Business

PwC strips partners of leadership roles over election rule breaches

Big Four firm found three senior executives committed ‘significant violations’ of its electioneering rules

PwC’s US election rules set limits on using partner meetings and electronic communications to campaign so that the race would not distract from the normal operations of the business. Photograph: Jakub Porzycki/NurPhoto via Getty Images

Tue Mar 5 2024 - 20:37

PwC stripped three senior partners of their management roles and disqualified one of them from the race to run its US business after finding they breached leadership election rules.

Neil Dhar, who had been considered a front-runner to replace Tim Ryan as US senior partner, was removed as a candidate in December and dropped from his role as co-leader of the US consulting business, said people familiar with the matter.

Two allies – John Garvey, PwC’s global financial services leader, and Julien Courbe, global chief client officer – had their management roles taken away at the same time, according to internal communications described to the Financial Times. Garvey announced his retirement last week.

PwC’s US election rules set limits on using partner meetings and electronic communications to campaign so that the race would not distract from the normal operations of the business.

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Dhar and his allies were found to have committed “significant violations” of electioneering rules and firm policies, said people familiar with the matter.

The developments shocked other senior partners and upended the race to lead the US firm, which had revenues of $23 billion last year and audits 27 per cent of US public companies by market value, according to Ideagen. The race was ultimately won last month by auditor Paul Griggs.

The latest messy succession process at the Big Four firm comes after Ryan’s decision to withdraw from the global leadership race last year and an unplanned leadership change in Australia following a tax leaks scandal.

Ellen Walsh, PwC US governance committee chair, said: “When concerns about our election were raised in November, consistent with our speak-up culture, those concerns were investigated objectively, our governance bodies responded and took prompt and appropriate action. The governance process worked as designed.”

After excluding Dhar, a nominations committee selected three other senior figures to be put to a vote of PwC’s 4,000 partners in the US and Mexico, where Griggs triumphed over Kathryn Kaminsky, head of the audit and tax business, and Jenny Koehler, chief investment officer. He will take over from Ryan in July.

Dhar had been expected to mount a strong showing in the partner vote. A 30-year veteran of PwC’s consulting business, his clients include private equity firms such as Blackstone and his CV boasts work on more than 250 transactions as he rose through the ranks of the firm’s deal advisory and capital markets businesses.

PwC’s global chair, US senior partner and UK senior partner roles are all changing hands at the end of the fiscal year in June, and leadership changes are also due in China and Japan.

Ryan was the favourite to be appointed as PwC’s global chair but pulled out of the race in October, several months into the process, amid debate over his “hard-charging” leadership style. The global board instead chose Mohamed Kande, who had been co-head of the US consulting business with Dhar.

Kande has been running that business alone since December.

Dhar declined to comment and Garvey and Courbe did not respond to messages seeking comment. Garvey wrote on LinkedIn last week that he was leaving the firm that he first joined as an accounting graduate in 1987, thanking colleagues for “a non-traditional and incredibly fulfilling career”. – Copyright The Financial Times Limited 2024

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