#MeToo and beyond: Deloitte leads major culture change at Big Four
At the end of last year, Deloitte became the first of the world’s Big Four accountancy firms to go public on the number of senior staff that exited due to inappropriate behaviour. Deloitte’s chief executive, David Sproul, told the Financial Times around 20 UK partners left the firm between 2014 and 2018 over behaviour that included bullying and sexual harassment. ‘We will fire people for any inappropriate behaviour,’ he said. ‘No one is protected.’
Tough words from the CEO of one of the country’s four biggest auditors, and the move focused attention on the rest of the Big Four. Within days of Sproul’s announcement, KPMG revealed that seven partners had exited the firm and EY revealed that five had left due to inappropriate behaviour between 2014 and 2018. PwC reported it had let five partners go for similar reasons from 2015-2018.
These headline figures were shocking. What was less obvious, however, was that this very public airing of Deloitte’s dirty laundry was the culmination of the firm’s concerted efforts to tackle cultural issues that had long prevented women from ascending its ranks to partnership.
Emma Codd, a financial advisory partner at Deloitte, took over the role of UK Managing Partner for Talent in 2013. She says it was clear that that the firm’s gender balance was inadequate. ‘At that time, just like many law firms, we had this big challenge on gender, but we were also getting fewer women in through the door in the first place,’ says Codd. ‘Whereas many law firms are 50:50, we were down at 36% female. Then you would see this gradual drop at manager and senior manager, which is the firm’s equivalent to an experienced associate and senior associate level.’
After holding a series of listening groups in 2014 and early 2015, Codd says the overriding takeaway was that a range of inappropriate behaviour within the firm was driving employees, particularly women, away. Culture was at the heart of the problem, so Codd knew tangible changes were necessary. In 2015, Deloitte rolled out an intense training programme of more than 90 mandatory, two-hour sessions. Around 20 employees attended each session, organised by peer group, spanning partners, directors and senior managers.
It might take the legal sector a bit longer to get to where they are, but we are looking at what changes they implement and seeing how we can learn from them
Sophie Breuil
Head of Diversity & Inclusion, CMS
Storytelling became an effective tool to get the message across that establishing a respectful working environment was paramount, and that senior staff must lead by example. ‘You can control the way you speak to somebody, you can control the way you interact with them and you need to understand what is right and what is wrong,’ says Codd. ‘You need to know that if you don’t behave in a way that is expected, there will be a penalty.’
Training isn’t a panacea of course. Deloitte also created ‘respect and inclusion ambassadors’ to provide employees with a ‘safe route’ to voice concerns and signpost them to sources of support. Initially, these were partners and directors, but it’s now being piloted at more junior grades. Deloitte’s existing ethics hotline was broadened, refresher training sessions took place in 2018 and digital training has been rolled out across its 18,000 employees worldwide.
Codd says this approach, combined with the unwavering vocal support of Deloitte’s CEO and senior management, has paid dividends from a gender perspective. In 2014, only 13% of the auditor’s partners were female. As of 1 June 2019, that figure has jumped to 21%. Of the 78 partners promoted in the UK, 32 – equivalent to 41% – were female. This is three times the number of women promoted to partnership in 2018 and Deloitte’s work in this area earned it the Gender Equality Award at the 2019 Business in the Community’s Responsible Business Awards. ‘I don’t think any of that would’ve been possible if we hadn’t focused on culture,’ says Codd. ‘We’re living proof that it’s the right thing to do and of the impact that it can have.’
Looking back to December 2018, Codd, who has since been promoted to Global Special Advisor on Inclusion, says the public reporting was a necessary and significant step to the whole process. ‘When someone is exited for various reasons you don’t shout it from the rooftops – so the disclosure showed our people that we are following through on these issues; that we take it seriously and will take action where warranted. It’s also led to others disclosing, which is a very positive thing.’
Such disclosures have also stepped up pressure on the industry’s regulator, the Financial Reporting Council. In July, the watchdog called on the biggest players to report quarterly on complaints of bullying, sexual harassment and alcohol or drug abuse within their firms.
Reports of workplace harassment are increasingly common in the legal sector. The Solicitors Regulation Authority (SRA), which regulates solicitors in England and Wales, received 38 complaints of sexual misconduct by a regulated person between November 2018 and August 2019.
Like auditors, law firms, including their senior management, must show true commitment to tackling these issues, says Chris Watson Co-Chair of the IBA Diversity & Inclusion Council. ‘Any window dressing where sufficiently important people are not subject to the rules is really dangerous,’ he says. ‘That’s when you find out whether people are sincere about this or not.’
Historically, auditors’ more linear managerial structure has been more conducive to change than law firms’ partnership models. However, Sophie Breuil, Head of Diversity & Inclusion at CMS, says the legal profession is taking note. ‘We’re taking good ideas, no matter where they’re from and auditors have a lot of them,’ she says. ‘It might take the legal sector a bit longer to get to where they are, but we are looking at what changes they implement and seeing how we can learn from them.’
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