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Terms of Reference of the Supervisory Board

09 Nov 2020

These Terms of Reference should be read in conjunction with the Members’ Agreement. In the event of any inconsistency or contradiction, the Members’ Agreement prevails.

1. Authority

The Supervisory Board (“SB” or “the Board”) receives authority from the Members’ Agreement of PricewaterhouseCoopers LLP. The primary purpose of the Board is to review, challenge and give guidance to the Management Board (“MB”) on matters which the SB considers to be of concern to the partners and having regard to the interests and wellbeing of the wider partnership as a whole and the UK firm.

The Board may investigate any activity within these Terms of Reference and, within its scope of responsibilities, to seek any information it requires and to ensure the attendance of management representatives at meetings as appropriate.

The Board has the authority to obtain outside legal or independent professional advice. The advisers may attend meetings as necessary and the cost of the advisers shall be borne by the firm.

2. Membership

The SB comprises of eleven members elected by the partners, the UK Senior Partner ex officio (or Acting UK Senior Partner ex officio), and those partners who have been elected to the board of PricewaterhouseCoopers International Limited (“PwCI”, also known as the “Global Board”).

Those elected to the Global Board are ex-officio members of the SB and are deemed as elected members in certain circumstances as set out in the Members’ Agreement.

Members of the SB are elected for a term of four years, with six of the twelve seats being filled every two years. There is no limit to the number of terms. Ex officio members continue as members while fulfilling the relevant role.

All partners are eligible to stand for election to the SB subject to exceptions which include any member of the MB, certain partners in management roles and members of various executive or leadership teams within the PwC Network. A partner elected to the Global Board who would be ineligible to stand for election to the SB is excluded as an ex officio member of the SB.

The Chair of the SB is elected by the members of the SB (other than the UK Senior Partner) from amongst their number. The UK Senior Partner is ineligible for election as Chair.

In order to perform their role effectively, each Board member should obtain an understanding of the detailed responsibilities of Board membership as well as the PwC business, operations, risks and regulatory environment. The members of the Board are:

  • Chris Burns, Chair
  • Glen Babcock
  • Kevin Ellis, UK Senior Partner, ex officio 
  • David Kenmir
  • Andy Key
  • Mary Monfries
  • Teresa Owusu-Adjei
  • Zafar Patel
  • Lorna Ward
  • Kenny Wilson
  • Kate Wolstenholme
  • Duncan Skailes, Global Board member, ex officio

The secretary to the Board is Philip Patterson.

3. Attendance of non-members at meetings

There are no standing attendees for the SB. Where appropriate, members of management may be invited to attend subject to agreement in advance of the meeting with the Chair of the Board.

4. Meetings

The Chair of the SB determines a rolling programme of ordinary meetings of the SB which must provide for at least four ordinary meetings in each calendar year. Additional meetings can be called at the request of the Chair of the SB, Deputy Chair, or at the request of any four members of the SB.
The SB keeps minutes of its proceedings and makes these available to the MB and the Public Interest Body (“PIB”).

The quorum shall be eight members of the SB. For any matters relating to the consideration of a Notice to Retire, as defined in the Members’ Agreement, the quorum of eight members of the SB must be present in person.

5. Responsibilities of the Board

A. General powers

The matters which the SB considers to be of concern, or potential concern, to the partners having regard to the interest and wellbeing of the UK firm and the partners as a whole include national, legal, regulatory and fiscal requirements, implementation of global policies and the arrangements for effective communications between the partners and the UK firm’s management. Other major powers include:

1. to determine and oversee through the Alliance Supervisory Board (“ASB”) the process for the election of the Alliance Senior Partner (“ASP”);

2. to determine how any meeting or ballot of the partners is to be called and conducted;

3. to initiate the process for a ballot for the removal from office of the ASP;

4. to review and challenge the firm’s strategy within the context of the UK Senior Partner manifesto;

5. to review and challenge the firm’s risk appetite and framework within the context of the firm’s strategy;

6. to approve the accounts on behalf of the members of PricewaterhouseCoopers LLP and adopt the accounts on behalf of PricewaterhouseCoopers United Kingdom Partnership;

7. to approve any statement made by the firm under the Modern Slavery Act 2015;

8. to test the reactions of a wider body of partners to particular matters and/or issues and/or proposals either on the SB’s own initiative or at the request of the UK Senior Partner, the MB or others;

9. to seek an effective dialogue between the SB and the Global Board to facilitate an effective working relationship;

10. to approve, if thought fit, transactions, commitments and arrangements outside the ordinary course of business of the UK firm; and

11. to refer to a decision of the partners, by a special majority, any matter involving, in the opinion of the SB, a significant change in the form or direction of the UK firm.

B. Financial matters

1. to approve the accounts drawn up in accordance with the accounting principles determined by the Executive Board (“EB”) (under delegated authority from the MB) on behalf of the members of PricewaterhouseCoopers LLP;

2. to adopt the accounts drawn up in accordance with the accounting principles determined by the EB (under delegated authority from the MB) of PricewaterhouseCoopers United Kingdom Partnership;

3. to approve the choice of auditor;

4. to approve changes to the capital requirements and drawing arrangements for partners as well as determining whether remuneration policies have been appropriately applied to partners; and

5. to approve the procedures for calculating each partner’s share of profits or losses and the equity interest of each partner.

C. Partner-related matters

1. to approve certain partner-related matters as recommended to them by the MB with responsibility for the management of partner-related matters. In particular, the SB is required to approve:

i. the involuntary retirement of partners

ii. placing a partner on ‘leave’

2. to approve the imposition of disciplinary penalties and other sanctions on partners as recommended to them by the MB or EB being a committee of the MB;

3. to approve certain partner-related matters as recommended to them by the Partner Matters Committee (“PMC”) being a committee of the MB with responsibility for the management of partner-related matters. In particular, the SB is required to approve the nomination of, and recommendation to partners of, candidates for partner;

4. to approve partners who retire from the UK firm to work overseas either as partner in, or employee of, an overseas firm and have a right of re-admission to the firm;

5. to constitute an appeals panel as required to hear appeals by partners against notices requiring them to retire;

6. to set up a Country Admissions Committee (“CAD”) in accordance with the firm’s Network Guidelines;

7. to determine procedures for the appointment of the Pensions Management Board and to appoint each of the members of the Pensions Management Board in accordance with such procedures; and

8. to approve proposals for changes to the Members’ Agreement and Partnership Agreement.

D. Operational matters

As a general rule, the UK Senior Partner or MB must consult the SB before putting any matter to the partners for approval or determination by a resolution or ballot.

Subject to limited exceptions, at least 10% of the partners in number may require the SB to put any matter to the partners for approval or determination by a resolution or ballot.

The SB is also required to consider a matter if requested to do so by not less than 10% of the partners in number.

6. Committees of the Board

The SB may delegate any of its powers or discretions to committees unless otherwise stated in the Members’ Agreement or Partnership Agreement.

The SB currently has four committees. Any such committee must consist of three or more members of the SB. The Risk Committee and Talent & Remuneration Committee currently includes one Independent Non-Executive (“INE”) in an ex officio capacity on each committee.

The committee chairs and committee members are nominated by the Chair of the SB and approved by the Board.

  1. Audit Committee (“AC”): the primary purpose of the AC is to provide assistance to the SB in fulfilling its legal and fiduciary obligations with respect to matters involving the accounting, auditing, financial reporting and internal control functions of the firm.
  2. Risk Committee (“RC”): The primary purpose of the RC is to review, on behalf of the SB, management’s risk framework, assessment and recommendations on enterprise wide risks including financial, operational and reputational risk.
  3. Talent & Remuneration Committee (“T&RC”): The primary purpose of the T&RC is to review, on behalf of the SB, the remuneration and oversee the talent development and where appropriate, succession plans for the T&RC population. The T&RC population is defined as the UK Senior Partner, members of the MB and any UK partners on the Global Leadership Team or EMEA Leadership Team.
  4. Partner Affairs Committee (“PAC”): The primary purpose of the PAC is to ensure all partners are treated fairly, which includes monitoring and overseeing the annual partner income moderation process, reviewing partner medical provision, development, changes to benefits, flexible working and diversity. It also ensures that appropriate processes and procedures are in place to provide robust governance for example on direct partner admissions, retired partner programme and involuntary retirements.

7. Appointment of key roles

The Chair of the SB is responsible for nominating key roles from amongst its members, and such appointments will be approved by the SB, specifically:

  1. Deputy Chair of the SB;
  2. SB representative(s) of the PIB;
  3. SB representative(s) of the Board of PwC (Middle East Group) Limited;
  4. Channel Islands Protector;
  5. Chair of CAD;
  6. Special Voting Right Holder (where the Chair of the SB is not audit qualified); and
  7. SB engagement and communications lead.

The Chair of the SB together with the representative member(s) appointed to the Board of PwC (Middle East Group) Limited will also have a seat at the Alliance SB.

The SB is also responsible for approving the INEs appointed to the PIB from candidates nominated by the UK Senior Partner, following consultation between the UK Senior Partner and the SB.

Approved: 9 November 2020

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UK Secretariat

London, PwC United Kingdom

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