Consultancy firm admits that staff culture ‘not perfect’ as it awaits review
Executives at consultancy firm EY have conceded their workplace culture is “not perfect”, ahead of the release of a review into the company’s culture.
EY Regional Managing Partner and CEO, Oceania David Larocca during a Federal parliament committee hearing on the management and assurance of integrity by consultancy services. (AAP Image/Mick Tsikas)
EY’s Oceania chief executive David Larocca told a Senate inquiry into consultancy firms the review would be made public shortly after it was finalised at the end of July.
The review, led by former sex discrimination commissioner Elizabeth Broderick, was triggered following the death of an employee at EY’s Sydney office in 2022.
Mr Larocca said the findings from the review would be uncomfortable.
“But it’s more uncomfortable not knowing about the day-to-day experience of all our people and not doing anything about it,” he said.
“We invited the scrutiny because I know that we’re not perfect.”
Former consumer watchdog head Allan Fels has called for consultancy firms to be split up to decrease the risk of conflict of interest.
The inquiry heard EY investigated dividing itself into two separate entities, with one focusing solely on auditing, but determined it was not feasible.
“This was an incredibly complex transaction involving 13,000 partners across 75 countries,” Mr Larocca said.
“This transaction had never been attempted before, as it required agreement on a number of difficult issues.
“We very quickly formed the view that an audit-only firm would not enhance audit quality. In fact, it would detract from audit quality … multi-disciplinary capability is required, including to serve our audit clients.”
The Senate inquiry was set up after the PwC tax scandal, where the firm passed on confidential government information to clients.
Mr Larocca said the conduct of the sector had been “deeply disturbing”.
“At EY, we don’t deliberately breach confidentiality. We don’t market tax minimisation schemes,” he said.
“We don’t use blanket legal professional privilege claims to frustrate regulators, and our business model is not built on condoning, rewarding or covering up this kind of behaviour.”
However, EY executives clashed with senators on the firm’s refusal to supply their partnership deed, when other companies had disclosed theirs to the committee.
Mr Larocca said he was uncomfortable with competitors having that information.
Earlier, a leading ethics expert told the committee Australians would view companies that donate money to political parties while holding government contracts as a conflict of interest.
Mark Zirnsak, from the Uniting Church in Australia, said there were “deep concerns” over the ability of any company to have government contracts while being a political donor.
“I think that is a conflict of interest,” he told the hearing.
