In May 2023, following a breach of PwC values and policies, Dr Ziggy Switkowski AO was commissioned by PwC Australia to conduct an Independent Review of Governance, Culture and Accountability. We also engaged external law firms to help investigate the firm’s handling of confidential Treasury information and related failures in professional, ethical or leadership responsibilities.
Recognising the need to provide a detailed account of the situation, this website sets out the Independent Review, PwC Australia’s Management Response and Action Plan as well as PwC Australia’s Statement of Facts, based on its investigation, undertaken with the assistance of external counsel.
“We are sorry. We take full accountability for our shortcomings and the culture in our firm that allowed them to go unchecked over time. From the top down, we are committed to rebuilding and re-earning the trust of our stakeholders. We are committed to learning, changing, and leading. This is our promise to our people, our partners, our clients and our communities.”
Kevin Burrowes,CEO, PwC Australia
Commitments to Change
For more than 150 years, PwC Australia has prided itself on the contribution we make to the Australian business sector, our people and our communities.
Yet, in January this year, the outcome of a Tax Practitioners Board (TPB) investigation threw that into question. It revealed behaviour we are not proud of – behaviour which does not meet our values and expectations, and behaviour that betrayed the trust of our stakeholders.
For that, we are deeply sorry.
What is clear is that under past leadership, the conduct that gave rise to the TPB matter was never adequately investigated by PwC Australia. We have now done what should have occurred from the beginning.
In May 2023, our new Management Leadership Team engaged external law firms to help PwC investigate what had gone wrong, and we commissioned Dr Ziggy Switkowski AO to conduct an Independent Review of Governance, Culture and Accountability.
Together, these investigations reveal shortcomings that should not have been possible at a firm like ours. It is clear that we did not meet our own expectations – much less those of our stakeholders – and that there was a failure of leadership, both by individuals and as a firm.
However, by identifying and accepting these failures, we begin to chart our path forward. We have listened, we are learning, and we will change.
Independent Review of Governance, Culture and Accountability
In May 2023, we commissioned the Independent Review of Governance, Culture and Accountability at PwC Australia. The Independent Review was conducted by Dr Ziggy Switkowski AO, and we thank him for his work. PwC Australia has accepted and will implement the Independent Review’s recommendations, as detailed in our Management Response and Action Plan. We know this is a critically important step to re-earn trust.
ASX Corporate Governance Principles and Recommendations provide a strong corporate governance framework and to the extent feasible, they will be applied to PwC Australia. This will include the appointment of at least three non-executives, including a non-executive Chair, and we will publish comprehensive, audited financial statements by September 2025.
Our Commitments to Change
PwC Australia’s new Management Leadership Team is determined to rebuild and re-earn trust.
Based on our reflections on root cause investigations and the Independent Review, we have developed five key Commitments to Change and a comprehensive Action Plan that provides a roadmap to becoming the leading professional services firm in Australia.
Our Updated Vision: To become the leading professional services firm, built on the highest ethical and professional standards with integrity at our core, a firm that delivers purposeful and sustained outcomes in everything we do.
1. Put our purpose and values at the core of everything we do
- Conduct a gap-analysis to identify a firm-wide target culture focused on restoring trust
- Undertake a program of work to embed desired behaviours to bring out our purpose and values each day
2. Increase the independence and effectiveness of our governance board
- Adopt the ASX Corporate Governance Principles where feasible
- Appoint at least three independent non- executives, including a non-executive Chair
- Revise the CEO election process
- Publish comprehensive audited financial statements
3. Improve the discipline and rigour of decision making
- Formalise the Management Leadership Team (formerly known as the Executive Board) as the enterprise-level decision making and risk management forum
- Enhance operating and decision making disciplines of the Management Leadership Team
4. Strengthen risk and conflict management and accountabilities
- Strengthen the voice and mandate of the central risk function
- Appoint an external CRO
- Uplift the rigour and transparency of our incident handling and conflict management
5. Embed a culture and practice of constructive challenge
- Further empower our people and partners to ask questions and challenge the decisions and behaviours of others within the firm
Actions we have taken to date
As an immediate response, we took a number of steps to enhance our governance, culture and accountability.
These changes included:
- The appointment of Kevin Burrowes as CEO of PwC Australia to lead the firm’s remediation.
- A reorganisation of the firm’s Management Leadership Team.
- Key changes to the Partnership Agreement to enhance the firm’s governance.
- The divestment of our federal and state government business to Australian private equity firm Allegro Funds.
In addition, as outlined in our Commitments to Change, we have taken the following actions:
- Committed to publishing audited financial statements by the end of 2025.
- Endorsed an industry-leading governance reform package, which is paving the way for the appointment of independent directors including an independent Chair of the firm’s Governance Board; will see a new process for electing the CEO; and the introduction of an income deferral mechanism for members of the Management Leadership Team, including consequences for behaviours discovered after partners have left the firm. In addition, the partnership has voted to elect six new members to its Governance Board whose term commenced 1 July 2024.
- Significantly improved our firm’s risk management processes and appointed a new Chief Risk Officer and Head of Compliance.
- Implemented a Client Committee to assess certain client engagements - this process is in addition to our existing, robust conflict management protocols.
- Strengthened our firm’s consequence management framework and continued to deliver ethics training and guidance on whistleblowing to support good decision-making founded on the PwC Code of Conduct.
- Completed a culture gap analysis, which informed our three-year strategy and our commitment to build a leading culture.
- Implemented a new Balanced Scorecard for all partners, which included a significant emphasis on non-financial measures in areas such as ethics and integrity, culture, client centricity and collaboration.
An independent monitor will be appointed to verify our progress.
PwC’s investigation into confidentiality breaches
Since May 2023, PwC Australia has been investigating, with the assistance of external counsel, the firm’s handling of confidential Treasury information and related failures in professional, ethical or leadership responsibilities.
Our Statement sets out the key issues examined in the investigation and is structured to address and answer the three questions that Dr Switkowski posed in his Independent Review – namely:
How did the breaches of confidentiality and conflicts happen and persist uncorrected for some years?
Have responsible parties been identified and disciplined?
What processes are now in place to minimise the possibility of any repeat of this experience?
PwC Australia accepts full responsibility for the historical misconduct that occurred in our Tax practice and notes that significant repairs have been made and will continue to be made to re-earn the trust of our stakeholders and clients.
Statement of Facts
Read PwC Australia’s Statement of Facts in full.
Further information provided to the Senate
Following Kevin Burrowes’ appearance at the Senate in February, PwC Australia asked PwCIL for further information about the International Review. In its response, PwC International provided additional information elaborating on the purpose, process, and outcomes of the Review.
PwC Australia has sent this document to the Australian Senate, along with a document from PwC Australia outlining its commitment to cooperation with the Senate and regulators. Both documents are available below.
PwC Australia’s cooperation with the Senate
Read about the firm’s commitment to engaging cooperatively with the Australian public.
Additional information about PwC International Review
Read the additional information pertaining to the International Review provided to PwC Australia by PwC International.
