Responsible leadership
Key to ‘doing the right thing’ is a leadership team with experience, energy and discipline – and a shared understanding of our goals. This is that team.
Managing the firm
PricewaterhouseCoopers LLP is a limited liability partnership. It is wholly owned by its members, who are commonly referred to as partners.
The Executive Board is responsible for developing and implementing the policies and strategy of the firm, and for its direction and management.
The Executive Board sets and communicates its strategic priorities, which cascade into the firm’s business planning process. The contribution of each part of the firm is monitored through scorecard reporting.
It is chaired by Ian Powell, whose term of office runs for four years from July 2008. The Chairman appoints the other Executive Board members, all of whom are partners in the firm.
Each board member has responsibility and accountability for a specific aspect of our business.
The Executive Board generally meets monthly, but also conducts formal business at additional meetings as necessary.
The Supervisory Board
The Supervisory Board, which is independent of the Executive Board, is elected by the partners. Its meetings are held monthly and are attended by the Chairman of the Executive Board, as an ex officio member. The three-year term of office of the current Supervisory Board ends on 31 December 2009.
The Supervisory Board provides the Chairman with guidance on matters of actual or potential concern to the partners. It is also responsible for approving the Annual Report, for recommending the admission of new partners, for overseeing the process of electing the Chairman and for checking that our policies on partners’ remuneration are being properly applied.
The Senior Management Remuneration Committee is a committee of the Supervisory Board. It makes recommendations to the Supervisory Board, which sets the Chairman’s profit share, and it approves the Chairman’s recommendations for the profit shares of the other Board members.
The Audit Committee is a committee of the Supervisory Board that has responsibility for reviewing the policies and processes for identifying, assessing and managing risks within the firm. It oversees the management of those risks, including financial control, compliance and independence. It also reviews the firm’s financial statements and considers the scope, results and effectiveness of internal and external audit, including reviewing the external auditors’ independence and any non-audit services and fees. The Chief Financial Officer and General Counsel, together with the internal and external auditors, attend the committee’s meetings by invitation. It met six times in the year ended 30 June 2009 (2008: five times).
The members of the Supervisory Board, all of whom served throughout the period, are:
Gerry Lagerberg*, Chairman
Pam Jackson, Deputy Chair
Mohammed Amin†
Clare Bolton*
Colin Brereton
John Dowty†
Roy Hodson*††
Gordon Ireland**
Mike Karp
Ron McMillan (to 30 June 2009)
Pat Newberry†
Ian Rankin*†
Duncan Skailes
Julia Smithies*
Graham Williams†
Ex officio member:
Ian Powell
* Senior Management Remuneration
Committee member
** Senior Management Remuneration
Committee Chairman
† Audit Committee member
†† Audit Committee Chairman
Managing risk
The Executive Board takes overall responsibility for establishing systems of internal control and for reviewing and evaluating their effectiveness. The day-to-day responsibility for implementation of these systems and for ongoing monitoring of risk and the effectiveness of control rests with senior management.
The systems, which have been in place throughout the financial year and up to the date of approval of these financial statements, include:
- The Risk Council, an Executive Board committee which is responsible for ensuring that the controls are in place to identify, evaluate and manage risk
- Our Lines of Service and our internal firm services, which maintain risk registers that document risks and the responses to them. They each carry out a risk assessment annually and report to the Risk Council on how effectively they have managed risk during the year
- Our internal audit team, which reviews the effectiveness of the financial and operational systems and controls throughout the firm and reports to the Executive Board and the Audit Committee
- Our risk and quality functions, which oversee our professional services risk management systems and report to the Executive Board
- The Compliance Policy Council, a committee of the Executive Board, which ensures that our policies and procedures take account of key regulatory and compliance requirements.
Furthermore, we have procedures to assess the risks associated with new clients, including whether they meet the expected standards of integrity. As part of the annual audit cycle, we conduct risk reviews of all audit clients, and decline to act for clients that, in our opinion, fall short of our standards.
Our internal control systems are designed to manage, rather than eliminate, the risk of failure to achieve business objectives or, in the case of financial controls, the risk of material misstatement in our financial statements. Accordingly, they provide only reasonable and not absolute assurance against such failure or material misstatement.
The Executive Board, in reviewing the effectiveness of the system of internal control, confirms that necessary actions have been or are being taken to remedy any significant failings or weaknesses identified in the review.
Maintaining quality
Our client, regulatory and public interest responsibilities demand that we consistently deliver reliable and high-quality work. Our approach to quality is supported by our Code of Conduct, which embodies our core values of excellence, teamwork and leadership. The key elements enabling us to maintain our reputation for quality include the following:
Quality people:
The quality of our work is determined largely by the quality of our people. Consequently, we aim to recruit, train, develop and retain the best and brightest.
Consultation:
Our consultative and supportive culture means that partners and members of staff are not left to take a difficult decision alone. Our people have ready access to wide informal and formal networks and technical panels that will help them reach the right solutions to difficult problems.
Building relationships
Glyn Barker, Vice Chairman, comments on the firm’s senior decision-maker programme, which brings together current and future leaders from the public and private sectors.
Quality procedures:
We have developed standard methodologies and work programmes for many of our services. These are designed to ensure that our partners and staff deliver work of the expected quality.
Quality assurance programmes:
Each Line of Service runs an annual quality assurance programme, in which independent teams of partners and staff review completed engagements to assess their compliance with our quality standards and regulatory requirements.
Learning lessons:
Our reputation for quality is high. Inevitably, given the size of our business, we do on occasion fall short of the standards we set ourselves. When this happens, we seek to discuss and resolve the issues with the client or other concerned party. We also review the matter independently for lessons learned and communicate those lessons to the relevant part of our business.
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