“Devoid of an ethical backbone.” This is a pretty condemning statement from Senator Deborah O’Neill – who chairs the Corporations and Financial Services Committee, which last week released a report revealing the scale of the firm’s profiteering from leaking confidential government tax plans to potential clients.
“You cannot provide a level of assurance as required by our financial markets, let alone by the government, if you are operating out of a model that is so clearly devoid of an ethical backbone,” O’Neill said.
Not only did PwC breach government confidentiality, but it used the information to circumvent the government’s attempts to stem multinational tax avoidance: and the cash came rolling in.
PwC Australia’s boss Tom Seymour stepped down as CEO on Monday evening, but remains a senior partner at the firm despite the fact that he led its tax operation when confidential government tax plans were widely shared and aggressively marketed in e-mails to potential clients.
PwC, the brand
Given my professional interest in branding companies and organisations, I visited PwC Australia’s website to check out who they say they are, and why they exist.
At PwC, our purpose is to build trust in society and solve important problems.
Act with integrity. Make a difference. Care. Work together. Reimagine the possible.
Our Behaviours (include):
- Speak up for what is right, especially when it feels difficult.
- Expect and deliver the highest quality outcomes.
- Make decisions and act as if our personal reputations were at stake.
- Create impact with our colleagues, our clients and society through our actions
Last year they produced a stunning 39-page Transparency Report. The (now ex) CEO Message in the report is optimistic and upbeat.
The work our team has done to bring our purpose to life – to build trust in society and solve important problems – has allowed us to deliver record revenue and profit growth, make record investments in our peoples professional and personal development and work side by side with our clients to help them deliver on their own goals and aspirations.
PwC, the brand damage
A brand promise is a promise made and a promise kept. PwC have invested hundreds of millions of dollars into their brand since it was relaunched in 2010. I helped them launch “What do you want to change” to their staff on a nationwide roadshow. It was exciting, and it felt good. I bet it doesn’t feel like that in PwC’s offices today.
They know, better than anyone else, that relationships between client and adviser are built on TRUST – which, once broken, is tremendously difficult to restore. Leaking confidential Federal Government tax plans to clients for financial gain is pretty a pretty woeful act of mistrust.
The external push for accountability and payback is picking up a lot of momentum. They have spurned a larger Senate inquiry into the conflicts of interest between the governments and the big four accounting firms that provide it with expert advice. And this is THE BIG ISSUE!
This whole debacle raises questions about the use of private accounting firms to help formulate tax laws, when they are also serving their clients’ interests by ensuring they pay as little tax as is legally required. This model is intrinsically flawed. It’s the equivalent of having the same adviser on both sides of a takeover bid – acting for the bidder and for the defence.
In this instance, PwC thought it could play both sides. And it’s a decision which will cost it’s brand dearly.
PS PwC’s sponsorship of a $5000-a-head post-budget dinner last night was withdrawn.