PwC: ten years on

by Ian Powell

03 Jul 2008

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Ian Powell, chairman of PwC LLP
Ian Powell, chairman of PwC LLP

If a week is a long time in politics then a decade in our sector probably counts as an eternity. In the ten years since PricewaterhouseCoopers came into existence we have seen some seismic changes across the business environment and the profession.

The ten years have seen challenges associated with globalisation, new business models and the rapid expansion of China, India and other developing nations. There have also been the challenges of economic slowdown, concerns about climate and international security, vast technological advances, threats of pandemics, and the UK, emerging as a largely knowledge based economy.

But as is often the case, with challenges come opportunities and with the emergence of China and India, the two goliaths, we’ve had huge in-flows of companies listing in the UK, foreign direct investment flows and of course rapid emerging market development. All of which, alongside regulatory change, have brought huge demands for services, and an increase in these territories and beyond for support in dealing with the complexities of international business.

I focus on the globalisation aspect of the last ten years because that is precisely why the merger took place.

Clients were at the heart of the decision, we believed better global coverage was essential for their and our success and stronger industry focus would lead to a better choice of resource for our clients.

Ten years ago I was a (relatively) youthful partner working in Manchester on complex turnarounds. I vividly recall the passion that the proposed merger generated. Partners and staff had huge loyalty to their respective firms. However, partners went in to the process with eyes wide open.

Each of the two firms had a strong presence in parts of the world and certain industry sectors, but neither had the kind of global reach or critical mass to be able to serve truly globalised clients, and that point alone convinced many of us of the necessity for merger.

My own thoughts at the time were that the process carried risks but also massive potential for the firm and our clients.

I also felt that the alternative course of action had far greater downsides. Our priority was demonstrating clearly and quickly to our clients and people that there were real tangible benefits and over the last ten years these have been delivered.

In some ways, and with the benefit of hindsight, the way my own career has developed over the past ten years demonstrates the logic of joining the two firms together.

Immediately after the merger I was asked to develop the new firm’s Continental European Restructuring practice and there was a sense of genuine partnership in the newly combined team. So have we achieved what we set out to do? Judging by the case we put forward to our clients, regulators and stakeholders at the time I think the answer is yes.

I recently re-read an article published in Accountancy Age in September 1997 when Ian Brindle, then Price Waterhouse UK Senior Partner, bravely set his stall out and asked that the success of the merger be judged within 12 months. I say bravely because he was talking about bringing together two firms with more than 8,500 partners and 135,000 staff in over 140 countries worldwide.

Last year PwC firms provided services for 368 of the companies in the Fortune 500
and 422 of the companies in the FT Global 500. This pattern is largely replicated outside the UK and US and PwC firms served significantly more than half of the largest companies in each of our regional markets during the year.

Within the firm we were also aware of the needs of our UK focused clients. In the UK today companies outside the FTSE 250 constitute the largest single component of our client base but our range of clients continues to grow and includes private and public sector clients, entrepreneurial private clients and not for profit clients across all networks.

Our merger goal in 1998 was to create a world leading and successful firm that was at the vanguard of being a truly global business. Many competitors seek to emulate our market leading position and it is to the testament of many predecessor partners that they were brave and forward thinking in pursuing these ambitions.

We continue to build on their innovation and I’m proud of the achievements of the last decade, not least the many thousands of qualified PwC trained professionals that operate in the global capital markets and who have emerged, or are emerging, as the next generation of business leaders.

While a lot of things have changed in PwC’s first decade the rationale for creating the firm is as strong today as it has ever been. I look forward, with relish, to leading the firm.

The word on PWC

‘Global is a word you are going to hear a lot of in the coming months.’ Ian Brindle, PW senior partner, Sept 1997

‘We don’t see any pressure from the clients or the market for this merger.’ Colin, now Lord, Sharman, Sept 1997

‘If Coopers & Lybrand and Price Waterhouse succeed in merging, the top partners who initiated the scheme will have pulled off a deal little short of a miracle. Like some immutable law of physics, the bigger professional service firms become, the harder they are to stitch together.’ Peter Williams

Ian Powell is chairman of PricewaterhouseCoopers LLP

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