KPMG's incoming chief Bill Michael plans to shake up leadership team

Bill Michael

Bill Michael, who takes over from Simon Collins as KPMG’s chair from 1 October has shaken up the firm’s top team, bringing seven new members on to the executive committee, with tax, consulting and technology represented for the first time

The executive committee will be expanded from 11 to 14 members with three new service lines represented at the ‘top table’ for the first time – tax, consulting and advisory.

Reflecting the huge impact of technology on clients and the firm, a new role of head of digital transformation will also be created to oversee technology strategy from 1 October. Aidan Brennan, currently head of solutions and an executive committee member, will take on this wider remit, overseeing the firm’s technology strategy, as well as the bespoke technology we develop for clients.

There will also be a shakeup of audit with Michelle Hinchcliffe, currently head of banking, set to replace Adrian Stone from 1 October. Stone will step down from the executive committee at that time and will continue in a role as one of KPMG’s senior client-facing audit partners, handling major audit clients.

Michelle Quest, head of tax, pensions and legal services, also joins the executive committee. This will be the first time a head of tax has been on the senior exec board, giving the tax area of the business a bigger voice.

The leadership appointments also see the addition of two women partners to the senior executive leadership team at the firm, both responsible for critical service lines.

The changes at leadership level mark a recalibration for the Big Four firm, with recognition that global instability, technology and Brexit will all be major factors shaping the future of the firm and its client base.

Incoming chair Bill Michael is global head of banking at KPMG and has over 20 years’ experience in global corporate and investment banking, and also has an audit background, having trained with the Big Four firm in Australia.

Bill Michael, UK chair-elect and said: ‘Our ultimate goal as a profession is built around trust, we are re-evaluating what our purpose is and everything goes back to trust. The only way we can succeed is to nurture talent, it is about being capability led and market oriented. I’ve elevated a lot of our capabilities to have a voice on our executive. In terms of achieving our objectives, the best way is to bring wider skills on to the executive committee.

‘It is always going to be a matrix of product, geography and client. It is not only about national markets, but really leadership is about defining the profile of the UK firm globally.’

In an increasingly volatile world, Michael stresses that technology and digitisation will be key issues shaping the future development of the firm. ‘The important differential for us is the digital transformation role – the elevation of technology to the top table. Disruptive technology is going to bring enormous changes to the profession. This role encompasses digitising KPMG and gives us the ability to develop digitised services for our clients.

‘We are moving to a horizontal world, not a vertical world and that is a very different approach. Geopolitical change and technology are reshaping the way our clients do business. Brexit, Trump, nationality, is almost the opposite of the horizontal world; that is the paradox for companies.  

‘Take music; technology has totally changed the business over the last 10 years or so. Technology has no borders and this creates a very different risk profile. And it is going to impact the [audit] profession, especially the future of auditing data in real time, as well as technologies like Blockchain.’

The influence of data analytics will change audit and there are concerns that over-automation could affect quality and application of judgment decisions.

Michael is confident that technology will be a positive impact on audit. He said: ‘It is my hope and belief that it will improve audit quality; it is more likely that you will get data that is more consistent and less objective so that it becomes more comparable. That removes the judgment over the quality of the data. We do a lot of stuff around sampling but the samples are small; using larger samples means you could change the approach.’  

Bringing tax representation onto the executive committee is another sign of increasing concerns about regulatory reach and tax complexity. In the UK, the early adoption of a number of OECD Base Erosion and Profit Shifting (BEPS) measures, such as interest deductibility and the diverted profit tax, and the imminent introduction of loss relief reforms will all have a financial impact on companies, if only due to higher compliance costs.

‘BEPS and tax issues are extremely important for our clients and wider society, and the regulatory focus is going on to be on tax. The [regulatory] bar is increasing and we have to raise the bar too.’

The leadership team from 1 October 2016 largely remains the same as the existing leadership team, but now our consulting, deal advisory and tax practices have direct representation on ExCo. The role of International Markets & Government has been replaced by the UK Head of Financial Services and the UK Head of Corporates.

New additions to the executive committee are David Rowlands as head of consulting, Sanjay Thakkar as head of deal advisory, Jonathan Holt as head of financial services, and Dan Thomas as head of corporates.

Philip Davidson (managing partner), Jeremy Barton (general counsel), David Matthews (head of quality and risk), Iain Moffatt (head of national markets), Sarah Willows (chief financial officer and head of operations), Ann Brown (head of people), Karen Briggs (head of Brexit), and Aidan Brennan  (head of digital transformation) retain their existing roles.

Michael was elected by the firm’s partners on 2 March and will take over from Simon Collins, the firm’s current chairman, when his term ends on 30 September.

Report by Sara White, additional reporting by Pat Sweet

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