On the money with Gavin Hinks
What’s happening over at Ernst & Young?
First Jock Lennox, the man who would be king (he failed in his bid against
Mark Otty to win leadership of the firm) leaves for early retirement, and now we
learn the firm’s UK head of tax, Paul Davies has accepted a position as partner
at PricewaterhouseCoopers.
Moves likes the Davies one are quite rare. If you manage to make a senior
position like leading a service line in a Big Four firm, you tend to stick
around for the rest of your career before either taking a cushy portfolio
position, becoming an FD of some lauded FTSE250 outfit with good prospects or
taking a comfy pension-building role at a regulator. Rarely do you want to
defect so much you take what, on the face of it, looks like a lesser role at the
opposition.
Actually, being a partner is being a partner regardless of whether you head
a service line or not so the move shouldn’t really be a step down. But it can
sometimes be a bit like turning your back on family.
What observers will be asking is whether the two departures (both slated for
next year in one way or another) are an indication of more widespread
disaffection among E&Y partners.
It’s entirely possible that there is some unhappiness with the direction that
the firm has taken in bringing 87 national businesses under the management of a
single board run by Otty.
It’s also worth noting that, while the firm is number two in the US, the
business seems to be slipping behind the top two firms in the UK, which turn
over £2bn annually while E&Y does £1.4bn. Of course, that’s no small number,
but the difference speaks of a competitive disadvantage.
Davies said he wanted to work at the leading tax practice in the UK and
globally. Clearly he didn’t think it was E&Y.
Gavin Hinks is editor of Accountancy Age