[ 2021-02-17 ]

KPMG appoints first female leaders
London (UK) – 11 Feb 2021 – FT - KPMG has
elevated two female partners to run the firm on a
temporary basis and vowed to overhaul an unpopular
performance management system in an attempt to
calm relations with staff following an
investigation into chairman Bill Michael.

Michael, who has run KPMG UK since 2017 as
chairman and senior partner, stepped aside on
Wednesday during an investigation into a series of
contentious comments he made at an online meeting
with the firm’s financial services consulting
team on Monday.

His comments — which included telling staff to
“stop moaning” about work during the pandemic
and rubbishing the notion of unconscious bias as
“complete crap” — were reported to KPMG’s
internal ethics champions on Monday, according to
the firm. This triggered a formal investigation,
which will be carried out by magic circle law firm
Linklaters.

KPMG told its 600 partners at an online meeting on
Thursday that Michael — who decided to step
aside while the investigation takes place — will
be replaced by two female partners: Mary
O’Connor, who is head of clients and markets and
will take over Michael’s responsibilities as
senior partner, and Bina Mehta, a UK board member
who will assume the chairman role.

It is the first time in KPMG’s 150-year history
that either role has been held by a woman.

The firm is also poised to tell staff that it will
overhaul its unpopular performance rating system
whereby employees are ranked according to a
“forced distribution curve”.

Under the current system, a team of five must
include one person who achieves the best possible
rating and one person who receives the worst.
Managers and junior staff have criticised the
system for being too inflexible and demoralising,
with more than 600 employees “liking” an
online comment during an all-firm meeting last
November which called for it to be dismantled.

A former KPMG director said the current system was
“appallingly outdated and probably the biggest
cause of attrition and staff discontent”.

KPMG said its executive board decided to move away
from a “fixed” distribution model at the end
of January, instead moving towards a more flexible
system that will allow managers to assign more top
ratings within their teams.

The change will go some way towards boosting
morale within KPMG’s 19,000-strong workforce,
with several insiders saying they were shocked,
disappointed or upset by this week’s events.

Current and former KPMG insiders also said they
thought it was unlikely that Michael, who was
known for his brash, assertive and “old
school” management style, would return as
chairman.

Instead, they predicted internal jockeying for
position to replace Michael, with a female
successor being the most likely outcome. Potential
frontrunners include O’Connor, as well as
Michelle Hinchcliffe, UK chair of audit, and Lisa
Heneghan, chief digital officer.

Several senior male partners have also been
highlighted as strong contenders, including Chris
Hearld, head of regions; Jonathan Holt, head of
audit; and Tim Jones, the firm’s chief operating
officer.

Source - FT, UK

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