Updated: KPMG chair resigns after staff revoltby
KPMG UK chairman Bill Michael has now resigned following accusations that he told staff to "stop moaning" about the pandemic and continuing lockdown and to stop "playing the victim card".
Updated 12 February 2021 – KPMG official statement:
KPMG confirms resignation of Bill Michael
KPMG UK confirms that Bill Michael, its Chair and Senior Partner, has resigned and will leave the firm at the end of this month.
Bill Michael said: “I love the firm and I am truly sorry that my words have caused hurt amongst my colleagues and for the impact the events of this week have had on them. In light of that, I regard my position as untenable and so I have decided to leave the firm. It has been a privilege to have acted as Chair of KPMG. I feel hugely proud of all our people and the things they have achieved, particularly during these very challenging times.”
In line with the firm’s governance protocols, Bina Mehta, as Senior Elected Board Member, has stepped in as Acting Chair of the Board and Mary O’Connor, Head of Clients and Markets has assumed Bill’s day-to-day Executive responsibilities as Acting Senior Partner.
Bina Mehta, Acting Chair of the Board of KPMG UK said: “Bill has made a huge contribution to our firm over the last thirty years, especially over the last three years as Chairman, and we wish him all the best for the future.”
The firm will undertake a leadership election in due course.
KPMG has announced that chairman Bill Michael is stepping aside while the Big Four firm investigates allegations of telling staff to stop complaining about the pandemic during a video meeting.
According to the Financial Times, which originally reported the allegations, Michael reportedly told staff to "stop moaning" about the impact of the pandemic and lockdown and to stop "playing the victim card".
The meeting included 1,500 staff – a third of KPMG’s consulting team, all of which he included in an email at the end of the call apologising for his comments.
“I know that words matter and I regret the ones I chose to use today,” emailed Michael. “I think lockdown is proving difficult for all of us. I am very sorry for what I said and the way that I said it.”
KPMG has now opened an “independent investigation” into the allegations.
“Mr Michael has decided to step aside from his duties as chair while the investigation is underway,” commented a spokeswoman. “We take this matter very seriously and will not comment further while the investigation is ongoing.”
KPMG board member Bina Mehta is will step in as interim chairman, and will be KPMG UK's first female leader.
Staff complain anonymously through app
Many KPMG staff present complained of his poor conduct through an anonymous posting app during the meeting. Two meeting members reported him telling staff he would be seeing clients in person, despite lockdown rules and rejected unconscious bias as “complete crap”.
“He literally said, ‘I know I’m breaking the law’ to meet up with people during the pandemic,” a participant commented.
“There’s no such thing as unconscious bias?! Are you joking? Please do your research before just making such statements. Check your privilege,” stated one post.
“Did Bill Michael say unconscious bias is just crap? Herein lies the issue. Whilst the training may not be effective, to say it doesn't exist is just reckless,” said another.
Many staff were disappointed in Michael's suggestion that staff should stop complaining and work harder.
Others were allegedly upset over his dismissal of staff concerns about potential staff bonus cuts, pay and pensions. Michael had also been hospitalised with confirmed Covid in 2020.
Comments come after poll showing staff struggling
What is curious, is that Michael’s comments came after the meeting’s opening staff poll which showed the consultants were struggling to cope during the pandemic.
“I am sorry for the words I used, which did not reflect what I believe in, and I have apologised to my colleagues,” Michael later responded. “Looking after the wellbeing of our people and creating a culture where everyone can thrive is of critical importance to me and is at the heart of everything we do as a firm.”
KPMG will not confirm whether Michael’s pay will cease during the investigation. He was paid £1.7m in 2020, even after a 14% pay cut – and nearly £2mn in 2019.
The boss is reflecting the macho corporate culture prevalent in big accounting firms.
Rather than berating staff, KPMG and the Big Four need to concentrate on improving audit quality. Alas there is little sign of that as persistence of dud audits does not result in firm closure.
— Prem Sikka (@premnsikka) February 11, 2021
No sympathy for employees
“Over 50% of us on this call have just said we are either ‘hanging in there’ [or] ‘drained’. I’m left incredibly unimpressed by the comments from our leadership,” an employee posted anonymously via the app.
“Many junior employees [have been] unable to see loved ones for ages and living in cramped quarters. Where is the empathy from leadership?” said another.
“People are struggling with serious mental health issues and having our [leaders] tell us to shut up and pull ourselves up by our bootstraps is heartbreaking.”
Toxic work culture
This incident is not the first time KPMG has come under fire for having a toxic work culture. In 2019, two female partners quit KPMG over the alleged bullying conduct of a male partner.
KPMG was accused of mishandling the incident, failing to dismiss the partner and ordering him to apologise to the affected employees and undertake leadership coaching.
— Grant Feller (@grantfeller) February 11, 2021
Meanwhile, Matt Portt, the founder of Portt and Co, told AccountingWEB: "This type of archaic leadership shows how out of touch some of the larger firms are with today’s workforce. No longer will people tolerate being treated as a commodity.
Portt and Co recently committed to becoming a B Corp to demonstrate how the firm values its people the same as profits. "We understand that if a firm does not value its people, its people will not value the clients of the firm and client service suffers."