KPMG bullying allegations “only scratching the surface” in industry

KPMG bullying allegations “only scratching the surface” in industry

As KPMG's Sanjay Thakkar steps down amid a complaint to the FRC, a legal specialist suggests more investigations are likely in professional services

KPMG bullying allegations “only scratching the surface” in industry

After KPMG’s partner Sanjay Thakkar stepped down following a bullying allegation, a legal specialist suggests more investigations are likely in professional services.

KPMG announced last week that Thakkar, who was head of the firm’s deal advisory unit, had stepped down. Two of its senior female partners had previously left the firm in anger at the way the complaint was handled – and now a complaint to the FRC has been made. And insiders say the case has implications for the industry as a whole.

“We’re only scratching the surface” on bullying allegations, says Clare Murray, a conduct and performance legal specialist.

“Particularly in professional services, these issues have just started coming forward, people feel empowered, and there will be far more disclosure – there’ll be far more investigations,” Murray says.

Murray was commenting after the Financial Times reported a KPMG employee had made a formal complaint to the Financial Reporting Council (FRC) over the firm’s response to past allegations levelled at Mr Thakkar.

“I’m not surprised that there’s been a complaint to the regulator,”  says Murray, who is managing partner of specialist employment and partnerships law firm CM Murray, “I’m just surprised that there haven’t been more complaints of this type in the accountancy sector to their professional regulators.”

The FRC commented: “While we do not comment on individual cases we expect audit firms to uphold high standards and for the FRC to be notified of any behavioural issues under our audit firm monitoring approach (AFMAS) where these standards are not met.”

According to the Financial Times, the employees said issues with Mr Thakkar’s conduct had been raised back in 2017 but had been ignored by senior executives. Most recently, KPMG acquitted Mr Thakkar of bullying allegations made by its whistleblowing hotline in September 2018. The two senior female executives resigned in February in protest of how KPMG had dealt with the allegations.

It was subsequently announced that Mr Thakkar has stepped down and will take a leave of absence “in the wider interest of the firm”, an internal email said. 

KPMG declined to comment.

The reputational fallout is also expected to be bad for KPMG, believes Gus Sellitto, managing director of Byfield, the legal and reputational PR consultancy.

“This incident has undoubtedly damaged KPMG’s reputation and called into question its culture and values,” said Sellitto by email. “There is media speculation that it took a damaging article in the national media as the catalyst for other KPMG staff to feel empowered enough to come forward – and for KPMG to take definitive action.

“This also raises questions about the kind of culture that may exist at KPMG and the tension between a firm’s desire to retain its high billers and an obligation to act on staff concerns. KPMG’s is just one in a long line of corporate cultures that is being tested and held up for scrutiny by the media and others as wider societal changes cause us to look at what is, and isn’t, acceptable behaviour,” said Sellitto.

And Murray believes the professional services aren’t taking these kinds of allegation seriously enough, something that should impact on top management’s pay.

Historically, there may have been a bit of a ‘tick box’ approach,” she said. “Instead of that approach, you need to have a top-down buy in, where senior management’s performance in remuneration is attached to it.”

Accounting regulatory bodies have been “very silent” on harassment, believes Murray, despite a Women and Equalities Committee report which highlighted the key role of the regulator in stamping out harassment.

What is the definition of harassment in the workplace?

According to Murray, harassment with an element of discrimination – sex, protected characteristics such as age or disability – has a statutory definition, while harassment without discrimination has an Advisory, Conciliation and Arbitration Service (ACAS) definition.

“The law defines it as ‘unwanted conduct related to a relevant protected characteristic, which has the purpose or effect of violating an individual’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for that individual,” according to the ACAS website.

“It creates a hostile, degrading and humiliating work environment,” adds Murray. “There’s usually a power aspect to it, typically between a senior person and a more junior person.”    

How do I report?

An individual should first consult their employer’s policies on grievances, whistleblowing and complaints, usually to be settled formally, informally or mediatory, according to Murray.

Murray also suggests an individual wishing to pursue this course of action should compile a detailed contemporaneous note of what’s happened – the who, the where, the when, the how – and using evidence – CCTV, email – where possible.

Am I bullying?

“If you have doubt, just don’t do it,” said Murray. “Just stop yourself, whether it’s actions or words, err on the side of caution. Especially if you’re in a position of power, be incredibly mindful of the impact this might have on someone who is dependent on you for their career.”

Murray also suggested that employers should ensure these kinds of questions are dealt with through rigorous training “to set out clear expectations of employees.”

We would like to welcome the Accountancy Age audience to react to this article with their own views, opinions and experiences of harassment in the workplace by commenting on this piece.

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