PwC Australia’s partnership endorses milestone reform package which will strengthen the independence, oversight powers and duties of its Governance Board
The landmark changes will set a new standard of governance for professional services firms in Australia, including through the appointment of an independent non-executive Governance Board Chair. The firm will also add at least two additional independent non-executives to our Governance Board
PwC Australia CEO welcomes reform endorsement as a critical step forward in the firm’s mission to embed its Commitments to Change and Action Plan
Summary of changes
7 March 2024, Australia - In a defining moment for PwC Australia, the partnership has endorsed a milestone reform package, which will significantly enhance the firm’s governance and set a new standard for professional services firms in Australia.
The endorsement ensures a suite of governance changes will be implemented, strengthening the independence, oversight powers and duties of the Governance Board. This includes paving the way for the appointment of an independent non-executive Chair - a first for an Australian big four professional services firm.
PwC Australia CEO Kevin Burrowes has hailed the vote outcome as a critical step in the firm’s ongoing work to rebuild trust with stakeholders and embed its Commitments to Change.
“I am really proud of what our partners voted to do today. By embracing these landmark changes, we are raising the bar for our industry when it comes to best in class governance. While there is still much work to do, these changes - once implemented - will ensure there is significant independent representation on our Governance Board. This will result in a much more robust and comprehensive means of governing our firm, aligned to our vision of becoming the leading professional services firm built on the highest ethical standards with integrity at our core,” he said.
“Our people, clients and the community expect us to lead by example and this vote enables us to embed the measures we believe are necessary to rebuild trust. It reiterates our firm’s commitment to the changes outlined in our Action Plan and signifies the next stage of implementation,” he said.
Partners will continue to be involved in key decisions, including voting for internal Governance Board members, approving the extension of independent non-executives’ terms and approving the appointment of the CEO. However, improved independence, as well as increased oversight, powers and duties will ensure the Governance Board is well equipped to hold management to account and to provide strong governance oversight for the firm.
The vote outcome enables a number of important changes, such as;
An ability to appoint an independent non-executive as Chair of the firm’s Governance Board. The firm will also add at least two non-executives to the Board. A search for candidates to fulfil these roles is underway.
A new process for electing the CEO, which will see candidates approved by the partnership following an exhaustive due diligence process by the Governance Board. It also stipulates that the Governance Board and CEO undertake succession planning to identify potential future candidates and oversee development opportunities.
All Governance Board members will be formally evaluated by the Chair annually, with the Board assessed every three years by an external third party provider. This enhanced accountability is in line with best practice of high-performing ASX-listed Boards.
The reform package will also introduce an income deferral mechanism for members of the Management Leadership Team, including the CEO, whereby a percentage of pay will be permanently withheld in the event of serious misconduct or significant regulatory or quality failure that results in a loss in confidence of the firm.
These changes are in addition to the firm’s pledge to publish comprehensive, audited financial statements by September 2025 - another industry leading measure. These are all steps the firm committed to in its Action Plan, which was released in response to Dr Ziggy Switkowski AO’s Independent Review of Governance, Culture and Accountability at PwC Australia.
Current Chair of the Governance Board, Justin Carroll, welcomed the outcome and said the suite of measures will herald a new era for the firm.
“The Governance Board is delighted that these changes have been endorsed by the partnership. Our people, clients and communities rightly expect the highest standards of governance and accountability from our firm and these enhanced measures establish a best-in-class governance framework. We look forward to continuing to strengthen our firm and overseeing the swift implementation of these changes,” he said.
The firm intends to have the new Board members in place by the start of the new financial year (1 July).
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