Leader: Grant Thornton might squeeze into John Lewis’ clothes

A CHANGE is as good as a rest, they say. But Grant Thornton’s outlined changes to its ownership structure seem anything but restful. Exciting, definitely. Destined to succeed? Not so definite.

Its 185 partners have voted overwhelmingly to start a consultation for a ‘shared enterprise model’. In other words, all staff will have a stake in the business, helping with decision-making and sharing in profits. It’s the John Lewis model, effectively.

Over the next three months a consultation will run to help put a structure and processes in place – and begin in July.

The first thing to note is that incoming CEO Sacha Romanovitch has led GT’s oversight board down this road. One can only imagine that current CEO Scott Barnes already has his head down preparing to take on the international chairman role from June.

Secondly, the timescale is surprising. It is in a big hurry to get this project off the sketch pad and implemented. This raises the question as to how much of the plan has already been decided? Will staff get a real say or is it a fait accompli? This is crucial, because a true lack of collaboration and involvement at this stage will bode ill for its ongoing effectiveness and success.

Committee rules

Let’s face it – if HMRC gave three months to consult and then implement a change to tax law there’d be uproar…Then again, HMRC’s changes are rarely welcome.

Grant Thornton talks of becoming ‘bold and agile’, but it will need to avoid becoming bogged down in endless committees and consultations. The  ‘meritocratic/democratic’ business referenced by Romanovitch – John Lewis – has had 150 years to get where it is, with plenty of stumbles along the way.

The biggest departure from the partnership/LLP model has been that followed by the stock-exchange listed consolidators. Among the many fundamental problems they faced, adding another tier of stakeholders above the directors (AKA partners) kept money out of the pockets of those billing for it.

Will Grant Thornton’s partners end up with less in their pocket than they currently do? That 99% of them voted in favour of beginning the consultation, one can assume that they don’t expect that to be the case. There have been suggestions that the new model is in part to move away from the less tax-friendly structure that is the LLP. The proof will be in the accounts – we’ll just have to wait and see.

Momentum overrides distraction

There should be no shying away from this being a difficult and potentially distracting process for the firm – but is does have a lot going for it.

It’s a fantastic way for Sacha Romanovitch to place herself on the accountancy map – Accountancy Age of course showed great prescience in placing her at number two in our Financial Power List at the start of the year.

Any change and modernisation has to be a good thing. Generation Y and Z simply won’t put with up with the old way of doing things. We can certainly see other substantial UK firms struggling to drag themselves into the 21st Century.

Surely such change will be welcomed by current and future clients. Such a progressive attitude will win Grant Thornton a lot of fans.

But whatever happens, it’s going to be an exciting ride and definitely not restful – certainly if partners’ take-home falls.

Kevin Reed is editor of both Accountancy Age and Financial Director

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