Building the iconic firm
We have held our nerve through a difficult economic period and focused on staying close to our clients. We have balanced taking the right decisions now with making investments for the medium and long-term future success of our firm.
Strategy and vision
The Executive Board set out our strategy and vision as we began to enter the current economic downturn. That strategy remains true. We aim to be a powerhouse of a commercial organisation that does the right thing for our clients, our people and our communities. We have a culture and reputation for doing the right thing even in the most difficult circumstances, and we will continue to lead the profession expressing distinctive views on key issues.
Economic downturn
This has undoubtedly been a difficult period for our clients and a challenging period for our own firm. Nobody could have predicted the events we have witnessed over the course of the last year. What started as a financial crisis, stemming from problems in one corner of the US mortgage market, has spread to become a global economic crisis with far-reaching business consequences.
My priority and that of the Executive Board has been very much on keeping our people working and focused on continuing to develop sustainable relationships with our clients – many of whom have needed us in these tough times and have looked to us for our support. My career has spanned three significant downturns and I know that it is during such periods of uncertainty that the strongest and most enduring client relationships are formed.
The effect of the downturn and the strength of what I call our ‘one firm’ proposition were typified in what has to be the iconic appointment of the year. In September 2008, PwC was the clear choice for the Lehman Brothers administration, not just because of our experience in complex administrations, but also because of our unrivalled financial services expertise and international reach. We have shared with you the details of this extraordinary assignment later in this report. I am very proud of the professionalism and commitment of all PwC partners and staff who supported the PwC team at Lehman and helped to make such significant progress saving jobs and unlocking funds in perhaps the most complicated administration ever undertaken anywhere in the world.
To ensure we do the right thing we measure our business performance by these key performance indicators (KPIs).
Client experience
People experience
Sustainability and community
More about our sustainability and community strategy
Financial
- Figures based on a client poll to assess their view on how well we engage with them.
- A new client feedback programme was started in Jan 2008 which now reports on a full year. Previously it report on six-month periods.
- Figures based on youmatter survey.
- Numbers to and including 1 July 2009.
- CO2 figures based on Defra guidelines April 2008. Prior year air travel figures have been restated to conform with the current year presentation to reflect improved data collection.
- Prior year analysis by line of service restated to conform with the current year analysis.
Investing in our business
Notwithstanding the turbulent economic backdrop, it has been an exciting and transformational year for PwC.
We believe it is vital to accelerate our investment to ensure we come out of this recession even stronger than we came into it. One such area of strategic investment and future growth opportunity is sustainability, particularly in the financial services sector, as it seeks to rebuild trust and confidence.
'In September 2008, PwC was the clear choice for the Lehman Brothers administration, not just because of our experience in complex administrations, but also because of our unrivalled financial services expertise.'
In December we acquired Sustainable Finance Limited, an international advisory firm with a focus on financial services and a reputation for advising on mega trends such as climate change and carbon emissions. We now have over 70 sustainability professionals in the UK, and a total of 800 globally in the PwC network, providing both the strategic expertise and delivery capability to help clients understand and act on the extensive business opportunities arising from sustainability issues.
Another significant acquisition was that of the reward consultancy Halliwell Consulting, providing advice on executive remuneration and share schemes which complemented our existing team and capability in this area.
In May, we formed a strategic alliance with our network firms in the Middle East. The region offers some of the most significant growth potential anywhere in the world, both for PwC and for many of our clients. We can bring investment, particularly in terms of people and experience, to enhance the Middle East firms’ capabilities in key sectors, such as government and financial services, and in key geographies such as Saudi Arabia, Abu Dhabi and Qatar.
I believe this is very good news for our clients, and for PwC partners and staff in the Middle East and in the UK, as we strengthen our ability to serve our clients with even wider resources and greater specialist expertise.
Investing in our people
In line with our growth strategy, we have continued to recruit across all grades from graduates to partners in 2009. We believe our decision to recruit, for example, more than a thousand graduate trainees this year is vital for the long-term viability and success of our firm.
For the sixth year running, PwC has come top in The Times Top 100 Graduate Employers survey and, perhaps unsurprisingly given the climate, applications for our graduate positions are up 48% on previous years. I’m also particularly pleased to report that for the first time this year, PwC was named finance sector graduate employer of the year in The Times High Fliers survey. It’s the first time a professional services firm has won the category, which is normally the preserve of investment banks. PwC also claimed top spot for Accountancy in the same survey, for the 10th consecutive year.
I was also delighted that Britain’s Finance Directors voted PwC as their Large Audit Firm of the Year in the Real Business Awards, a well-deserved recognition of the commitment to excellence and client service in our Assurance practice.
Over the course of the year, we have admitted a total of 21 direct-entry partners, each with exceptional talents and commercial expertise. And we continue to develop talent from within, having made 32 partner promotions on 1 July 2009, and with our Emerging Leaders programme for high-potential managers providing both stimulus and opportunity for our next generation of partners.
'Our role in the community is important to PwC and an area of deep personal interest for me. Through our PwC in the Community programme, we contribute time, expertise and resources while offering opportunities to all our people to gain new skills and personal fulfilment.'
Community
Our role in the community is important to PwC and an area of deep personal interest for me. Through our PwC in the Community programme, we contribute time, expertise and resources while offering opportunities to all our people to gain new skills and personal fulfilment. We continually look for different and impactful ways to do this, for example our long-running and successful annual pantomime, which combines a huge community affairs programme with an innovative leadership development initiative.
Our community affairs programme has been running for over 15 years. A fundamental part of this commitment is the way our people volunteer to be involved. During 2009, 4,600 (2008: 3,700) of our staff across the country donated over 41,300 (2008: 40,900) working hours to a wide range of activities which focused on education, employability and the environment, in addition to their own personal volunteering efforts. Our total community contribution – including cash, time and in-kind support – amounted to £7.9m (2008: £6.8m), and we are proud to be one of the first UK businesses to have achieved the CommunityMark accreditation. We are determined to build on this success in the future and will look to combine our business expertise with our commitment to the communities in which we live and work.
Sustainable investment
Sustainability is as important to our clients as it is to PwC. So to ensure that we continue to provide advice on the very latest approaches and best practice, the past year has seen heavy investment in our Sustainability & Climate Change (S&CC) practice.
Sustainability
Sustainability is increasingly a major consideration for all businesses, including our own. We are in the process of integrating corporate sustainability into all aspects of what we do – ranging from the advice we give to clients, to our contributions to public policy, being a great place to work, minimising our environmental impact and working with our suppliers and local communities.
Ahead of the G20 summit held in London in April this year, PwC took a leading part in the World Economic Forum meeting looking into low-carbon economic prosperity. The firm joined 52 companies and 32 experts in forming a taskforce to work with government and UN offices to develop a set of practical projects and policy proposals to stimulate the low-carbon economy from 2010 onwards. The key difference with this taskforce is that it intends to be very focused on the practical, with pragmatic recommendations that we in business can and should all support.
Internally, PwC’s own sustainability strategy and performance was recently independently assessed and recognised for outstanding environmental performance in The Sunday Times Best Green Companies list, and the firm has also recently received environmental certification ISO 14001.
Audit quality
PwC’s reputation is built around independence and integrity. Past experience tells us that audit quality comes under most intense scrutiny during and immediately after economic downturns. We recognise the public interest responsibility vested in our audit practice and we take an uncompromising approach to audit quality based around our core values of excellence, teamwork and leadership. We recruit and train exceptionally talented people and offer them a supportive and consultative culture with strong leadership, underpinned by quality procedures and effective quality assurance. We publish a separate transparency report, which sets out in greater detail our approach to maintaining audit quality.
Taking responsibility
I believe PwC as market leader has a responsibility to play a prominent role in those debates that will shape the future business landscape. Over the past 12 months I have shared our views on matters ranging from the future regulatory landscape for the financial services sector to the case for a consistent approach to fair value accounting and the need for personal responsibility in business leadership.
Looking to the future
Looking forward, I’m confident we have the people and collective sense of purpose to continue our firm’s success.
By remaining true to our vision of being a powerhouse of a commercial organisation that does the right thing for our clients, our people and our communities, I believe we have already made significant progress towards delivering our goal of becoming the iconic firm.
Thank you to our clients and our people for their support this year.
Ian Powell
Chairman
The day after tomorrow
What began as a crisis for individual markets and institutions has now undermined the foundations of the entire global financial system.
The day after tomorrow is PwC’s thought paper on how the financial services industry will adapt to its new world with significant changes to its traditional models. The paper analyses the emerging themes as the fallout from the crisis continues and financial services providers grapple with a new environment.
Bookmark with: