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Pw Cglobal Annual Review 2010

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  • 1. www.pwc.com/annualreview Building relationships. Creating value. Global Annual Review 2010Reviewing 2010, lookingforward to 2011
  • 2. The PwC network North America and the Caribbean 37,643 people Western Europe 57,702 people 154 Global Middle East and Africa 10,033 people countries 766 South and Central America 10,428 people locations PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See pwc.com for more information. In this Global Annual Review we look at issues that impact PwC clients and people around the world, and we examine our performance, our key network policies and standards, and our work in the global community during FY 2010.
  • 3. ContentsPwC people161,718 Chairman’s letter Clients 6 2 People 12Central and Eastern Corporate Responsibility 18Europe6,837 Transparency 26people Facts and figures 32 Asia 32,225 people Australasia and www.pwc.com/annualreview Pacific Islands In this Global Annual Review, the terms 6,850 PricewaterhouseCoopers, PwC, our and we are used to refer to the network of member firms of people PricewaterhouseCoopers International Limited (PwCIL). Each member firm is a separate legal entity and does not act as an agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firm’s professional judgment or bind another member firm or PwCIL in any way. FY 2010 runs from 1 July 2009 to 30 June 2010. Global Annual Review 2010 1
  • 4. Chairman’s letterValue in the worldDennis M. NallyChairman,PricewaterhouseCoopers InternationalDennis M. Nally was elected Chairmanof the PwC network for a four-year termbeginning on 1 July 2009. He joinedPwC’s Network Leadership Team in2008. From 2002-2009, he was SeniorPartner of PwC US. He joined PwC in1974 and became a partner in the USfirm in 1985.2 PwC
  • 5. FY 2010 US$ 26.6 billion revenues in FY 2010 26.6 bn We know that the PwC network is at developed nations, and falteringDear friends and its best when we listen closely to our consumer confidence have all clients, understand their goals and contributed to sluggish conditions.colleagues, collaborate with them in creating Forecasters predict a ‘two-speed’ value. The same goes for our people scenario for the future. For the rapidly – we want to create an experience at developing economies, primarily the PwC that encourages them to realise BRICs (Brazil, Russia, India and China), their potential and create their own the recovery has taken a firm hold. personal value. Meanwhile the economies of the That is our brand promise – building mature industrialised nations seem relationships that help clients and people stuck in a lower gear. Despite these create the value they want – and we are disparities, the economic fortunes of continually looking to intensify our efforts the emerging and developed economies to deliver and validate that promise. remain closely intertwined. We are seeing the pace of globalisation accelerate That is why, for the first time in 12 years, to pre-recession levels and expect we have changed our brand. We’re excited cross-border activity to increase as about our new look, but of course brand clients continue to seek new markets is much more than visual identity – it is and pursue cost savings. what we do to bring the PwC brand to life in the market that really matters. Without question, the state of the global economy has also altered the One of the key elements of the PwC brand business environment for PwC. that we live every day is independence Competition, always fierce in our markets, of mind. Independence, and the straight- has sharpened, and the economic crisis talking that goes with it, are critical to has heightened the need to provide our role as auditors but they also infuse clients with consistent, top quality every part of our business and the value services across the PwC network that we provide. Because we embrace add value to their business. independence we strive to provide our best advice even in cases when that Results advice is uncomfortable or contradicts Despite these tough conditions, PwC’s conventional wisdom. Critical thinking aggregate global results for FY 2010 and balanced, independent judgements were up slightly compared to last year. are the foundations on which we build our relationships. As in the economy at large, PwC firms in different geographic markets are Economic environment recovering from the downturn at varying The uncertainty of the current economic rates. Firms in the emerging market environment clearly demands a countries showed renewed growth, sharpened focus. For many businesses, with PwC firms in Korea, Mexico and the long-anticipated economic recovery China in particular reporting boosts in remains frustratingly elusive and our activity. Revenues in many developed expectation is that overall global markets also picked up, although at a economic expansion will continue to more modest rate. PwC firms in Spain, be slow at least through FY 2011. the UK, Germany and Canada each reported returns to growth. But revenues Fears of renewed fiscal crises, high dipped slightly for the PwC US firm. unemployment rates in the most Global Annual Review 2010 3
  • 6. Our brand promise: Building relationships that help clients and people create the value they want PwC’s Advisory practice rebounded PeoplePwC firms are among the well to grow by 7.9 % over last year in The global economic crisis also a very tough, competitive environment. highlighted lessons to be learned fromlargest graduate recruiters The consulting business grew strongly, a people perspective. When companiesin the world. Our future up 15%, despite the continued cut headcount and scaled back spending,absolutely depends on our slowdown in the market for advice on they were often unable to move talent deals. Advisory now accounts for US$ around quickly. For some organisationsability to continue to attract 6.2 billion of PwC’s aggregate revenue, this led to layoffs to save cash at oneand retain talented people and we expect its growth to continue extreme, but also left crucial ‘talentwho are committed to both organically and through strategic gaps’ at the other. acquisitions in markets where wehelping clients and PwC choose to compete. Fortunately, for the most part, at PwC wefirms achieve their goals were able to anticipate this development. Revenues in our Assurance and Overall, we held the course in anticipation Tax practices, both the world’s largest of the upturn, and are optimistic this in their markets, held up well. A rise strategy will yield benefits in 2011 and in demand for Assurance services was for the longer term. more than offset by pricing pressures. Tax revenues improved as the year PwC is committed to providing people progressed, despite a slowdown in with opportunities to achieve the full corporate deals and restructuring work. measure of their professional and personal potential. To do so, we must Overall, we believe our results are continue to develop cultural dexterity, a creditable achievement. Key to this working across multiple dimensions success has been the progress we are of our workforce diversity. The global making in improving coordination economy requires matching people across our global network – again with the right skills with client needs with the overriding goal of bringing regardless of borders. More than ever we added value to our clients. In this effort, seek to provide people with opportunities I’m thankful for the collegial spirit of outside their home countries, benefitting the other members of the PwC Network both clients and peoples’ careers. Leadership Team who also serve as senior partners of PwC firms: Bob Moritz Collectively, PwC firms are among the (United States), Ian Powell (United largest graduate recruiters in the world. Kingdom), Norbert Winkeljohann Our future absolutely depends on our (Germany) and Silas Yang (China). ability to continue to attract and retain talented people who are committed to helping clients and PwC firms achieve their goals. If talented people do not reach their potential, they will look elsewhere.4 PwC
  • 7. Thus we focus on people’s careers with change by repositioning the profession Futurethe same intensity we apply to meeting to better meet the needs of investors, With the strongest network and theclients’ needs. recasting the financial reporting model best people, PwC is uniquely positioned for better access and understanding. to work with companies of all sizes asIn FY 2010, PwC firms were recognised they manage through these uncertainby numerous external media organisations Today accountants and auditors face times and create the value they want.for their innovative, best-in class human a rapidly changing global regulatory It is demonstrated in the performanceresource programmes. Among others, environment – one in which regulatory, of the 162,000 people in PwC firmsPwC was again ranked among the 100 legal and standard-setting processes around the world – in the passion,Best Companies to Work for by Fortune are struggling to keep pace. As a result, knowledge and commitment broughtmagazine, and was among the top 10 we are not operating as efficiently as to every relationship.companies on Working Mother’s best we should. Businesses continue to payworkplace list for the 7th consecutive the price for a system that is too complex As the global economy emerges fromyear. PwC was also placed first in and cumbersome. the downturn, we expect FY 2011 toThe Times (London) Top 100 Graduate continue the slow growth pattern,Employers survey, and was among the Responsibility although with regional differences.Top 10 Best Companies to Work for by Corporate responsibility permeates all But we do see exciting opportunitiesConsulting magazine. aspects of business today. Specifically, emerging as well, particularly in the challenge of managing issues around industry sectors such as healthcare,Profession sustainability is seen by most business financial services and infrastructure,The economic downturn also gave rise leaders as an important factor in long- and we are poised to help clientsto questions about the role of accountants term prosperity. PwC firms are likewise capitalise on them.in the financial crisis, the long-term conscientious about their conduct inrelevance of auditing and what value it the communities where they operate. We are not reluctant to share our ownbrings to the marketplace. The European ambition at PwC – to be the world’sCommission announced it will publish PwC firms also collaborate closely with leading professional services network.a wide-ranging discussion paper on organisations such as the United Nations, We want to be distinctive in everythingauditing, dealing with such issues as the World Economic Forum and the we do; to set ourselves apart from ourindependence, the dominance of the World Business Council for Sustainable competitors as much by the quality ofBig Four accounting networks, and the Development to help find solutions. our relationships as by the excellenceownership and governance of audit Our initiatives are guided by our of our performance.firms. Similar debates are also taking commitment as a member of the Unitedplace at national levels such as in the Nations Global Compact. Through that As you reflect on the examples andUK. The financial crisis has given all commitment we seek to improve lives stories shared in this publication, I hopeof us much to reflect on – not only what by applying the UNGC’s 10 principles you will understand why I am confidentcould have been done to potentially in the areas of human rights, labour, these ambitions are well within our reach.mitigate the impact of the crisis, but what the environment and anti-corruption.should be done to avoid a recurrence. Elsewhere in this report, you willPwC welcomes these debates and takes see examples of how PwC is workingseriously the responsibility to participate to incorporate the 10 principles of thefor the benefit of our clients and ourselves Compact in the marketplace, in the wayas well as the wider public interest. we treat our people, in our interactions Dennis M. Nally in our communities, and in our Chairman, PricewaterhouseCoopersThe relevance and value of the audit is environmental initiatives. Internationaldirectly related to the corporate reportingmodel. We must help shape the agenda for Global Annual Reveiw 2010 5
  • 8. ClientsStrong relationships:The key to unlocking value6 PwC
  • 9. PwC member firms consistentlybuild relationships that help clientscreate the value they’re looking for.Client relationships go beyond singleengagements. We work hard tounderstand the client’s businessand how they define value.PwC’s clients typically turn to us forhelp in solving problems that involvenumerous concurrent factors, weighingcomplex trade-offs, and prioritisingmultiple objectives. Case studyFounded in 1950, China MinmetalsCorporation is a major Chinese miningcompany listed on the Shanghai Stock China Minmetals: TrustedExchange. It deals globally in thedevelopment, production, trading and relationships and drive for valueoperation of metals and minerals, andhas an ambition to become a world-class combine for winning ventureproduct provider in its sector.In recent years, PwC China Advisorypartner Ken Su has worked with hisAudit partner colleague Timothy Ho todevelop a strong working relationship ensuring success. It was truly a singlewith the China Minmetals team. When team working with the client to achieveChina Minmetals was looking to acquire one overriding aim – to help our clienta significant amount of the copper, zinc achieve optimum value from theand lead assets of Australian-based Oz transaction.”Minerals, it turned to PwC China for Following the acquisition of key assets ofdue diligence services in relation to the Oz Minerals, Minmetals formed a newUS$ 1.38 billion deal. company called MMG (Minerals andAll the cross-border strengths of the Metals Group). As the opportunity toPwC network came into play as Ken Su’s audit this new company became apparent,team collaborated with colleagues in the PwC mining team in Australia, led byPwC Australia along with PwC’s tax Tim Goldsmith, worked with PwC Chinateams in China. This collaboration colleagues in Hong Kong and Beijing toenabled PwC China to provide added- seek and ultimately win the audit of MMG.value advice to Minmetals in the areas The client awarded the engagement toof deal structure, negotiation strategy PwC as a result of the partnership andand target value/risk assessment. Ken trusting relationships developed throughSu recalls: “Throughout the project, the years, and deep industry knowledge,trusted relationships and close as well as PwC’s candour and attentioncollaboration were key factors in to detail. Global Annual Review 2010 7
  • 10. These sorts of challenges mean that In our experience, it is almost always the technical expertise must be reinforced case that a strong relationship between with excellent judgement, broad business PwC and its client leads to better results. experience, and a keen understanding This is PwC’s approach to doing business. of the client’s implicit, as well as explicit, goals. In circumstances like these – Of course, creating a strong relationship particularly when the stakes are high – with a client takes time and effort. there is an excellent opportunity for One thing that PwC people have deeply a strong and lasting relationship to embedded in their work, is a strong develop between a client and its PwC awareness that clients judge PwC on engagement team. the entire ‘package’ of benefits and impressions that they receive during the course of an assignment. In other words, the client’s view of us is shaped both by the big things and the little things we do for them. Case study Eli Lilly: Pulling together to help create value Founded in 1876, Eli Lilly is one of aside any feelings of competitiveness and the largest pharmaceutical companies work together closely with a single goal in the world. Of the company’s 40,000 in mind – to create and preserve value employees, more than 7,000 are engaged for Eli Lilly.” in research and development activities. This sort of teaming among Lilly and its A true multinational enterprise, Lilly has external advisors was put to good use manufacturing plants in 13 countries; during the company’s recent multi-billion conducts clinical research in more than dollar acquisition of ImClone Systems. 50 countries; and markets its products The PwC US mergers and acquisitions in 143 countries. team worked closely and effectively with The Lilly organisation is highly collegial, Lilly’s external legal advisors and auditors and close and collaborative relationships to ensure that this complex transaction with its external advisors are very went smoothly. The transaction important to the company. Indeed, Lilly’s subsequently led to a bigger role for PwC Chief Tax Executive, David Lewis, likes to during the post-acquisition restructuring say: “We don’t care what you know until phase, which involved tax, M&A and we know that you care”. PwC’s relationship transfer pricing professionals from the with Eli Lilly goes back more than a PwC US and PwC Switzerland firms. decade, and is now overseen by US Tax Says Eli Lilly’s David Lewis: “What’s partner Art Wachholz. important to Lilly is that our external Art says: “After just a few days working advisors all pull together with the with Lilly people, it became very apparent ultimate aim of helping us to create to me that this is a relationship-driven value for our business. The PwC people organisation. The importance that Lilly we’ve worked with clearly recognise this people attach to ‘teaming’ is evident and, as a result, we’ve developed a close throughout the company’s culture. working relationship with them at all In particular, Lilly’s Tax department levels of the Lilly organisation. For Tax, expects all its external advisors to put they are truly trusted advisors!”8 PwC
  • 11. Some capabilities – such as technicalmastery, industry knowledge, and awell-rounded business sense – representthe threshold capabilities expected of us.Other traits – like anticipating the client’sissues and being highly responsiveto their needs – are more subtle andpersonal, but no less important.Consequently, in every interactionwith a client, PwC people seek tocombine their ‘hard’ technical skillswith their ‘soft’ people skills in a waythat will nurture the client’s confidencein us. In time, this approach helps alasting and productive relationshipto emerge and grow. Founded in 1975, Microsoft is an acknowledged world leader in software, services, and solutions that help people and businesses realise their full potential. With more than 88,500 employees in Case study operation centres in Ireland, Singapore and the US, subsidiaries in 109 countries and its corporate headquarters in Microsoft: United in drive Redmond, Washington, the company has a presence in every corner of the globe. to be better, stronger, faster Microsoft is on a continuous mission to transform its operations – an ongoing drive to become better, stronger, faster. Helping Microsoft succeed in this mission is PwC. The long-term, multi-faceted, Management capabilities. Over the global relationship between the two past number of years, for example, organisations spans more than a decade, the PwC team worked closely with and is overseen by US partner Robert L. Microsoft to plan, manage and Moline. He manages a global team of successfully complete the purchase of 200 PwC people who serve Microsoft the Norwegian technology company on a wide array of projects worldwide in FAST Search. PwC US Advisory partner areas as diverse as finance effectiveness, Patrick Pugh, who led the project, intellectual property management, explains: “We were able to put together IT security, project and programme a team with the right skills at short management, risk management, notice. Throughout the project, our tax and customs advice, training and focus was on delivering quality work environmental sustainability. Robert and investing in relationships.” says: “We are all keenly aware that every PwC’s thorough and highly collaborative time Microsoft takes the decision to approach is appreciated on the client’s engage us, we are expected to deliver side of the relationship. Joe Wittinghill, recognisable value in each and every General Manager of Microsoft’s Venture project we undertake. This has always Integration Group, adds: “What we been our mission, and has become even appreciate most about working with more critical in recent times.” members of the PwC team is their One of the ways in which Microsoft is commitment to our company and to driving its transformation is through helping us create the value we need. acquisitions. To help it integrate many They are responsive; they understand our of these acquisitions into its existing business and our needs; and they know businesses, Microsoft relies on the how to supplement our methodologies support of the US firm’s Integration with their good practices.” Global Annual Review 2010 9
  • 12. Famed for its ‘Superdry’ brand, understanding of our sector, andSuperGroup is a fast growing UK-based they executed their work extremelyinternational retailer and wholesaler professionally. Their enthusiasm andof branded youth fashion. Founded commitment, coupled with their highin 1985, SuperGroup has a total of quality technical advice, played an49 stores in the UK and Ireland plus a instrumental role in ensuring wefurther 58 concessions within House of achieved a successful listing at anFraser stores. Internationally, Superdry incredibly fast pace. In addition theybranded products are sold in more were an integral part of the team.than 30 countries with franchised and The part I liked and welcomed mostlicensed outlets in Belgium, France, was their ability to step in when extraScandinavia, North America, South help was needed. In among all the hardAmerica and Australia. work and long hours, they maintained a very professional managementIn its bid to become the first successful style that was challenging, respectfulUK retail listing since the start of the and supportive.”economic downturn, SuperGroupsought help from PwC UK. PwC UK’s Steve Smith, PwC’s project leader on thePhil Robinson managed the reporting IPO, sums up: “It was a great experienceaccountant role from a tax perspective working on a project where we couldand engineered the most tax-efficient really add value and take the pressure offlisting structure for the Initial Public the client. There were many service linesOffering (IPO). He says it was a involved but our delivery was seamless.technically demanding transaction – The client saw us as one coherent teamand that the experience of the PwC and that’s how it should be.”team was a key success factor: “We wereable to deliver excellent value in termsof the benefits we were able to produce.At all times we considered what thedifferent stakeholders in the businessrequired, and our focus was alwayson ensuring that the advice met all ofthese needs.”Following successful completion ofthe IPO – and after close collaborationbetween the client and PwC teammembers from audit, capital markets,structuring services, tax, transactionservices and risk assurance –SuperGroup successfully enteredthe FTSE 250 in March 2010.Chas Howes, SuperGroup plc FinanceDirector, says: “The support we hadfrom PwC was absolutely fantastic.I was delighted with their input to this Case studycomplex and demanding process. Theybrought a strong blend of skilled peopleto the table who had an in-depth SuperGroup: Teamwork and focus on value lead to successful listing10 PwC
  • 13. One quality in particular is key to To an extent, the relationship that We take a similar approach in the wayevery strong relationship: trust. For we seek to establish with clients is a we work with clients. In our view, PwC’sthe people of PwC, the word ‘trust’ has reflection of PwC firms’ long and rich own intellectual capital is amplified andspecial meaning. In the first instance, heritage as public auditors. That role extended by that of its clients. By workingtrust is a core element of our business, has instilled in our people the quality in close collaboration, PwC firms andwhich is to build the public’s confidence of ‘independence’ – an attribute their clients enter into a relationship inin the fair and efficient functioning of that isn’t limited to compliance with which learning occurs in both directions.capital and financial markets around regulatory rules, but instead extendsthe world. This means everyone in PwC to independence of mind. As a result, At PwC, we’re persistent and patient inshould exhibit a high level of personal we tell clients what we think, without our efforts to build and sustain strongintegrity and responsibility at all times. fear or favour. relationships with clients. We knowThis imperative provides an excellent that the sorts of relationships we wishbasis for establishing a trust-based While independence of mind is critical to establish take time. We also knowrelationship with our clients. to our ability to carry out the role of they require us to exhibit – in every public auditor, it is also an attribute interaction with every client – the that infuses every part of our business. implicit qualities of trustworthiness, Because we embrace independence, independence, and empathy, together‘Putting ourselves in the we are compelled to give clients our best with an explicit desire to work in close,client’s shoes’ allows us to advice, even in cases where that advice respectful collaboration. In bringingconnect deeply with clients is uncomfortable to hear or contradicts these attributes to every assignment we conventional wisdom. Clients value our take on, PwC simultaneously enrichesand grasp the practical straight-talking approach, regarding it – the professional lives of its people andbusiness context in which quite rightly – as an excellent starting unlocks the door to creative, value-richthey operate. point for generating innovative solutions solutions for clients. and building lasting relationships. To maximise the resulting benefits,On a practical day-to-day level, trust is independence of mind must go hand-in-also established when we demonstrate hand with empathy – or, as PwC peoplea number of our qualities to our clients. often say to one another, ‘putting ourselves in the client’s shoes.’These include a capacity for listeningand asking the right questions; for This mindset allows us to connect deeplyfocusing on their objectives rather with clients and grasp the practicalthan our processes; for grasping the business context in which they operate.big picture; and for delivering what we It keeps us focused on the client’s agendapromise. In the absence of trust, most rather than our own. It also enables usprofessional service providers appear to keep our egos in check and acknowledgemore or less interchangeable. But add that we don’t always have all the answers.trust to the equation, and you gainthe opportunity for ‘creative tension’ What else contributes to strongbetween service provider and client. relationships? In our view, a collaborativeIn such relationships, both parties are working style is a further prerequisite.sufficiently comfortable – both Not surprisingly, collaboration comesintellectually and emotionally – to naturally to PwC people because it’sengage in an open and challenging central to the way we work amonggive-and-take of ideas and perspectives. ourselves. After all, PwC is a global network of national firms with various communities of interest: industry generalists, functional specialists and subject matter experts. To address particularly complex client issues, members of these communities come together to form self-organising, non-hierarchical teams where ideas can be proposed, discussed, and either disposed of quickly or taken further. In these fluid teams, deference is paid to ingenuity, innovation and know-how rather than rank. Global Annual Review 2010 11
  • 14. What’s next forcorporate reporting?Ian PowellPwC UK senior partner and memberof the Network Leadership Team
  • 15. Corporate reporting plays a pivotal explanation of how and why a companyrole in the effective functioning of the is likely to be sustainable in the long run.market economy. By ‘corporate This has to address critical issues suchreporting’, we mean all the mechanisms as a frank explanation of the businessby which companies communicate their model and the alignment of managementperformance and activity to their incentives with the business strategystakeholders, particularly the investment and the management of risk. Whethercommunity. When these mechanisms you look at external drivers, strategicare functioning well, they enable priorities, business models or broadshareholders and investors to assess the performance indicators, the fact isperformance of a business, establish its that all aspects of a business are closelyvalue and exercise effective oversight. interrelated and interdependent. The only way to portray a true pictureSince the start of the global economic of a company’s business activities andcrisis there has been much debate about longer-term prospects is to consider eachthe effectiveness of corporate reporting. aspect in the context of the others, ratherOur current reporting model has its roots than in isolation. This is what we callfirmly in the 19th century. It struggles to integrated reporting.cope with the challenges of globalisation,technology and changing patterns of Companies have much to gain frombusiness and share ownership. In the adopting such a model. If done well,course of my own career, corporate integrated reporting can deliverreports have generally increased in size competitive advantage in a number ofand complexity but not, I believe, in the ways: for example, it can secure capitalclarity of insight they offer on the strategy and credit, help win the war for talentand performance of the company. and build strong business relationships.These shortcomings have been amplifiedby the failure of the traditional corporate There is still a long way to go to makereporting model to address broader corporate reporting ‘fit for purpose’ inissues such as resource constraints and today’s fast-moving world. That’s whyclimate change. PwC UK has decided to take action, to work with institutional investors,In my opinion, today’s corporate accounting bodies and other stakeholdersreporting focuses too much on financial to identify the changes needed toinformation. It should be about much overhaul and improve the current system.more than that: at root, it should be One thing is clear – we need to developabout delivering a more holistic greater clarity and understanding about the barriers to effective reporting, and about the changes needed to make the system ‘fit for purpose’ in the future.
  • 16. PeopleCreating culture: The PwC Experience12 PwC
  • 17. PwC is a remarkably diverseorganisation. Our workforce includesbusiness advisers, accountants, auditors,forensic investigators, financialanalysts and tax experts – among otherservice professionals. Similarly, ourclient portfolio contains companies ofevery conceivable size and shape; andour service mix varies from countryto country according to local marketneeds and national regulation.So does an auditor in Hong Kongreally have anything in common witha Performance Improvement colleaguein Madrid? Yes – quite a lot, actually. client relationships. And the team isAnd that commonality is found in their where PwC’s culture of commitment to Does an auditor incommitment to helping clients tackle clients is passed on to younger members. Hong Kong really havetheir most difficult problems, and As a consequence, PwC’s organisationalcreate the kind of value that will help structures aim to help engagement anything in common withthem succeed. teams connect with clients, win work, a Performance Improvement deliver superior service, mentor the next colleague in Madrid?While PwC is one of the largest employers generation of PwC leaders, and createin the world, the organisational unit that value for clients. This is the culture that Yes – quite a lot, actually.we rely on most frequently to create value we’re working to build across PwC firms’for clients is our most basic of all: the operations in 154 countries. We call itclient engagement team. Most of the the PwC Experience.decision-making relating to how we meetclient needs rests with the engagement In building a consistent businessteam. What’s more, the team has primary culture across such a diverse workforce,responsibility for building and expanding we’ve had to take special care with the articulation of the PwC Experience. In a word, we’ve had to keep things simple. In turn, that simplicity has helped us to build understanding and buy-in from PwC people around the world. Global Annual Review 2010 13
  • 18. Our people – all 162,000 of them – The most compelling and enduringThe PwC Experience captures recognise that technical excellence insight into business to have emergedour fundamental goals, to and deep global resources are qualities in the past decade is that companiestreat our clients like people that PwC has in abundance. But they need non-financial goals to inspire and also know that an equally important guide the entire organisation. The PwCand our people like clients – consideration for clients is their Experience captures our fundamentaland to build trusted experience of working with PwC; how goals, to treat our clients like people andrelationships so that we can we relate to them as people, and our our people like clients – and to build commitment and ability to help them trusted relationships so thatcreate greater value for our create value. PwC people – regardless we can create greater value for ourclients and one another. of where they work, or their particular clients and one another. In the end, business line or market segment – this commitment is what differentiates understand this and try to deliver that PwC from its competitors. experience every day. To that end, we interact with clients on the basis of Here are just three short stories that four simple but powerful behaviours: demonstrate the skill and determination • We invest in client relationships that our people are eager to harness in order to bring value to their own lives • We share and collaborate as well as add value to their clients. • We put ourselves in our clients’ shoes • We focus on creating client value To keep what we stand for simple and well-understood across the PwC network, we mirror these four client behaviours in the way we treat one another inside PwC: • We invest in our people • We share and collaborate • We put ourselves in one another’s shoes • We focus on enhancing the value of our people14 PwC
  • 19. The entry of women into the labour market has contributedmore to growth in global GDP than either new technology orthe emerging economies of China and India. Sahar HashemA compelling case this status. PwC hopes her successOver the past few decades, the entry will encourage more Saudi womenof women into the labour market has to consider a career in accountancy.contributed more to growth in globalgross domestic product (GDP) than Sahar, an associate based in PwCeither new technology or the emerging Saudi Arabia’s Jeddah office, says:economies of China and India. The “The past two years have beenincreasing presence of women in the peppered with moments of incredibleworkplace – not just in terms of the achievement, and challenges thatnumbers joining the workforce, but at some points seemed almostalso their entry into middle and senior insurmountable. The support I receivedmanagement positions – is reflected from colleagues throughout the PwCin PwC’s own global workforce. network inspired me to push through – and I’m delighted that the hard workA compelling case in point is Sahar and commitment has resulted in suchMohammed Hashem, PwC Saudi an accolade, none of which would beArabia’s first female Saudi national possible without their continuousemployee to pass the Saudi Organisation support and encouragement. I trulyof Certified Public Accountants (SOCPA) believe that PwC is building a globalfellowship examination. The exams are corporate culture around the PwCwidely viewed as the highest possible Experience, in which empathy,achievement within the Saudi collaboration, and the best ideas areaccountancy profession, and Sahar is recognised and practised.”only the fourth Saudi female to achieve Global Annual Review 2010 15
  • 20. Culture and Brand:What’s next for PwC?Bob MoritzPwC US senior partner and memberof the Network Leadership Team
  • 21. Some businesses dismiss culture as closely with them to help them create the‘soft stuff’, far removed from their value they are seeking. We’ll achieve thissuccess in the marketplace. At PwC, only if we have a single unified culturewe take a different view. and brand across our network. And in setting the bar high for ourselves in termsWe understand that culture is of our own culture, we’ve also createdintertwined with the value our clients a new and higher standard for the wayreceive and the value that our people we deal with clients and all otherderive from their work experience with external stakeholders.us. At its core, an organisation’s culture isabout how its people behave. This makes A strong and well-tuned culture createsculture critical to every relationship, greater clarity and cohesion in a workforce,every interaction, every decision across and directly improves individualthe business and, ultimately, to our performance. In turn, it ultimatelysuccess in the marketplace. strengthens an organisation’s brand. That’s what we’re seeking to do with theAt PwC, we acknowledge at all levels PwC Experience. Our goal is to energisethat our continuing success depends our people to change the way they work,critically on the strength and quality of to continue our relentless drive for theour culture. This culture is made up of highest quality in both our people andthe fundamental values shared by all our the services we offer – and, ultimately,people, the reasons why we exist, and the to deliver greater value to clients. This isgoals we set ourselves, both individually critical if we are to be – and remain –and collectively. number one in professional services. So the PwC Experience will be a criticalThe word ‘culture’ is often closely strategic priority in the years to come.associated with ‘brand’, and with goodreason. If culture is the internal value and No organisation can renew its culturebelief system that guides and animates through management decree. Instead,an organisation’s people, then brand is a strong culture and a durable brandthe external manifestation of this system. come from bottom-up, driven by theIn other words, culture is the organisation’s enthusiasm and willingness of tens ofpromise to stakeholders – and brand is thousands of people at all levels tothat same promise delivered. embrace certain behaviours in their interactions with clients and colleagues.So a brand’s strength – or lack of it – flowsfrom the culture that shapes it. Culture So the changes we have in mind formay appear ‘soft’ in terms of being difficult PwC must involve everyone. Every day.to quantify, but it’s even more important Everywhere. At every level.as any of the ‘hard’ stuff that drivesbusinesses forward. As such, culture This is why we don’t have one set of rulesmust be regularly monitored, nurtured and expectations for partners and anotherand – when necessary – renewed. for staff. Or one set for one business line and a different one for another. We’reThis is what we have done at PwC. all pulling together in the same direction.We’re now explicitly committed to being We believe that the marketplace will soonthe world’s number one professional take notice. When it does, we think it willservices network, building even stronger like what it sees.relationships with our clients and working
  • 22. Building bridges these up: “Treat people as individualsA native of Nanjing, China, Suwei Jiang – not stereotypes. And be genuinely “Our clients welcomeoriginally came to the UK as an exchange interested in their objectives, priorities the opportunity to havestudent. Since joining PwC UK in London and challenges. Really, it’s no differentin 1998, Suwei’s career has followed from how you should treat everyone.” a frank exchange ona steady upward path. Currently, she’s important issues witha Director and Senior China Advisor While Suwei clearly brings an someone they trust,with the UK-based China Business Group, abundance of technical expertise to hera network of Chinese-speaking PwC clients, she also tries to bring something without having to worrypeople who focus on helping UK and more. “Our clients – even the most about office politics.”Chinese companies make cross-border senior among them – sometimes feel ainvestments. Not surprisingly, it’s a role sense of isolation. So they welcome the Suwei Jiangthat keeps Suwei fully occupied. opportunity to have a frank exchange on important issues with someone they“China’s rapid rise has had a tremendous can trust, without having to worryimpact on the world economy,” says about office politics. That’s a role thatSuwei. “So PwC is constantly fine- we regularly play. And in doing so, wetuning its own operational model in often help clients gain insights that theyorder to ensure that we can deliver might have otherwise missed.” Suweicross-border services at consistently adds that interacting with the clients onhigh levels.” She uses one of her recent this level is both ‘value-adding and aprojects as an example of PwC teams’ way to build long-lasting relationships.’ability to coordinate across severaltime zones. “We performed financial Suwei acknowledges that her riseand tax due diligence and tax at PwC is due in part to the mentoringstructuring work for a Chinese oil and she received along the way. “There aregas company doing a multi-billion dollar a number of PwC people who have hadtransaction in Brazil. Our lead team a significant influence on my career,”worked out of London. Other PwC teams she says. “What they taught me waswere providing input from Brazil, the the importance of learning fromNetherlands and China. With so many others, of trusting and empoweringpeople in so many locations, flawless others, and that honesty and integrityproject management was absolutely are indispensable.” Suwei Jiangcritical to the project’s ultimate success.The client was impressed.” And what advice does Suwei have for more junior PwC people? “First, focus onPart of Suwei’s job is building bridges building relationships. And secondly, inbetween disparate cultures. In doing adverse situations, stand firm and focusso, Suwei says that she applies a few on ways of turning things around.”tried-and-tested principles. She sums16 PwC
  • 23. Overseas experience a multinational school with teachersWhile serving oil and gas companies and students from over a dozen countries.out of Houston, Texas, Kenny Hawsey “They’re learning that there’s a bigwas taken aside one day by a PwC US world out there.” Kenny observes.senior partner and given this counsel: As for Kenny, he simultaneously serves“Energy is a global game. If you want a portfolio of multinational oil productionto work with the major players, you and service companies while travellingshould get overseas experience.” throughout the region as PwC’s EnergyThat piece of advice soon launched Tax Leader for the Middle East.a peripatetic career that, over thefollowing decade, found Kenny Hawsey As Kenny’s global experience hasin postings to Moscow, Azerbaijan and expanded, so has his network ofDubai. During those years - as Kenny’s personal and professional contacts. Kenny Hawseyknowledge of the industry deepened and Kenny tells the story of developinghis perspective on the world widened – a close relationship with a client inhis ability to provide value to clients Azerbaijan, who, almost a decade later,progressed by leaps and bounds. turned up recently in a new role as his company’s manager of Middle East “People know that“During my years in Moscow, I spent most tax operations. The two are now againof my time helping clients understand the working closely together. “These sorts I understand the bigimplications of the special tax regimes of relationships are invaluable,” Kenny picture and can providethat apply to multinational oil companies.” says. “From past experience, people immediate value.”Kenny says. “Then, when I got to know that I understand the big pictureAzerbaijan, I became much more involved and can provide immediate value.” Kenny Hawseyin helping to shape the Production SharingAgreements that host governments grantoil companies for the right to explore andproduce.” Kenny’s Azerbaijan tour wasfollowed by 18 months in Dubai, duringwhich he visited countries throughoutthe region.In 2002, Kenny – now a PwC US partner– returned to the US. But seven yearslater, the travel bug bit him again.Today, he lives in Riyadh with his wifeand three children. The kids go to Global Annual Review 2010 17
  • 24. Corporate ResponsibilityGetting down to business18 PwC
  • 25. Over the past decade, the meaning and While the concepts of CR, stakeholderimportance of ‘corporate responsibility’ interests and sustainability have takenhave undergone a rapid and decisive a decade or more to reach the businesstransformation. Once largely associated mainstream, their collective impact iswith acts of corporate philanthropy, CR now revolutionary. Because businessnow serves as a set of implicit standards impacts society at so many levels, societythat help to determine how a business in turn claims a degree of authority inshould be run, the types of activities in granting or withholding each business’swhich it should and should not engage, ‘licence to operate’. Also, while profits,and even whether it should exist at all. job creation and innovation are stillThis profound shift has seen a host of important measures of a business’snew issues – environmental concerns, contribution to society, the fact is thatsocietal needs, employee development governments, activists, academics andand well-being, ethical marketplacepractices – muscle their way to the topof the corporate agenda. CR now serves as a set of implicit standards that helpWith the rise of CR, business people to determine how a business should be run, the typeshave realised that their ‘stakeholders’ – of activities in which it should and should not engage,a term once deemed almost synonymouswith ‘shareholders’ – are now a far larger and even whether it should exist at all.and more diverse grouping than everpreviously imagined. consumers now apply wider and more complicated measures of a company’sAlongside the redefinition of ‘stakeholder’, worth and purpose. Issues regardinganother recent coinage has joined the climate change, water use, workermainstream business vocabulary: exploitation, resource depletion andsustainability. While definitions vary, environmental degradation are nowsustainability is generally regarded regularly laid at the door of the businessas a demonstration of the sorts of community. Pleas by businesses tocorporate behaviours that satisfy simply ‘trust us’ are now met by thea business’s present requirements blunt reply, ‘show us’.without compromising the needs offuture generations. Of course, the argument that these sorts of environmental and societal problemsSo sustainability obliges businesses to result from a rapacious business culturefind ways to continuously renew and is simplistic, and ignores the hugereplenish the resources they consume. contributions that business makes toThese resources are many and varied: society every day. More immediately,raw materials and energy; human it misses the point that the knowledge,and intellectual capital; and the trust capabilities and good intentions of theand goodwill of trading partners, business world will be indispensible ingovernments and society at large. finding solutions to these problems.No longer can any company affordto mismanage or misuse any of these This latter point is not lost on businesslimited resources. executives. Many of the world’s leading enterprises are already working hand- in-hand with governments, regulators Global Annual Review 2010 19
  • 26. Pleas by businesses to PwC has always believed that the best business solutions grow out of collaborative relationships with clients. simply ‘trust us’ are Today, the same applies with corporate responsibility, stakeholder engagement and sustainability. That’s why PwC has now met by the blunt collaborated closely with international organisations such as the World Business reply ‘show us’ Council on Sustainable Development, the World Economic Forum’s Global Citizenship Initiative, and the United Nations Refugee Agency in support of projects ranging from the adoption of low-carbon technologies, to rural electrification, to establishing primary school education for 20,000 Darfur refugee children. More recently, firms in the PwC network have agreed to align their CR efforts and NGOs to tackle the most complex around three specific areas of concern: global challenges. While the practice youth education, climate change and of CR has too often been dismissed in social inclusion/diversity. These three the past as corporate ‘feel-goodism’ themes serve as the guiding principles or a form of stealth marketing, our that focus actions on our commitment experience with most clients confirms to act responsibly in the four areas in that management takes CR extremely which we operate - namely Marketplace, seriously. Indeed, we’re seeing a People, Community and Environment. step-change in the way business leaders view their CR responsibilities. All of PwC’s CR-related initiatives are The traditional ‘compliance mindset’, guided by our commitment as a member focused on meeting CR obligations of the United Nations Global Compact at bare minimum levels, is being (UNGC). The stories that follow provide supplanted by a ‘conviction mindset’ an overview of how PwC is helping to – one that proactively embraces CR improve the lives of people today by both as the right thing to do and also applying the UNGC’s principles. as key to future success. We believe CR has now reached the point of potent maturity, which is encouraging news both for society and business. Figure A: PwC Global CR Framework Youth education Climate change Social inclusion Market Place People Community Environment Doing Good Inspiring Developing Contributing Business Responsible Future to a Healthier Leadership Leaders Environment20 PwC
  • 27. Taking a leadership rolePwC is acutely aware of its obligationto take a leadership role in promotingthe concept and practice of corporateresponsibility. One very visible exampleis our participation in the UnitedNations Global Compact (UNGC),the world’s largest corporate citizenshipand sustainability initiative, whichbrings together more than 5,100corporate participants and stakeholdersfrom over 130 countries. The UNGCprovides a policy platform and frameworkfor firms committed to responsiblebusiness practices. We participate init through a written commitment touphold the 10 principles it has definedin the areas of human rights, labour,the environment and anti-corruption.PwC firms actively support theseprinciples in their respective geographies.In addition to this direct participationin the UNGC, PwC has also collaboratedwith a number of UN agencies to assist and the UN to investigate thein activities and programmes that role of responsible business andfurther support the UNGC’s principles. investment in bringing about theAs a signatory to the UNGC, PwC also much-needed transformation toparticipates in the Communication on more sustainable markets.Progress (COP) process, which requiressignatories to provide reports annually As the greening sponsor, we appliedon their progress in implementing our expertise in climate change andthe UNGC’s principles. This process sustainability on a pro bono basishelps to instil accountability and drive to map the carbon footprint of thecontinuous improvement among Summit and mitigate its environmentalparticipants, while simultaneously impact. The UN then offset the Summit’sbuilding a useful set of responsible impact by buying Certified Emissionscorporate practices. Reductions generated at a geothermal project in Guatemala. Dennis Nally,As part of our ongoing involvement, Chairman of PricewaterhouseCoopersPwC recently served as the greening International, spoke at the event aboutsponsor of the 2010 annual UN Global PwC’s role in greening the conference,Compact Leaders Summit. This event as well as its wider commitment tobrought together 1,500 leaders from sustainability both internally andbusiness, civil society, labour organisations, with clients.the investment community and academiawith representatives from government Global Annual Review 2010 21
  • 28. Climate change in fast-growing businesses to turn off their lights and“Entire new industries are economies non-essential appliances for one hourlikely to emerge in which PwC China/Hong Kong is committed to promote conservation. PwC China/ to playing an active and responsible Hong Kong also seconded two colleaguesthe central business model role in improving our impact on the to assist WWF China in providingwill be based on innovative environment. In pursuit of this goal, project management support, and– and perhaps radical – a Climate Change Steering Group has also reached out to 13,000 of our been driving pro-environment policies business partners encouraging themapproaches to improving and practices such as reduced lighting to engage in Earth Hour.social or environmental and automatic timers, double-sidedconditions. Call it printing, a car pooling database in Furthermore, PwC firms provide a Beijing and Shanghai, and the use of range of sustainability and climate‘sustainable capitalism’.” video conferencing as an alternative change services. These help clients to business travel. This Steering identify the relevance of sustainabilitySilas Yang Committee was appointed as an arm and integrate it into their strategies andPwC China senior partner of the Corporate Responsibility team operations, seize opportunities to growand member of the NetworkLeadership Team to help coordinate PwC China/Hong revenues and reduce costs, and manage Kong’s various green engagements, sustainability-related risks. Leveraging direct efforts in measuring and reducing this expertise, PwC China/Hong Kong its carbon footprint, and develop an is a founding sponsor of the China environmental sustainability policy. Greentech Initiative, an open-source commercial collaboration of over 80 We as a network strive to be an of the world’s leading green technology environmentally responsible organisation firms, entrepreneurs, investors, NGOs that inspires people and clients to engage and policy advisors. PwC China/Hong in sustainable business practices and Kong made crucial contributions to drives positive change in the the China Greentech Report 2009, community. In keeping with this seconding a full-time project manager, commitment, PwC China/Hong Kong developing several sections of the report partnered with WWF on Earth Hour and hosting most of its working sessions. 2009, a global call to households and22 PwC
  • 29. Corporateresponsibility:A look aheadSilas YangPwC China senior partner and memberof the Network Leadership Team
  • 30. It’s official. Corporate responsibility has Second, companies will move fromgone ‘mainstream’ in the most important simply managing societal expectationsdomain of all: the public consciousness. to maintaining open channels of communication with interestedWhether you look at your customers, stakeholders. In this sense, stakeholdersyour shareholders, or your employees, will be brought inside the enterprisevirtually everyone now has a new set of as agenda-setters and problem-solversassumptions and expectations regarding in important CR-related issues.your business’s level of accountabilityand transparency. So if you’ve been Lastly, further down the road manysearching for a ‘business case’ to justify large, established companies will rethinkjumping into CR, look no further. their business models, with a view toIgnoring the assumptions that are establishing new sorts of social contractsprevalent across society could put your between their enterprises and the largerbusiness at risk. society. Similarly, entire new industries are likely to emerge in which the centralSo, where does CR go from here? business model will be based onIn the years ahead, I foresee three innovative – and perhaps radical –likely developments. approaches to improving social or environmental conditions.First, instead of being viewed as a Call it ‘sustainable capitalism’.secondary function bolted onto thecorporate machinery, business norms and In the meantime, however, CR doessystems will become much more aligned add another layer of complexity to thewith CR principles. Expect CR to: become already tough job of running a profit-a primary input in all corporate planning making enterprise. But as CR is wovenactivities; inform employee behaviours ever deeper into the corporate fabric,and decision-making; and be reinforced business will also have greater scope forconstantly through performance more frequent and meaningfulstandards and reward mechanisms. interactions with society at large. These will create opportunities for building relationships with citizens and organisations that were previously off the corporate radar. Where the number of relationships is increasing, so too is the potential for creating value for an ever-expanding number of people.
  • 31. Ms Fikile Zikhali, a trainee of the Ujima Bakwena Co-operative, is one of the many women to have benefitted from the Faranani Rural Women Training Initiative. Fighting corruption Faranani: A rural women“PwC helped these women The need to reduce the risk of corrupt training initiativeacquire the skills they practices taking place has resulted in PwC South Africa is continuously an increasing number of companies working towards social and economicneed to generate their taking initiatives to improve internal development in the rural areas ofown income and become integrity, transparency and accountability. South Africa. In 1992, PwC Southmeaningful contributors The quest for corporate social Africa – in collaboration with the responsibility received further impetus National Industrial Chamber –to their communities and in 2004, when, at the first United established the Business Skills forthe country.” Nations Global Compact Leaders South Africa Foundation (BSSA). Summit, the Secretary-General of the To date, BSSA has successfully trainedThabani Jali UN called for the adoption of the 10th more than 20,000 entrepreneurs.Executive Chairman of Principle of the UN Global Compact, In 2006, PwC South Africa extendedPwC Southern Africa which states: “Business should work the initiative to include rural women against corruption in all its forms, in business through the Faranani including bribery and extortion”. Rural Women Training Initiative. To support this agenda, PwC Austria Small businesses form the backbone collaborated with the United Nations of the South African economy, Office on Drugs and Crime (UNODC) and women own a growing number to produce a report into what companies of these enterprises. Faranani in the Fortune Global 500 are doing to supports women who want to become fight corruption. The report provides business-owners, by providing them an overview of the direct and indirect with the knowledge to start and measures that companies have adopted actively manage their own businesses. to combat corruption and economic This year, to promote the empowerment crime, including extortion, bribery of all women, PwC South Africa invited and other forms of fraud. Rather than various organisations to nominate commenting on companies’ anti- suitable candidates to undertake the corruption performance, this report training course. is designed to act as an inspirational tool for companies that wish to adopt Thabani Jali, Executive Chairman of and enforce effective anti-corruption PwC Southern Africa, says: “PwC helped policies but lack the necessary these women acquire the skills they ‘know-how’, or that wish to review need to generate their own income and enhance their existing practices. and become meaningful contributors to their communities and the country. The report is expected to stimulate We extend sincere and prosperous further debate and analysis, leading good wishes to these women as they to the identification of minimum use these skills to create a better life standards and good practices for for themselves and their communities.” corporate anti-corruption policies and measures. UNODC has acknowledged the contribution made by PwC Austria, on a pro bono basis, for the benefit of the private sector. Global Annual Review 2010 23
  • 32. The journey to sustainability Hour campaign. Engagement withPwC Australia has moved to In Australia, PwC continued its environmental initiatives continuesusing 66% renewable energy, environmental sustainability journey to grow among its people. This was during FY 2010. PwC Australia has demonstrated by an internal campaignand has again offset all its moved to using 66% renewable energy, entitled ‘How Low Can You Go?’ inresidual carbon emissions to and has again offset all its residual which service teams across Assurancemaintain carbon neutrality. carbon emissions to maintain carbon in Australia competed in reducing neutrality. During the year, PwC the environmental footprint of their Australia continued to improve its engagements. processes for collecting and reporting environmental data, and achieved The Australian firm was also a platinum reductions in electricity usage, paper sponsor of the Australasian Cleantech consumption and waste to landfill. Forum for the sixth successive year. The Corporate Responsibility Index Held over three days, the forum was score for Environmental Management attended by more than 500 delegates increased dramatically, from 46% to including industry pioneers, local and 88%, illustrating the many improvements international Cleantech companies and to its environmental objectives, targets, members of the local and international reporting, employee engagement capital markets community. A number and communication. of PwC Australia partners and Cleantech specialists participated. Support for PwC Australia’s two environmental charity partners in FY 2010 included more than 480 volunteer days provided to Landcare for Revegetation programmes, and participation in the WWF Earth24 PwC
  • 33. We have moved to using66%renewable energyPwC Australia Our people have spent 7,058 hours volunteering in their communities during FY 2010 PwC China/Hong Kong To date, more than 20,000 entrepreneurs successfully trained PwC South Africa Global Annual Review 2010 25
  • 34. TransparencyCommitted to sharing information26 PwC
  • 35. It is the breadth and consistency Legal structure, ownership and of our network that differentiates network arrangements PwC among the world’s leading Network arrangements and professional services organisations. member firms In most parts of the world, the right The PwC network has a set of standards to practise audit and accountancy is with which all PwC member firms agree granted only to national firms that are to comply. These standards cover key majority-owned by locally qualified areas such as independence and risk professionals. PwC is a global network management, people management, of separate member firms, owned andIt is the breadth and brand and communications. operating locally in countries around the world. PwC member firms are membersconsistency of our network In order to use the PwC name, PwC of PricewaterhouseCoopers Internationalthat differentiates PwC member firms agree to follow network Limited and have the right to use theamong the world’s leading standards and be subject to periodic PricewaterhouseCoopers name. reviews. PwC member firms’ complianceprofessional services with the standards of the network is The network provides a platformorganisations. monitored regularly. on which member firms can share knowledge, skills and resources, We believe in the principle of enabling PwC member firms to transparency. In this chapter we work together to provide high- share some detail of the PwC network’s quality services on a global scale to organisation, standards and processes, international and local clients while including specifics in relation to still operating as local businesses. independence, remuneration and continuing education. PricewaterhouseCoopers International Limited PricewaterhouseCoopers International Limited (PwCIL) is a UK private company limited by guarantee in which PwC firms are members. PwCIL does not provide services to clients. It also neither manages nor controls PwC member firms. Its primary activities are to: identify broad market opportunitiesand develop associated strategies; strengthen internal services, skill and knowledge networks; promote the PwC brand; and develop and support application of common risk, quality and independence standards by PwC member firms. Global Annual Review 2010 27
  • 36. PwCIL governance bodiesGlobal BoardThe Board is responsible for the PwC member firms nurture a culturegovernance of PwCIL and the PwCnetwork and oversight of the NetworkLeadership Team. The Board doesnot have an external role. Boardmembers are elected by partners that supports andfrom all PwC member firms everyfour years, with the current board encourages all PwC people to do thetaking up office in April 2009.Network Leadership TeamThe Network Leadership Team setsthe overall strategy for the PwC right thingnetwork and the standards to whichmember firms agree to adhere.Strategy CouncilThe Strategy Council, which is madeup of the leaders of the largest PwCmember firms, agrees changes in the Standards and internal quality The way we do businessstrategic direction of the network and control systems PwC member firms conduct theirfacilitates alignment in the execution A member firm’s membership in the PwC businesses within the framework ofof strategy. network depends on its implementation applicable professional standards, of common standards. Every PwC laws, regulations and internal policies.Network Executive Team member firm is fully responsible for These are supplemented by a Code ofThe Network Executive Team reports its own risk and quality performance Conduct for their partners and staff.to the Network Leadership Team and and, where necessary, for drivingcoordinates key service line and improvements. To support transparency PwC people have an obligation tofunctional areas such as Risk and and consistency, each member firm’s know, understand and comply withQuality, Human Capital, Operations, Territory Senior Partner signs an annual the guidelines contained in the Codeand Brand and Communications confirmation of compliance with certain as well as the values – Excellence,across the PwC network. standards. As stated above, these cover Teamwork and Leadership – on which a range of areas, including independence, the guidelines are based. ethics and business conduct, Assurance, Advisory and Tax risk management, Sustainable culture governance and data protection To promote continuing business success, and privacy. PwC member firms nurture a culture that supports and encourages all PwC There are some common processes people to do the right thing, especially to help member firms apply the when they have to make tough decisions. standards. Key elements include: PwC people have ready access to a wide array of support networks within their • the way we do business respective member firms – both formal • sustainable culture and informal – and technical panels to help them reach appropriate solutions. • quality policies and processes There is also a culture of cooperation • quality reviews between member firms, and consultation supports this culture.28 PwC
  • 37. Quality policies and processes professional standards. This includesMethodologies and materials Each PwC member firm has policies carrying out independent reviews atare designed to assist member that are based on global standards. the management level of a member Member firms also have access to a firm’s systems and procedures, andfirm partners and staff. number of common methodologies and monitoring whether each member supporting materials for many services; firm conducts objective quality control these methodologies and materials are reviews and engagement reviews designed to assist member firm partners consistent with the member firm’s and staff. Each client engagement partner and PwCIL’s established processes. is responsible for selecting partners and PwCIL also monitors whether a member staff for a particular engagement with firm has appropriately identified the appropriate professional competence significant risks to the PwC brand, and experience. strategy and network. Quality reviews For Assurance work, the relevant Each member firm is responsible for standard on which the Quality Reviews monitoring the effectiveness of its are based is International Standard on quality control systems. This includes Quality Control 1: ‘Quality Control for performing a self-assessment of its Firms that Perform Audits and Reviews systems and procedures and carrying of Historical Financial Information, and out – or arranging to have carried out Other Assurance and Related Services on its behalf – independent reviews Engagements’ (‘ISQC1’). at the individual engagement level. In addition, PwCIL monitors member The overriding objective of the quality firms’ compliance with network and review programme is to assess for each member firm that: • quality management systems are effective and comply with network and risk management standards • engagements selected for review were performed in accordance with professional standards and PwC Audit requirements • the member firm is appropriately managing significant risks of relevance to the network Global Annual Review 2010 29
  • 38. Independence practices held against an ‘Independence List’Policy of prohibited securities. Joint businessAuditor objectivity is a frame of mind relationships are required to be approved,that PwC member firms reinforce through recorded and regularly monitored.a combination of setting the right tone PwC member firms are also requiredfrom the top, regular training and to obtain authorisation from the leadcareful observance of independence audit engagement partner regardingrequirements. the provision of non-audit and, in certain situations, audit services, toPwC’s Independence Policy – based entities on the ‘Independence List’.on the International Ethics StandardsBoard for Accountants’ Code of Ethics As well as these and other compliance-for Professional Accountants1 – sets out monitoring systems, PwC member firmsthe minimum standards and requirements have certain confirmation and verificationthat should be observed by PwC member processes, including: Auditor objectivity is afirms and their people, and the processes • annual compliance confirmations, frame of mind that PwCthat are to be followed to maintainindependence from their clients. PwC and member firms reinforcemember firms may impose supplementary • inspection and compliance-testing through a combination ofindependence restrictions and processes programmes setting the right tone fromby reference to local regulatory andethical requirements. Details of any Violations the top, regular trainingsuch requirements having cross-border PwC member firms are required to have and careful observance of disciplinary policies and mechanisms toeffect are communicated throughout promote compliance with policies and independence requirements.the network. processes and to report and address any violations of independence requirements.Training In addition, member firms are requiredComputer-based training modules on to report any violations of cross-borderthe PwC Independence Policy and independence regulations affecting auditrelated topics have been made available appointments of other member firms.to all PwC member firms. Similar trainingmaterials for face-to-face training have Partner remunerationalso been developed. Individual PwC An essential element of PwC’s ethosmember firms supplement these training is a set of common principles formaterials with training materials partner remuneration, based on partnertailored to reflect any local requirements. performance and quality of work.The Assurance, Tax and Advisory These principles suggest that all PwCpractices also deliver local training member firms’ partner remunerationprogrammes and materials dealing with systems should include three coreindependence considerations related to elements to reward their partners:the provision of services to assurance first, the role they are asked to play inclients. New joiners are trained in the the partnership; second, how well theyPwC Independence Policy, whichever carry out their responsibilities; andpart of the practice they join. third, how well their individual firm performs as a whole. The underlyingCompliance premise of the partner income philosophyCompliance processes rely on a is to encourage, recognise and rewardcombination of business activities partners, both as individuals and asand monitoring systems. Partners and members of teams, based on theirclient-facing managers in all PwC contribution to their respective firms.member firms are required to recordthe details of their investment portfolioson a confidential database that providesreal-time monitoring of investments1 Previously referred to as the International Federation of Accountants’ Code of Ethics30 PwC
  • 39. 162,000 With some 162,000 people across PwC’s member firms, providingThe successful execution of PwC member continuous education throughoutfirms’ partner income arrangements,including delivery of actual rewards, each professional’s career is ahinges on a balanced scorecard evaluationagainst individual and team objectives. major challenge. MechanismsThe performance-rewards structurerespects the regulatory environment have been put in place at all levelsin which PwC member firms operate,and each PwC member firm maintains to help achieve this goal.and operates a separate compensationsystem for both its partners and staff.Continuing educationThe PwC approach to learning and There are also focused programmes With some 162,000 people across PwC’seducation (L&E) is to provide access to for people with special roles or who member firms, providing continuousa wide curriculum of courses developed serve clients with unique characteristics. education throughout each professional’sto global standards, while also providing These individuals include Quality Review career is a major challenge. Mechanismssupport for member firm L&E leadership Partners; people leading multi-location have been put in place at all levels –and fostering personal accountability audits or engagements with shared individual, member firm and network –for continuous education. service centres; and those serving clients to help achieve this goal. PwC member around the globe who are listed on US firm L&E leaders are responsible forPwC member firms are committed to stock exchanges. reporting their training plans for thedelivering quality audits around the year and, at year-end, their actualworld. To help them do this, a common Key areas of focus in the past year have delivery of training to the target audiencecurriculum gives Assurance practitioners included the development and roll-out for each programme.within PwC member firms, as well as of training on PwC’s new audit platformspecialists in Advisory and Tax who (known as Aura), the continuedprovide audit support, access to courses enhancement of an Internationalcovering the PwC audit approach and Financial Reporting Standards (IFRS)tools, updates on audit and accounting curriculum, and the establishmentstandards and their implications, and of a number of research projects soareas of audit risk and engagement quality. that training within PwC evolves andCourses are developed using best-practice improves, and meets the needs of thelearning designed to meet the needs of practice in the current environment.practitioners. Solutions vary in methodfrom e-learning to classroom coursesthat give practitioners the opportunityto sharpen their professional judgementby sharing insights and experienceswith their instructors and peers. Global Annual Review 2010 31
  • 40. Facts and figures32 PwC
  • 41. Revenues Figure 1: Aggregated revenues of PwC member firms by service line (US$ millions)Overall, gross revenues for the 12-monthperiod were up slightly at US$ 26.6 FY10 FY09 % change % change at FY10 at FY09 at constantbillion at constant rates of exchange. ex. rates ex. rates ex. rateAt variable exchange rates, FY 2010 Assurance 13,273 13,290 -1.3% -0.1%global gross revenues grew 1.5%. Advisory 6,206 5,668 7.9% 9.5%PwC global revenues reflect the Tax 7,090 7,213 -2.9% -1.7%realisation by PwC firms of the need to Total 26,569 26,171 0.3% 1.5%manage through the recession without FY10 revenues are expressed in US dollars at average FY10 exchange rates. FY09 revenues are shown at average FY09losing sight of the potential for growth exchange rates for continuing operations. Gross revenues are inclusive of expenses billed to clients.in the recovery. Fiscal year ends 30 June. FY09 revenues have been reallocated between service lines to reflect the current organisation.After a slow start, overall performanceimproved consistently over the courseof the fiscal year. Demand for services late year improvements in both thewas up slightly, especially in the consulting and deals sectors, as wellemerging markets, though it was as the acquisition in FY 2009 of theoffset by a relentless pressure on rates. BearingPoint advisory businesses inAdditionally, many PwC firms maintained the US and Japan. Overall, revenuesleading positions in their markets, an from consulting grew by 15%.indication of the strength and depth We anticipate that Advisory willof the PwC network. continue to be a prime source of future growth for PwC firms, both throughAmong the lines of service, PwC’s organic expansion and continuedAdvisory business returned to strong strategic acquisitions.growth in FY 2010 with revenues ofUS$ 6.2 billion, up 7.9% from the previous Global revenues in our flagship Assurance12 months. Advisory results reflected practice held up well, given the economic conditions, at US$ 13.3 billion. Despite the sluggish economy, demand for Assurance services rose slightly, but was more than offset by pricing pressure in a fiercely competitive marketplace. Our Assurance practice also continued to make investments in service quality. Global Tax revenues showed improvement as the year progressed to reach US$ 7.1 billion, down slightly due to the slowdown in corporate deals and restructuring work. Global Annual Review 2010 33
  • 42. Figure 2: Aggregated revenues of PwC member firms by region (US$ millions) As with the overall economic recovery, FY10 FY09 % change % change results for PwC firms varied widely by at FY10 at FY09 at constant region. In Asia, PwC firms’ revenues ex. rates ex. rates ex. rate grew by 8.2% and in the Middle EastAsia 2,935 2,627 8.2% 11.7% and Africa region revenues rose byAustralasia and Pacific Islands 1,293 1,176 -3.3% 10.0% 8.5%. PwC firms’ continued expansionCentral and Eastern Europe 726 778 -5.1% -6.6% in these regions is an indication of theirWestern Europe 11,062 11,155 -0.6% -0.8% increasing importance to the future of the PwC network. In Western Europe,Middle East and Africa 823 704 8.5% 16.9% revenues held steady. While in theNorth America and the Caribbean 8,952 9,032 -1.7% -0.9% North America and Caribbean region,South and Central America 778 699 11.9% 11.3% revenues dipped by 1.7%.Total 26,569 26,171 0.3% 1.5% Results also varied widely by memberFY10 revenues are expressed in US dollars at average FY10 exchange rates. FY09 revenues are shown at average FY09exchange rates for continuing operations. Gross revenues are inclusive of expenses billed to clients. firm. Among the fast-growing economies,Fiscal year ends 30 June. revenues rose 11.1% in Korea, 8.5% in Mexico, and 6.2% in China. Revenues also increased in more developed economies, including Spain, the UK,Figure 3: PwC’s service line mix (2006-2010) at constant exchange rates Germany and Canada. Revenues declined slightly in the US. 7,090 7,300 7,319 6,506 5,656 6,206 5,753 5,925 5,216 4,536 13,273 13,446 13,177 12,799 11,909 FY10 FY09 FY08 FY07 FY06 Assurance Advisory TaxFY09 and prior year revenues have been reallocated between service lines to reflect the current organisation.34 PwC
  • 43. Figure 4: Aggregated revenues by industry sector (percentage of revenue) Industrial products 21.0 Banking & capital markets 13.0 Asset management 11.7 Retail & consumer 10.0 Energy, utilities & mining 8.2 Technology 6.4 Government & public sector 6.3 Insurance 5.3 Entertainment & media 4.0Pharmaceuticals & life sciences 3.8 Automotive 3.0 Information & communications 2.6 Healthcare 2.4 By delivering services through a number of industry sectors, we are able to draw Professional services 2.3 upon our latest thinking, research and expertise to help clients bring increased value to their businesses. Looking at PwC firms’ revenues on an industry basis, there were particularly encouraging results in banking and capital markets, pharmaceuticals and life sciences, and government and public sector. Global Annual Review 2010 35
  • 44. Figure 5: Global and regional client bases FT Global 500 Fortune FT Global 500 Global 500 FT Europe 500 Fortune Global 500 FT Europe 500 All other All other companies in 17% 17% 17% companies in 17% 30% PwC audit 29% 30% 26% 29% 29% PwC audit26% 29% index/list client companies index/list FT Global 500 client companies Fortune Global 50 in index/list in index/list 53% 17% 17% 54% 53% 45% 54% 45% PwC non-audit PwC non-audit 30% 29% client companies client companies in index/list in index/list Fortune 500 (US) S&P Asia 50 Fortune 500 (US) S&P Latin America 40 S&P Asia 50 53% S&P Latin America 4 54% 25% 29% 25% 33% 36% 33% 36% 34% 29% 39% 34% Fortune Global 500 FT Europe 500 Fortune 500 (US) S&P Asia 39% 50 All other All other 17% companies in 29% 26%46% 29% PwC audit 30% 46% companies in 28% 25% 30% 29% PwC audit 28% index/list 36% 34% FT Global 500 index/list FortuneFT Global 500 Global 500 client companies 500 FT Europe Global 500 Fortune FT Europe 500 client companies in index/list in index/list 17% 17% 17% PwC audit client companies in index/list 17% PwC non-audit client companies in index/listindex/list other PwC 26% in index/list 54% 30% 45% 29% 30% 26% PwC audit client companies in 29% 29% All companies 46% companies in index/list non-audit client 29% All other companies in index/li 30% PwC non-audit PwC non-audit client companies client companies in index/list in index/list 53% S&P Asia 50 54% 53% S&P Latin America 40 45% 54% 45% PwC audit client companies in index/list PwC non-audit client compan 36% 34% 33% Fortune 500 (US) 39% Fortune 500 (US) S&P Asia 50 S&P Asia 50 S&P Latin America 40 S&P Latin America 40 All other All other 25% 30% companies in 28% 25% PwC audit companies in PwC audit 29% 34% 29% 33% 36% 33% index/list 36% client companies 39% 34% index/list 39% client companies in index/list in index/list 46%PwC non-audit client companies in index/list All other companies46% 30% in index/list 28% 30% 28% PwC non-audit PwC non-audit client companies client companies in index/list in index/list PwC audit client companies in index/list PwC audit client companies in index/list otherPwC non-auditindex/list PwC non-audit client companies in index/list All companies in client companies in index/list All other companies in index/list Audit clients include both sole and joint audit appointments. Other clients disclosed as companies where PwC revenues exceed 500,000 US$ in FY10. 36 PwC
  • 45. Clients Figure 6: PwC member firms’ aggregated revenues by size of clientAround the world, clients rely on PwCto help them explore opportunities Client company revenues greaterand deal with complex business than or equal to 10 billion US$challenges. We work closely with 27%them to create value and help them Client revenues less 49%succeed, tapping into the breadth ofthe PwC network and our in-depth than 250 million US$, including not-for-profit, 24%industry expertise. government and public sectors Client company revenues lessThe clients of PwC member firms than 10 billion US$ and greateraround the world range from the than or equal to 250 million US$largest and most complex organisationsto innovative entrepreneurs. Services Estimates based on market data representing 98% of aggregated revenues of PwC firms in FY10. Client company revenues as reported by public record.are tailored to match the needs ofall clients, depending on their size,location and specific needs.In FY 2010, PwC member firmsprovided services for 415 of thecompanies in the Fortune Global 500 Figure 7: PwC member firm clients as a percentage of the Fortune Global 500and 415 of the companies in the FTGlobal 500. In addition, PwC member Automotive 37firms served significantly more than 93half of the largest companies in each Banking & capital markets 32 & investment managementregional market during the year. 90 & real estate Energy, utilities 25PwC member firms around the world & mining 67have a broad mix of clients. The share 25 Entertainmentof revenues from smaller clients, private & media 88entities, not-for-profit organisations and Healthcare & 39the public sector was 49% of PwC firms’ pharmaceuticals 91total revenues in FY 2010, compared Industrial 25with 24% for mid-sized companies and products 8127% for large companies. Information & 26 communications 95 41 Insurance 87 Retail & 26 consumer 80 24 Technology 97 Audit clients Total clients Audit clients include both sole and joint audits. Other clients defined as companies where PwC revenues exceeded 500,000 US$ in FY10. Global Annual Review 2010 37
  • 46. PwC people 2010 Figure 8: PwC member firms’ people, June 2010 PwC people 2010 2009 2008161,718 Partners 8,625 8,552 8,603 Client service staff 122,967 123,548 116,935 Practice support staff 30,126 31,445 30,155 Total 161,718 163,545 155,693 Figure 9: Headcount by region PwC people 2010 2009 Growth Asia 32,225 32,756 -2% Australasia and Pacific Islands 6,850 6,829 0% Central and Eastern Europe 6,837 6,860 0% Western Europe 57,702 58,457 -1% Middle East and Africa 10,033 9,427 6% North America and the Caribbean 37,643 39,142 -4% South and Central America 10,428 10,074 4% Total 161,718 163,545 -1% People The combined headcount of PwC People are at the heart of our organisation. member firms is more than 161,000, They are behind our every success. a decrease of 1% during FY 2010 and up We are committed to helping people from about 118,000 at the time of the achieve the value they are looking for. formation of PwC in 1998. The changes Once they join PwC, we develop, guide in headcount varied considerably across and motivate them to give their best. the network, reflecting the differing If they decide to leave, we stay in touch. local economic conditions. 38 PwC
  • 47. Figure 10: PwC people by lines of serviceSupport staff 13% Tax 22% 45% Assurance 20% AdvisoryFigure 11: PwC people by region Central and Eastern Europe 4%Australasia and Pacific Islands 4% 36% Western Europe Asia 20% 6% 6% South and Central America Middle East and Africa 24% North America and the Caribbean Global Annual Review 2010 39
  • 48. To create value for clients, we must business students from top academicattract outstanding talent. Recent institutions in Canada, China, France,student surveys have once again Germany, India, Italy, Japan, Russia,revealed that PwC firms continue to Spain, the UK and the US.be top employers in our profession inmany key markets around the world As competition for quality people(Figure 12). Globally, we were ranked continues to be fierce, improvingsecond in Universum’s first-ever list retention rates is an area we willof ‘The World’s Top 50 Most Attractive strongly focus on in FY 2011.Employers’, which is based on theemployer preferences of nearly 120,000 Figure 12: PwC ranking in student surveys Rank in Big Four Rank among all employers FY10 FY09 FY10 FY09 China 1 1 12 10 Czech Republic 1 1 8 10 Germany 1 3 8 10 Poland 1 1 1 1 Sweden 2 2 6 4 Switzerland 1 1 9 6 UK 1 1 1 1 US 2 2 3 3 Pan-European 1 1 7 6 Global* 1 2 Sources: China (Universum Graduate Survey), Czech Republic (Trendence Survey), Germany (Trendence Survey), Poland (AIESEC survey), Sweden (Universum Graduate Survey), Switzerland (Universum Graduate Survey), United Kingdom (The Times Student Survey of top Graduate Employers), United States (Universum Graduate Survey), Pan-European (Universum Graduate Survey), Global (Global Universum Survey). *Global Universum Survey issued for the first time 200940 PwC
  • 49. People: Key totomorrow’s successNorbert WinkeljohannPwC Germany senior partner and memberof the Network Leadership Team
  • 50. Talent is one of the most important assets Clearly there is danger in demandingto business – for all companies, large and an ever-greater contribution fromsmall alike, around the world. Attracting employees. Employers who push theirand retaining talented staff is vital to the workers to deliver more, but fail tosuccess of any business organisation. monitor, review and appreciate the impacts, may well end up damagingHowever, the tough business environment their own business. If employees’ moraleof the past two years has required many declines they may lose their sense ofcompanies around the world to make loyalty to the business and will then besome hard decisions. To get through the more likely to leave. Once more favourableglobal economic crisis, some had to cut economic conditions return this couldtheir spending on people or were forced result in a mass exodus of talent.to make redundancies in order to survive.Even now, as businesses return to making At PwC, we recognise that our futurepreparations for growth, many are depends on our ability to attract andmindful that taking on new employees retain talented people. So we continue toat a time when more volatility is expected invest heavily in learning and educationcould expose them to new risks. As a – in the form of challenging developmentresult, existing employees have to do programmes for all our people –more with less. including opportunities for many to work outside their home countries. Talent isThere is growing evidence that this our biggest asset. We are a peoplesituation is having an impact on employee business and are thankful for the hardmorale and loyalty. Earlier this year we work with which our people provide usconducted a survey of 5,000 professionals and our clients every day. We believeworldwide. The findings suggested that that businesses that work hard now atemployees are feeling under pressure, sustaining and strengthening the bondwith large numbers of respondents of trust with their people and innovatinghoping for a better work-life balance in around recruitment, retention andthe future, and approximately a third learning and development will be thesaying they would prefer to work for ones that are still thriving in 10 to 15themselves. years’ time.
  • 51. Diversity & Inclusion at PwC In 2010, PwC has been named a ‘TopDiversityInc, a leading Our goal is to leverage the diversity Company for Global Diversity’ for thepublication on diversity of the 162,000 people in PwC firms third year in a row by DiversityInc, to provide a distinctive experience a leading publication on diversity inin the workplace, selected for our people and clients. To achieve the workplace. DiversityInc selectedPwC for being at the this aim, we need to be relentless in PwC for being at the forefront offorefront of awareness our drive to enhance our cultural awareness training and mentoring. dexterity. We define ‘cultural dexterity’ The PwC firms in France and Malaysiatraining and mentoring. as the ability to work effectively across were also named as the top companies all differences – including gender, for exceptional progress of women to age, ethnicity, nationality, and indeed leadership roles and tone from the top. personality and thinking style. Cultural dexterity is an amalgamation PwC’s Gender Agenda blog was featured of skills that includes self-awareness, in a Washington Post article in August understanding, openmindedness 2010 on women’s networks. “The very and empathy. best women’s initiatives engage people in multiple formats. Given decentralized, PwC’s Global Diversity & Inclusion global workforces, the in-house Council (GD&I Council) works across ‘lunch and learn’ is no longer enough. the PwC network to identify globally PricewaterhouseCoopers has managed relevant actions that will enhance the to continue the conversation with men cultural dexterity of our people and and women through a multifaceted teams, and help advance a diverse range blog, which sends a powerful message of people to leadership roles. Examples that PwC’s Global Gender Advisory of these actions include our leadership Council provides advice on the issue diversity awareness training. of diversity directly to PwC’s Chairman, Dennis Nally.” We focus on all dimensions of diversity at the network level, including gender. Additionally, we work with organisations We are proud of what we have achieved such as Catalyst, Diversity Best Practices, but continuously seek to improve. Working Mother, Opportunity Now, the Women’s Forum for the Economy At this year’s World Economic Forum and Society, and the World Bank on in Davos, Dennis Nally, Chairman programmes to support, develop and of PricewaterhouseCoopers International, retain our people. Around our network participated in a CNBC televised panel we continue to invest in mentoring debate with CEOs, journalists and schemes, role modelling and networking academics, entitled ‘The Gender Agenda: groups, and coaching and awareness Why Sex Matters’. The panel called training programmes. Details can be for a renewed sense of urgency around found at www.pwc.com/women. women’s global economic participation, as well as increased mobility and flexibility. Global Annual Review 2010 41
  • 52. Genesis Park, PwC’s flagship leadership development programme, is focused on developing global business leaders Global mobilityMoving our people to Moving our talented people to different We continue to invest heavily in locations around the world to match client our global mobility programme.different locations around and business needs is key to enabling us In FY 2010, we added another 1,600the world to match client to offer the right expertise at the right new participants to our secondmentand business needs is key to time. An experience abroad also develops programme, up from 1,400 in FY 2009. the global business skills and international As the economic recovery gathersenabling us to offer the right experience of our people. During the pace, we anticipate a further increaseexpertise at the right time. past year, some 2,700 partners and staff in opportunities for our people to gain (2009: 2,866) from PwC member firms an experience abroad in FY 2011. in 94 countries (2009: 100 countries) were transferred internationally or were posted on short-term and long-term international assignments. Figure 13: Global mobility programme – number of new assignments FY10 FY09 FY08 Long-term assignments 945 713 949 Short-term assignments 685 713 930 Total 1,630 1,426 1,87942 PwC
  • 53. Development programmes business today. Competing views areThe same principles of Genesis Park: Developing global debated, with a strong emphasis on theempathy, collaboration, business leaders importance of examining issues from Companies operate today in an multiple perspectives. Participants alsorelationship-building increasingly complex, fast-moving and undertake strategic projects dealing withand service described by globalised business environment. Such high-priority business issues in whichthe PwC Experience are an environment demands leaders with project teams must demonstrate a strong the intellectual rigour and strategic vision commercial sense and take into accountalso embedded in our to set a broad global agenda for their the implications of their recommendations.methods and curricula. businesses, combined with the ability to motivate and bring cohesion to a While teaching ‘hard’ business skills culturally diverse and geographically is an important part of our mission, dispersed workforce. Genesis Park also focuses on developing the kind of emotional intelligence that Genesis Park, PwC’s flagship leadership is at the heart of the PwC Experience. development programme, is focused The principles of empathy, collaboration, on developing these kinds of global relationship-building and service business leaders. described by the PwC Experience are also embedded in our methods and The Park focuses its efforts on PwC curricula. staff members from PwC firms around the world who are recognised as high In 2011, Genesis Park will change to performers and have demonstrated clear a ten-week residency programme leadership potential. First established operating from April to October in three in 2001, Genesis Park now has over 500 cities around the world: Singapore, alumni from more than 40 countries. Boston and Warsaw. These sites will With the participants’ diverse mix of change annually. Genesis Park will nationalities and backgrounds, Genesis now be mobile and will involve a global Park is able to simulate the challenges faculty – including from the host country of working across a global organisation. – as well as global participants. In this way, we expose participants to different cultural and working styles – Serving 120 to 150 participants annually, and more importantly, help them to a significant number of PwC’s key talent embrace these differences so they can will become distinctive global leaders, operate effectively as a team and learn able to deliver to clients with truly how to create tangible value for clients. global mindset. Genesis Park’s curriculum provides a window onto the kinds of complex knowledge that a global business leader must master. Participants engage PwC leaders in discussions focusing on clients, strategy and emerging issues shaping Global Annual Review 2010 43
  • 54. Advisory Universities Assurance curriculum PwC’s Advisory Universities (AU) Whenever international auditing are premier learning events for standards change or are updated, Advisory professionals, which also we conduct a thorough review of the provide a platform for networking curriculum that we offer Assurance opportunities, knowledge sharing practitioners. and business development. In recognition of the fact that standards Although the AU focus on offering need to be understandable and clear, technical sessions, they also include the International Auditing and programmes that aim to boost the Assurance Standards Board (IAASB) participants’ ‘soft’ people and business launched a comprehensive programme skills. These skills include building in 2004 to enhance the clarity of its and maintaining relationships, International Standards on Auditing communicating with impact and (ISAs). The work was completed in empathy, and developing business February 2009, with the result that perspective and acumen. auditors worldwide now have access to 36 newly updated and clarified ISAs Around 7,000 Advisory professionals and a clarified International Standard from different parts of the world on Quality Control (ISQC). participated in AU in FY 2010. AU learning opportunities exist in As part of bringing practitioners fully various formats, including face-to-face up-to-speed with the changes, we courses, virtual training sessions and developed a new learning programme self-study modules. aimed at PwC managers to partners across the network. Piloted in Toronto, the programme has since been released for use around the world.The Advisory Universities include programmes that aim to The programme combines the use ofboost the participants’ ‘soft’ people and business skills. a diagnostic tool with hands-on case studies on how to apply the ISAs that underwent the most significant change, and an e-learning module to address the ISAs where the impact was less significant.44 PwC
  • 55. PwC Open University Corporate responsibilityWe wanted to extend that Launched in June 2010, PwC Open in numberslearning opportunity to our University is a first-of-its-kind corporate PwC member firms around the world educational resource that provides engage with their local communitiesclients, future employees and business executives, faculty, students in many different ways, to make a realthe business community. and regulators around the world free difference. During FY 2010, the level access to an expansive and growing of donations we made to charitable library of award-winning training organisations, the number of hours of courseware developed by PwC. Today, free or heavily discounted professional visitors will find over 150 courses services we provided to community spanning multiple industries and topics, organisations, and the amount of time many of which are CPE (Continuing our people spent volunteering in the Professional Education) eligible. community were once again very good, despite the difficult economic “As we continue to become a more conditions. This reflects our strong recognised provider of learning and commitment to playing a leading role education to our employees, we wanted in achieving a sustainable future and to extend that learning opportunity to helping to create the sort of value that our clients, future employees and the will benefit generations to come. business community,” explains Mitra Best, PwC US Innovation Leader. For three consecutive years, PwC US has ranked No. 1 in Training magazine’s ‘Training Top 125’. To access the library of courses, visit www.pwc.com/ openuniversity. Figure 14 Giving (US$) FY10 53.5 million FY09 54 million FY08 51 million Provision of professional services/corporate community leadership FY10 310,173 FY09 350,000 FY08 253,000 Volunteering hours FY10 213,145 FY09 226,000 FY08 208,576 Global Annual Review 2010 45
  • 56. Leadership listsGlobal Board Network Leadership Team Dennis M. Nally ChairmanBrad Oltmanns, Chairman United States Bob Moritz United StatesNoël Albertus France Ian Powell United KingdomSusan Allen Canada Norbert Winkeljohann GermanyMark Boyer United States Silas Yang ChinaMarco Castro BrazilPeter Clemedtson Sweden Strategy CouncilMary Ann Cloyd United States Dennis M. Nally ChairmanGerry Lagerberg United Kingdom Kyung-Tae Ahn KoreaMurray Legg United Kingdom Gautam Banerjee India and SingaporeTim Lui China Ezio Bassi ItalyJohn Maxwell United States Chris Clark CanadaBruce Morgan Australia Fernando Alves BrazilMike Morrow United States Koji Hatsukawa JapanDidier Mouget Luxembourg Warwick Hunt Middle EastChristoph Schreiber Germany Mark Johnson AustraliaRich Sharko Russia Suresh Kana Southern AfricaPeter Tieleman Netherlands Mike Kubena Central and Eastern EuropeMatt Wyborn Japan Carlos Mas Spain Bob Moritz United States Markus Neuhaus Switzerland Ian Powell United Kingdom Javier Soni Mexico Henrik Steinbrecher Sweden Robert Swaak Netherlands Serge Villepelet France Norbert Winkeljohann Germany Silas Yang China46 PwC
  • 57. Network Executive TeamDonald Almeida Clients and MarketsPaul Boorman OperationsPierre Coll Risk and QualityRichard Collier-Keywood TaxIan Dilks Public Policy and Regulatory AffairsMoira Elms Brand and CommunicationsDennis Finn PeopleChristopher Kelkar StrategyJan Konerding Vice ChairmanDonald McGovern AssuranceMarkus Neuhaus PwC ExperienceJuan Pujadas AdvisoryWolfgang Richter TechnologyJavier Rubinstein General Counsel Global Annual Review 2010 47
  • 58. 415 In FY 2010, PwC member firms provided services for 415 of the companies in the Fortune Global 500 and 415 of the companies in the FT Global 500. In addition, PwC member firms served significantly more than half of the largest companies in each regional market during the year.48 PwC
  • 59. PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwCnetwork share their thinking, experience and solutions to develop fresh perspectives and practical advice. See pwc.com for more information.“PwC” is the brand under which member firms of PricewaterhouseCoopers International Limited (PwCIL) operate and provide services. Together, these firms form the PwC network.Each firm in the network is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is notresponsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way.© 2010 PricewaterhouseCoopers. All rights reserved.Designed by studioec4 20303 (09/10) The 2010 PricewaterhouseCoopers Global Annual Review has been printed at a carbon neutral ISO 140001 accredited plant using Forest Stewardship Council (FSC) accredited paper stock.
  • 60. www.pwc.com/annualreview