step up to the role of chief risk and ethics leader and join the executive board, with the firm’s new legal counsel to be announced shortly.

Mr Burrowes’ announcement will see a major restructuring of the firm’s 12 person executive board, with the departure of seven existing members, who will still stay with the firm, and several new appointees from within the firm.

PwC Network Global Clients and Industries leader Kevin Burrowes is incoming PwC Australia CEO

PwC’s acting chief executive, Kristin Stubbins, will remain on the executive board, taking up a new role on the firm’s executive board as strategy and transformation leader.

Her role will include overseeing the implementation of the recommendations of a report being prepared by former Telstra chief executive Ziggy Switkowski, which is expected in September.

As he steps in to deal with the major crisis facing the firm, Burrowes said his key priorities would be to “enhance the firm’s governance, accountabilities and culture, restore our business performance and re-earn the trust of our stakeholders and the broader community.”

He also promised to ensure that the firm elected its next chief executive “within a suitable timeframe.”

Announcing the appointments, Mr Burrowes, a PwC veteran who has been based in Singapore, who was brought by PwC’s global network to run the firm in the wake of the growing tax leak scandal, said his visa application had been approved and he would take up his role later this month.

He praised acting chief executive Ms Stubbins, who took over the role when former chief executive, Tom Seymour stepped down in May, for her role leading the firm for having done “a phenomenal job over what has been an incredibly challenging time for the firm.”

“Her resilience and dedication to the firm is admirable and I am delighted she will continue to be a member of the executive board.”

The new appointments to the board include assurance leader, Sue Horlin, markets leader Tom Gunson and Catherine Walsh as people leader.

Financial advisory leader Rob Silverwood and chief operating officer, Liza Maimone, and consulting leader, David McKeering, will remain on the board.

The announcement was made following the firm’s move on Monday to oust eight partners for their role in the tax lead scandal including former chief executive, Tom Seymour, and former chairman Peter Van Dongen.

PwC did not comment on reports that the eight departing partners were leaving on terms which would see them still being paid their annual partner retirement benefits, which have been around $140,000 a year.

The announcements follow the news that PwC had agreed on the terms of the sale of its government consulting business to private equity firm Allegro as part of its move to exit government consulting.

In a statement to staff, Stubbins said PwC was pleased to have signed the deal which will could the departure of some 130 partners and a potential 1,750 staff involved in the government consulting business to Allegro in a new private company to be called Scyne Advisory.

Ms Stubbins said she was “confident that Allegro, the PwC partners moving to the new business, and the staff joining them, will create an excellent business, committed exclusively to the public sector, with a strong governance framework in place.”

She said the announcement of the next step in the sale, which is expected to be completed by the end of August, would “provide clarity for our people and our government clients.”

Allegro also announced plans to inject as much as $100m into the business, which it is buying from PwC at a cost of $1.

Announcing the sale, PwC said its government consulting business was responsible for some 20 per cent of its revenues which total around $3bn a year.

Former Federal Court judge, Brisbane based Andrew Greenwood, will join as a director of Scyne Advisory, with his role including chairing a probity, conflict, and ethics subcommittee of the board.

Allegro is at pains to point out that the new business will be fully independent from PwC and will not include any former staffers or partners who have been involved in the tax leak scandal.

The firm has committed that Scyne will have an independent board with the same standard of governance as an ASX listed company with other candidates for independent directors currently being interviewed.

In a statement released on Tuesday, Scyne Advisory partners Tim Jackson and Ben Neal, who have been involved in PwC’s government advisory business, said the new leadership’s immediate focus would be on “achieving a rapid transition to independence, with ethics, strong governance and a government-only focus embedded from the start.”

“We have a once-in-a-generation opportunity to lead the change required in government advisory in Australia,” they said.

“The DNA of our people is solving complex problems impacting the public sector. Governance and culture will be at the core of the new business.

“Our people have deep sector knowledge and they will set our new culture, with the needs of our clients’ remaining paramount. Restoring those clients’ trust is our number one priority.”

Adrian Loader, Allegro’s co-founder, said his firm was “backing the leaders of Scyne Advisory and their vision to drive real change in the public service advisory sector.”

“It’s clear there is a need for a strong and independent government advisory firm of scale in the Australian market.

“Scyne Advisory will have an industry-leading governance model able to meet the requirements of the Australian government and its agencies,” he said.

“We have been incredibly impressed by the quality of the people and their attitude and outlook.”

He said Allegro, which was founded in 2004, had “deep expertise in managing corporate carve-outs – extracting businesses from complex organisational structures and putting in place a strong governance framework that supports cultural change and improves performance.

“The recent process of buying Toll Global Express from Japan Post is a great example,” he said.

Originally published as Incoming PwC Australia chief announces major shake-up of top team