Annual report 2016: Chairmain's statement transcript

Katie Derham: So very nice to meet you.  You are recently elected, the elections were in April.  You are the new Chairman and Senior Partner.  How’s it been going these first few months?

Kevin Ellis: It’s been great.  The process itself is really interesting.  We had the chance during the election process to engage with all the Partners in the UK and the Middle East via hustings and manifestos to hear everyone’s views, to hear about the direction of what they wanted from the business and that was really energising and an exciting process.  Obviously, I feel a great responsibility and honour to be elected as the Chairman and Senior Partner and it is also a really interesting time, I think in the development of professional services of our firm and of the wider economic landscape.  So it is a very, very exciting time for me.

Katie Derham: So what are your priorities?  What did you get elected on?  What was your position?

Kevin Ellis: Well, I think the first thing is we are a client business and it is about being focused and helping our clients.  There is huge economic and global change going on.  Be it through technology, I’ll come back to that, but also through the politics of what has gone on with regard to Brexit and regard to the wider global economic change we are seeing to play a role alongside our clients and being able to make sure we are doing the best for our clients in these changing times and that will be good for us and that will be good for our business and our people.  There is also real change in terms of technology.  The kind of disruption that technology will create for all businesses but particularly for professional services is really interesting and our job, and I think my responsibility, is to ensure that we are seen as a technology enabled business.  Both in terms of how we deliver and serve our clients but also in terms of the new products we can create like cyber, like Skyval in the pension space that I think we will change how our clients see our brand and that will be, I think, a metric of my success. 

Katie Derham: You have already made some quite significant changes, right at the top.  Changes to the Board, tell us a little bit about the Board structure.

Kevin Ellis: It kind of goes to that change agenda.  We need to be agile, we need to react to the market place and the needs of the market place and also react to technology and the needs of our people.  I think a smaller Board makes that decision making and that conversation around the market place, technology and change, actually easier to do.  So I have shrunk the Board from 12 to seven and my Board is there to make those executive decisions, set the strategy.  I have also set up a Clients & Marketing Exec which will deliver that strategy and they’re the lines of service and the power around industries really comes together to oversee the implementation and execution of that strategy and remain really, really close to our clients.

Katie Derham: Let’s just take a moment to look back at the last year and the performance of PwC.  What have the highlights been?

Kevin Ellis: Well, we grew at double digits again.  To grow at over 10% is a fantastic achievement and that was the UK and Middle East businesses.  It certainly, if you had asked me back in about January/February I thought we would have even grown more than that but it slowed down certainly in the last quarter, driven by the uncertainly of the referendum.  So we kind of finished the year probably slightly less growth than we’ve seen in the first three quarters of the year, but again strong performances across all our lines of service, Consulting, Audit, Tax and Deals all saw strong growth and also saw opportunities to invest in new areas, invest in their own businesses and invest as One Firm across all our businesses.

Katie Derham: You mentioned Brexit.  Of course, the referendum was just a matter of weeks after your election.  What immediate changes did that mean for you and for PwC?

Kevin Ellis: I think it was a shock.  It was a shock, because I don’t think people expected the outcome.  We as a Firm have been very vocal.  We had actually done an economic assessment at what we thought would be right for the economy and right for our sector of the economy and our kind of considered opinion and the considered opinion of our economists was that ‘Remain’ would be the right thing.  After the result therefore, there was uncertainty and shock and you saw that in terms of our trading.  Our trading was slower in the last quarter coming up to the vote and straight after the vote there was uncertainty in terms of client’s reaction.  But I think we are through that.  I think you can see opportunity that change is going to create, both in terms of benefits for the UK but also benefits for our business and our clients as they adapt to that change.  

We are a very innovative country, we are a very innovative Firm.  We’re used to change.

Katie Derham: What’s the impact for the next year, going to be on recruitment?  What’s going to be happening with your people?

Kevin Ellis: We recruited 1,600 graduates and school leavers last year and over 2,000 experienced people.  So we’re a major recruiter and we don’t see that changing.  We need high quality people.  The world is changing, we always need talent and that is really important to us and I think it is really important to the economy that organisations like us are out there recruiting top talent and developing top talent.

Katie Derham: It has always been very clear that PwC sets great store by being seen as a responsible business, how do you define that?

Kevin Ellis: Well our purpose, the way we describe ourselves is our purpose is to solve important problems and build trust in society and that really underlines everything we do.  Whether it is in the Assurance practice and the Audit practice effectively ensuring that by giving our opinions on accounts we effectively underscore confidence in the financial systems, whether it’s our work we do in other lines of service where we make decisions that help investment, to help people decisions or help how tax is paid, all of those things are about ensuring the economy works well and ensuring people build trust and have trust in the numbers they are looking at or the decisions they are making.

Katie Derham: And you’ve created a Head of Corporate Purpose role presumably to drive that through.

Kevin Ellis: Both driving that through and looking at the wider communities and wider societies.  So we play a major role in that, I mean and our people expect to.  A lot of people join the firm with a wider interest in their local community.  So, I think last year over 72,000 volunteering hours were undertaken by our people, we think that’s really, really important.  It goes beyond just profit, it goes beyond just delivering revenue.  It is about making a contribution to the wider society.

Katie Derham: Tell me a bit more about the Assurance business.

Kevin Ellis: Well the Assurance business is the core of our business and the core of our brand.  You know we are continuing to see its importance in terms of how it effectively, as an Audit business it gives confidence in its opinion to both the clients and the wider market place and therefore it is important that we carry on investing in the quality, the way the technology enables it to deliver in an effective and efficient way and in the people and how we train our people.

Katie Derham: So what are you looking for during the year ahead?

Kevin Ellis: I think we are looking to make sure that we are absolutely alongside our clients in this time of change.  I think that’s going to create huge opportunities for our people in terms of the opportunities they’ll see, the change they will see.  This is a historic moment in the history of the UK, the Brexit moment and that will create all kinds of change and everyone will remember where they were when that happened and what were the consequences.  

As a leading professional services firm, working with clients, we need to be helping our clients deal with that and encouraging our people to learn from that and play a role.  So I think that is probably the most exciting thing in the very short-term. 

Katie Derham: Thank you very much Kevin for joining me and thank you for watching.  

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