Video transcript: Kevin Ellis speech

Transcript

Samira Ahmed, journalist, BBC:

Before we have the awards, who better to tell us what leadership and building trust involves in an uncertain and fast-changing world but Kevin Ellis, PwC UK chairman and senior partner. Please welcome Kevin Ellis.

Kevin Ellis, Chairman and Senior Partner, PwC: 

As you know, the scandal of Enron took place two decades ago, and the global rapid collapse of that organisation led to that organisation’s name being synonymous with mistrust. On the back of that, we saw a tsunami of legislation on corporates and business to create more transparency and trust and to avoid the same happening again.

There is no doubt the transparency has taken place, but has the trust improved? To explore that, it is worth looking at another issue that was set up about the time of Enron. That is the Edelman Trust Barometer. This barometer is a survey that takes place annually across 36 countries, involving 28,000 people looking at what cohorts are trusted and why. Regularly, over the course of Edelman Trust Barometer’s outcomes, business is the most trusted cohort. The cynics amongst you will say that is faint praise when the other cohorts are the media and politicians.

If you then look at the polarisation that attaches in that survey to media and politicians, you compare it to business and dig further, the other factor that comes out is that both employers and NGOs are seen as a unifying force in society. They are unifying because they create the melting pot of geographies, generations and different backgrounds amongst their employees that is akin to the communities that existed in yesteryear.

Like their communities, employees expect more than just jobs, wages and taxes; they expect their employers to make commitments and to speak up on issues that matter to them: the environment, ethical sourcing, and diversity and inclusion. As that challenge has been put to those employers over the last decade, we have increased the number of categories that will be covered in our awards to reflect how NGOs, the public sector and the private sector have responded to that challenge. When we see the shortlists from the past decade, similar companies and similar organisations, that shows us how they are responding to that demand from their employees.

Of course, nothing is risk free. As you respond to that demand, more demands and promises are made. As a leader, as you commit to those promises and outcomes today, you are committing generations to come behind you. They might not want to live up to that commitment, or they might want to change or miss that commitment. If they do that, they damage the trust you are trying to create.

I see that as a leader of PwC. In conversations with other leaders in the public and private sectors, it comes up regularly. It is safer to ensure that those promises and pledges you make are closely aligned to your strategy rather than in addition or as a tension to it. Take a business like mine. We employ 24,000 people. Roughly 4,000 people join every year and roughly 4,000 leave. When we speak to you, our clients, your feedback is consistent. You want people with competence and experience, but you also want people who will work seamlessly with your teams because they have similar values and backgrounds. You want people who fit in.

Therefore, diversity and inclusion, for us, is not just a societal good – of course it is – it is an economic necessity. What we have learned over time is that, if you are trying to attract the volume of talent that we need to be successful, you have to be able to reach out to that talent. You have to evidence and effectively advertise your diversity and show you are an inclusive place they should and would want to work at.

The way we do that is, every year, we produce a digital annual report. In that digital annual report, we set out our gender pay gap, ethnic pay gap and Black pay gap. We explain where we are on the journey. You will not be surprised to know that, because it is a digital annual report, you can see what is read. Unfortunately, it is not my pithy explanation of the year as the Chairman. It is actually the diversity and inclusion statistics that our potential school leavers, graduates and future employees read.

That comes to some of the challenges. You can pull the data out there to be transparent, but, if you do not do the ‘what’ alongside it, people misunderstand. I remember, back in 2017, we put out our ethnic pay gap out there for the very first time. It was embarrassing; it was 13%. Within half an hour of us putting that out there, my daughter, who was 15 at the time, texted me to say, ‘Dad, are you really paying ethnic minorities 13% less than the rest of your people?’ The complexity of the pay gap and how that works was lost on her, but we did not help that because we did not put the explanation alongside it.

If I look at the gender pay gap today for our whole firm, it is 5.9%. It has come down, and it is moving in the right direction. When we include partners, it is actually 10.3%. It has got higher over the last year. As we have brought more female talent into the partnership at the lower levels, it pushes that out in the short term. Again, unless you make that explanation, I can assure you that the narrative that is written for you is not positive. That damages our chance of attracting the talent we need to attract in the future.

Another time we had a challenge was the Christmas before last. Every year at Christmas time, as a board, we take the decision to give all our staff an extra day off at Christmas. The Christmas before last was 2020. We were balancing between lockdowns and not lockdowns. We thought, ‘This Christmas, let us not have the day off at Christmas. Let us leave it until the spring’. Unfortunately, ‘Leave it until the spring’ was not covered in any of our narrative with our staff. That headline then appeared in The Sunday Times. That was not one of my career highlights, I have to add, but there you go.

All of that issue around telling the story, the ‘what’ and the ‘why’ is unfortunately going to get a lot harder. We all know that the headwinds of inflation and recession are coming at all companies. Those very same companies that have made these promises and pledges are now going to have to deal with issues that their stakeholders are going to find tough. Again, if they do not put the ‘what’ and the ‘why’ alongside those actions, someone else will write the narrative for them, and it will not be positive one.

Going back to what I said at the start about Edelman, if employers are not a unifying force in society, who will be? If there is one thing that we all need at the moment, it is a unifying force. Thank you very much.