Mid-tier firm challenger RSM names Rob Donaldson as CEO
24 Apr 2020
24 Apr 2020
At the start of the year RSM, ranked seventh in the Accountancy league table of top 75 firms, admitted in a footnote to its accounts for the year ended 31 March 2019 that a review of the accounting for professional liability claims provisions had identified an error in the application of group’s accounting policy affecting the 2018 and earlier year ends. This amounted to almost £10m over two years with a net £2.2m impact on profits.
In response, the firm removed three senior executives, including board members chief executive David Gwilliam and chief finance officer (CFO) Nigel Tristem, as well as chief operating officer (COO) Robert Ross from the management team. However, all three are still partners and members of the firm’s LLP, with Ross now heading up RSM UK Consulting.
An interim team was then put in place, consisting of managing partner Jez Filley as acting CEO, Andrew Westbrook as acting chief finance officer and Jill Jones as acting chief operating officer.
Following a 10-week long CEO selection process, the top job has now gone to Donaldson rather than any of the acting leadership, and there have been reports of tensions between the former management team and those who took their place.
In a statement, RSM said the appointment was taken at a general meeting, hosted by the board via an audiovisual link, ‘at which a comfortable majority of the shareholding vote voted in favour of Mr Donaldson as the partner best placed to lead the firm’.
RSM has confirmed that of the ten candidates who put their names forward for selection, four were women, one of whom was Jones.
Donaldson has been with RSM since 1990 and led its national corporate finance service line for the past six years and recently, the restructuring advisory business, and spent 20 years as head of mergers and acquisitions and private equity. Based out of the firm's London Farringdon Street headquarters, he has also been a member of the firm’s national leadership team for six years.
in an enthusiastic Donaldson said: ‘I’m delighted to be appointed as CEO. It is a privilege to not only be given the opportunity to lead this group of incredibly talented and ambitious people, but also to receive the clear backing from the partners and shareholders.
‘I am grateful to have received such a clear mandate to lead RSM UK into an exciting new chapter.
‘During this tremendously challenging period for all of us, our priority in the short term is to continue to carefully manage the wellbeing of our people, and to protect the business in the interests of our clients.
RSM has confirmed it is making use of the government’s coronavirus job retention scheme during this time of reduced productivity across the business, but has not revealed how many staff are to be furloughed. It will support those furloughed by topping up pay from 80% to 10% to ensure no one is financially disadvantaged in the short term.
Additionally, the firm’s equity partners have taken on average a 20% reduction since the start of April and deferred their drawings to conserve cash for the future of the business.
In a statement, the firm said: ‘We are looking to avoid redundancy measures. We continue to review our position.’
For the year ending 31 March 2019, RSM generated revenues of £335m.
Four days after Donaldson took up his new post, RSM UK announced the appointment of a new board, seven members of which take up their roles alongside the new CEO with immediate effect.
Kevin O’Connor is appointed executive chairman, bringing more than 30 years’ experience and 20 years as a senior partner with RSM, most recently in his roles as the firm’s national head of tax and regional managing partner for its North East and Yorkshire region.
Victoria Kirkhope is appointed to the board in her capacity as HR and development director, with responsibility for people, whilst David Punt takes up a new board position as head of ethics and group compliance.
The firm’s shareholder interests will be represented by two new roles described by RSM as 'critical to the future direction and governance of the firm'. Howard Freedman joins the board to represent the interests of all past and present partners within the firm’s shareholding group. Zoë Rudling is selected to represent the interests of the most recently promoted and recruited partners.
Simon Hart will represent RSM’s international interests to lead, strengthen and expand the firm’s global ambitions. Hart’s most recent roles as Brexit partner and head of knowledge management have involved spearheading a series of cross-border initiatives with an emphasis on pan-European, US and wider transatlantic relations.
Andrew Westbrook, whilst moving onto the board, continues his position as acting chief financial officer (CFO). He is the only member of the interim team named on the new board.
Donaldson said: ‘Navigating the business through the current market conditions remains our absolute priority, supporting the wellbeing of our people, providing insight and advice for our clients and protecting the business to realise our future opportunities.
‘For this reason, we are moving quickly to appoint these key roles that will be important to ensure swift and effective progress for our people, our clients and the communities in which we operate. We will now turn our attention to the wider senior leadership team, the regional teams, and the service lines and sectors that they serve. We look forward to making further announcements in the coming days.’
By Pat Sweet