KPMG's Rake plans radical change
Radical reorganisation proposals by KPMG’s UK senior partner elect, Mike Rake may help the firm become more like a public company, and help raise the capital it needs for expansion, following the firm’s aborted merger with Ernst & Young.
Rake wants to change the firm’s governance structure to bring specialist non-executive directors onto the board, either from corporates, law firms or consultancies. A committee is already looking into proposals.
“We need people who have external knowledge that cannot be gleaned from internal sources,” said a spokesman.
Plans to set up a UK executive committee to push forward the changes and report directly to Rake are underway. The committee will form a closer circle around Rake to give him tighter control of how strategy is implemented.
The committee will be made up of six senior directors plus Rake, chosen from the 18 partners on the board.
He wants to liberalise the constitution of the board so that a third of the board can be nominated by the partnership appointments panel – a role normally filled solely by the senior partner. Rake will also nominate six partners to the board.
“Liberalising the constitution of the board will create more openness and enable the partnership to have a say in the constitution of the firm,” the spokesman said.
KPMG believes that offering consultants the opportunity to earn an equivalent salary to that of the senior partner will also help its expansionist strategy.
Consultants and partners will receive on-the-spot bonuses for high fee-paying consultancy deals – rather than spend years of service to be eligible for reward.
“Some partners bring in huge fees, but that does not happen every year.
We want to reward those people upfront for performance and to reflect the fact that they may have a brief and productive life with the firm,” the spokesman said.
“This policy is certainly evolutionary. Rake has said that he would not be surprised or unhappy if consultants with top skills were remunerated more that he was within a fiscal year.”
Rake will take over from present incumbent Colin Sharman on 1 October.