Chapter 5Culture in the Big 4 consulting firms
5.1The Australian Government's reliance on consultants has increased significantly in recent years, and this has created challenges for the Australian Public Service (APS) and the Australian community. Part of the reason for this is the difference in culture and motivations between the APS and consulting firms, particularly the Big 4: Deloitte, EY, KPMG, and PwC, who collectively share the largest proportion of Australian Government spending on consulting services.
5.2Culture and purpose for an organisation (a company, a partnership, a department, an agency) is important. The leadership of an organisation has a significant influence, for good or bad, on the culture of that organisation. This is because it affects how the entity performs its role, and culture at a micro level is also important because it affects how individual employees perform their jobs and also the working conditions they experience. Cultural differences will be examined in this chapter.
A difference in values and motivation
APS Values and Code of Conduct
5.3The APS Values articulate the parliament's expectations of public servants in terms of performance and standards of behaviour and are set out in section 10 of the Public Service Act 1999 (PS Act). The APS Values require that the APS is: impartial, committed to service, accountable, respectful and ethical. The Australian Public Services Commission (APSC) highlighted that APS employees occupy a position of trust, and as such:
They are entrusted by the Government and the community to undertake important work on their behalf. With this trust comes a high level of responsibility which should be matched by the highest standards of ethical behaviour from each APS employee.
5.4The APS are required by law to act impartially and to provide the government with advice that is ‘frank, honest, timely and based on the best available evidence’. The work of the APS is subject to transparency and accountability mechanisms including freedom of information requests, questioning at Senate Estimates hearings and giving evidence in other forums.
5.5The Big 4 consulting firms each submitted to this inquiry that they hold similar values to the APS. For example, Deloitte listed integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour as its core set of values. EY also stated that its values guide its 'actions and behaviours, influence the ways in which we work with each other, and steer the ways in which we serve our clients and engage with our communities'.
5.6Another consulting firm, Sententia, also considered there is a 'strong correlation between our values and the Australian Government's values of respect, ethics commitment and accountability which aligns with our teams' beliefs to work cohesively and with a common purpose'.
5.7While there is not a universal and clearly articulated set of standards that apply to consulting firms in the way that there is for the APS, some staff in consulting firms are bound by the standards set by the Accounting Professional & Ethical Standards Board Limited (APESB). The aim of APES 110 is to require compliance with the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. APES 110 states that ‘a distinguishing mark of the accountancy profession is its acceptance of responsibility to act in the public interest’. In doing so, the member must not just consider the needs of the individual client or employer, but also the interests of other stakeholders. In at least one consulting firm all the partners are bound by APES: KPMG told the committee that all its partners are required to comply with APES 110. Regulation of consulting firms and their employees is considered in the next chapter.
The bottom line for consultancy services
5.8The motivations of the consulting firms and the APS, at their core, are different and some submitters suggested that this difference in values amounts to an inconsistency in values. Several submitters noted their concern at what they considered to be a clear contradiction in motivations between the APS and consultants. They considered that consultants are primarily concerned with making a profit, whereas the APS works to support the Australian community.
5.9Consulting firms that are private companies are market players who exist to generate profit. According to Per Capita:
…the chief imperative of private companies is to generate profit. Even where they are performing tasks which aim to benefit the public, they are primarily accountable to the interests of their shareholders. They have no obligations to act in the interests of the public.
5.10Dr Damien Williams and Ms Michelle Hornstein also contended that a heavy reliance on consulting services drives commercial or profit-driven outcomes rather than the public interest. Indeed, Dr Alexia Adhikari from the Australia Institute considered that the interests of consulting firms rarely align with the public interest.
5.11Professor Frances Baum also considered that although consultancy firms 'may have some concern for the public good, […] they also have as their bottom line profit, not the public interest'.
5.12The Australia Institute referenced Paul Barratt AO, a former Secretary of the Department of Defence, who observed three ways in which the incentives consultants face are at odds with their objective to advise the government:
as for-profit companies, they have an incentive to minimise costs;
to justify their fees, they have an incentive to recommend novel and sweeping changes; and
as contractors, they do not have to experience the disruption that comes from their recommendations.
5.13Some submitters suggested that one driver in the consulting firms' priority of profit over values is linked to a lack of consequences for disregarding the values they claim to hold. Mr Michael Tull, Assistant National Secretary of the Community and Public Sector Union (CPSU), explained that while the APS has a very clear set of values and a code of conduct, and very clear processes around breaches of the values, including internal disciplinary action and referral for criminal action – the same thing does not apply to consultants.
5.14The APSC noted that the framework of the PS Act does not explicitly provide measures in relation to the integrity of consulting services, or other external sources of labour that agencies may use to complement the APS employee workforce in delivery of their business outcomes. The Department of Foreign Affairs also noted that because contractors are not engaged under the PS Act, 'integrity concerns are not able to be effectively addressed through an administrative process under the APS Code of Conduct'. The Department noted that, where it does identify integrity issues, these will be 'managed directly through contract management processes which may include replacement of the specified personnel nominated in the contract or contract termination under appropriate circumstances'.
5.15The Centre for Public Integrity (CPI) suggested that one way of extending the ethical standards set out in the PS Act to consultants could be to embed the APS values in service contracts.
Reviews of Big 4 culture
5.16Concerns about the culture of the Big 4 consulting firms have been raised previously through reviews including the Switkowski Review and the Broderick Review.
Switkowski Review
5.17In May 2023, as part of its response to the breach of confidential government information by PwC partners, PwC Australia announced a review of its governance, culture and accountability to be led by Dr Ziggy Switkowski AO (the Switkowski Review). The Switkowski Review is examined in detail in the committee's March 2024 report PwC: The Cover-up Worsens the Crime.
5.18PwC Australia released the Switkowski Review, including its 23 recommendations, on 27September 2023. The Switkowski Review presented an unflattering assessment of PwC, its practices and processes, and identified seven key shortcomings of the firm:
(i)Lack of independence and external 'voices' within the ultimate governing body.
(ii)Excessive power conferred on the CEO.
(iii)Disproportionate focus on revenue growth and market leadership as the strategic imperatives.
(iv)Decentralised business model without sufficient visibility of the enterprise view.
(v)Complexity and fragmentation contributing to ineffective structures and processes.
(vi)Unclear responsibilities and accountabilities creating gaps and risks.
(vii)Overly collegial culture inhibiting constructive challenge.
5.19Dr Switkowski considered that the culture of an organisation is critical to how it functions:
Culture has a significant impact not only on how an organisation is governed, makes decisions and manages risk, but on how effectively it meets broader community expectations. These factors are all critical to earning and maintaining trust with stakeholders, both internal and external.
5.20The Switkowski Review reflected particularly negatively on the culture at PwC Australia, particularly its finding that the mindset was 'growth at all costs' with a spotlight on 'revenue, revenue, revenue'.
5.21Dr Switkowski found that while PwC embodies a 'high-performance, results-focused culture supported by strong collegiality and care within teams', its cultural strength is weakened due to a 'tone from the top' which emphasises revenue and growth.
5.22Dr Switkowski also found that '[f]ear, competition, and high expectations for strong financial performance by partners have been apparent in recent years'. Further, Dr Switkowski considered that this drive increased the pressure on partners to meet financial targets. In leadership meetings, dialogue has focused on which parts of the business are 'make-take positive or negative'.
5.23Dr Switkowski considered that one of PwC's strengths is that its culture is highly collegial. However, he also explained that when this strength is overplayed, it manifests as 'cronyism': the phenomenon in which people give important jobs to friends rather than to people who may be better suited based on skills or experience.
5.24The Switkowski Review noted recent efforts at PwC to encourage a 'speak up' culture, designed to call out behaviour which does not align with the firm's stated values and ethics. However, the 'tone from the top' again impeded such an initiative:
A preparedness to discuss and learn from mistakes and near misses at PwC Australia is not consistently role-modelled from the top. Instead, there is a focus on optimism and communication of 'good news' and stories of success.
5.25The Switkowski Review was clear that it was looking at the practices within the firm that had developed over several years, which to led to a culture and ingrained practice of valuing profit over ethics which allowed the breach of confidential government information to occur and go unreported.
5.26On 27 September 2023 PwC also released its response to the Review, entitled PwC Australia's Commitments to Change which acknowledged Dr Switkowski's findings and how poorly the Switkowski Review reflected on the firm. It also undertook to implement all the recommendations made in the Switkowski Review.
5.27In its March 2024 report, the committee considered:
The […] apparent ethical failures raise questions about PwC's leadership, internal culture, and risk management. It appears the internal management and audit controls either failed or were broken. That said, even good risk managers are only as powerful as the internal culture and leadership of a firm allows them to be. For example, if revenue always comes first, then risk management is relegated. Further, an internal culture can only be as strong as the leadership and governance which must be committed on a thorough and consistent basis to a robust culture of doing the right thing.
Broderick Review
5.28In September 2022, EY Oceania commissioned a review into its workplace culture. The review was undertaken by Ms Elizabeth Broderick & Co (Broderick Review) and published in July 2023.
5.29The impetus for the Broderick Review was different to the circumstances which prompted the Switkowski Review. The Broderick Review was commissioned due to two factors. First, the unprecedented workforce pressures of the COVID-19 pandemic. And second, the passing of Aishwarya Venkatachalam, an Indian-Australian auditor who died by suicide on-site at the EY Oceania Sydney premises in August 2022.
5.30The Broderick Review's mandate was to explore bullying, sexual harassment, racism, psychological safety, and the impact of work demands on the well-being of employees. The key findings of the Broderick Review are organised across four broad themes:
inclusion and safety;
harmful behaviours;
long working hours and overwork; and
leadership and change.
5.31In relation to inclusion and safety, the Broderick Review found that the majority of staff and partners feel safe, included, and have a positive experience of EY workplaces. However, several staff and partners reported negative experiences of the firm and the harmful impacts on individuals, teams and the firm.
5.32In relation to harmful behaviours and discrimination, the Broderick Review found the following:
15 per cent of people experienced bullying in the last five years;
10 per cent of people experienced sexual harassment in the last five years; and
8 per cent of people experienced racism in the last five years.
5.33The Broderick Review found that the majority of staff and partners have low confidence in the reporting mechanisms and resolution strategies in place within EY and reporting levels are significantly lower than incidence rates.
5.34In relation to long working hours, the Broderick Review found a substantial proportion of staff and partners at EY Oceania regularly work above-standard hours and view working such hours as a normative expectation within EY Oceania and the professional services sector more broadly. The Broderick Review found that 31 per cent of people at EY Oceania are routinely working 51or more hours a week, and approximately 11 per cent are routinely working 61 hours or more in a week. Only 31 per cent of respondents were confident that EY Oceania can change a culture of long working hours and overwork.
5.35Ms Broderick noted the negative impacts of such long working hours:
When we looked at EY Oceania staff and partners, almost half reported that their health was being negatively impacted as a result of long working hours, and two in five, or 42 per cent, had considered quitting their role as a result of the long working hours.
5.36Respondents also indicated that leadership across the firm is variable, with perceptions of leadership ranging from exceptional to sub-optimal. The impacts of poor leadership had the potential to be both personally and professionally devastating for individuals, and spur broader negative organisational ramifications.
5.37Finally, the Broderick Review found that experiences of psychological safety were variable, and heavily influenced by individual leaders. This finding is well summarised by the below participant statements:
“Psychological safety very much depends on who you work for”.
“Leadership can be great on one project and toxic on the next”.
5.38Ms Broderick considered that the Switkowski Review and her own review of EY overlapped in the area lack of psychological safety:
[Dr Switkowski] pointed to a number of areas where, if people had felt safe to speak out, some of these issues might not have ended up where they did. We saw a similar issue at EY, particularly where people weren't speaking up about sexual harassment or racism or indeed, most importantly, the long-working-hours culture. So the analysis in that report as well as the analysis in our report—both are useful learnings across the whole sector.
5.39EY has accepted all 27 recommendations of the Broderick Review and is working to implement them.
5.40Ms Broderick suggested that although she had not undertaken a study of each of the Big 4 firms, that the issues which her team identified at EY would also exist in 'pretty much every professional services firm'. Ms Broderick explained:
Part of that is the whole way the system rewards partners and senior leaders but […] I wouldn't just see it in professional services firms; to be honest, I see this across particularly large organisations across this country and beyond, really.
Data on workplace behaviour in the Big 4
5.41Further to the information set out in the Broderick Review, EY acknowledged that in 2022, it undertook 17 formal investigations of workplace behaviour. Of the 17 formal workplace investigations, 13 were substantiated and one remained under investigation at the time of the report, in the following categories:
sexual harassment: 5
bullying: 4
multiple allegations: 4
5.42In 2021–22, Deloitte noted that it investigated and closed out 146 concerns raised, representing 1.2 concerns per 100 employees:
Of these, 78 were substantiated with actions including counselling & training (36), written reprimands (24) and firm exit (18).
Of the 78 substantiated concerns, we note the following key categories;
respect and fair treatment (includes bullying and harassment) 25
sexual harassment 16
misuse of Confidential or Proprietary Information 18
discrimination 6
5.43For KPMG in 2021–22, 88 reports were raised regarding the conduct of its people, with the majority of these linked to KPMG's Values, a policy or Code of Conduct breach (36 per cent) or bullying (27 per cent). KPMG reported that:
…the allegations included nine reports of sexual harassment. Seven of these were substantiated with one individual leaving the firm and the remainder being censured because of their actions. None of the reports involved sexual assault.
5.44KPMG noted that '[o]ffsite social events continue to be the primary source of sexual harassment incidents.
5.45Finally, PwC reported that in 2021–22, it received 6 formal complaints of bullying and 8 formal complaints of sexual harassment.
APS survey results in connection with culture
5.46The APSC State of the Service survey (the survey) results reveal that the APS also has room for improvement in its culture – this is common across all large organisations, private or public.
5.47The survey revealed that in 2023, 10.4 per cent of respondents to the APS Employee Census indicated they had been subjected to harassment or bullying in the workplace in the last 12 months, up from 9.7 per cent in 2022.
5.48Further, while most respondents agreed that their manager acts with integrity, the survey noted:
Around 4 out of every 5 respondents agree their immediate supervisor is open and honest (82 per cent), accountable (81 per cent), and takes responsibility for what happens in their workgroup (79 per cent); and
Two-thirds of respondents agree that their immediate supervisor calls out unacceptable behaviour (67 per cent).
5.49Additionally, the survey found that in 2022–23, agencies reported formal investigations into 62 employees for conduct that was categorised as corrupt. Of these, 56 employees were found to have breached the APS Code of Conduct. While this is a reduction from 138 employees in 2021–22, it indicates there is room for improvement.
5.50Ms Lisa Pusey, Lead Consultant at Elizabeth Broderick & Co also noted that while comparisons between any two workplaces can be challenging due to differences in methodologies, there were some notable statistics around bullying and sexual harassment in the public sector available. Ms Pusey noted:
The New South Wales parliament was around 28 per cent in the last five years [bullying]. On sexual harassment, again, the federal parliament was roughly consistent with the national data, at around 33 per cent, and the New South Wales parliament was at around 20 per cent. I note those organisations and numbers, because in our opinion they are the most closely aligned methodologies. There are many other surveys on these issues out there, but those methodologies were very similar.
Conflicts of interest
5.51When looking at consulting firms doing work for the Australian Government, conflicts of interest exist in numerous forms. It is important that conflicts are identified and managed appropriately. Conflicts of interest may arise when:
staff are seconded between consulting firms and government departments;
an APS employee has been involved in engagement with a consultant and then works for the consultant afterwards;
consulting firms undertake work in the same field for competing clients;
consulting firms make recommendations that generate further work for the their firm; and
consulting firms undertake work for the public sector, which relates to work they undertake for private sector clients.
5.52As set out in the APS Values and APS Code of Conduct (the Code), the public is entitled to have confidence in the integrity of their public officials, and to know that an APS employee's personal interests do not conflict with his or her public duties.
5.53The Code requires employees to take reasonable steps to avoid any conflict of interest, real or apparent, in connection with their employment. The Code defines real and apparent conflicts of interest as follows:
A real conflict of interest occurs where there is a conflict between the public duty and personal interests of an employee that improperly influences the employee in the performance of his or her duties.
An apparent conflict of interest occurs where it appears that an employee's personal interests could improperly influence the performance of his or her duties but this is not in fact the case.
5.54The ASPC notes that the appearance of a conflict can be just as damaging to public confidence in public administration as a conflict which gives rise to a concern based on objective facts.
5.55The approach to managing conflicts of interest varies across consulting firms. Some employees and partners in consulting firms who are professional accountants are required to comply with the APES 110, which sets out specific requirements for the management of conflicts of interest. The APESB explained that:
Before professional accountants in public practice accept a new client relationship, engagement or business relationship, APES 110 requires them to take reasonable steps to identify circumstances that might create a conflict of interest and, therefore, a threat to compliance with one or more of the fundamental principles (paragraphs R310.5 to 310.5 A3).
Professional accountants must also remain alert to changes in the nature of activities or services, interests and relationships that might create a conflict of interest while performing professional activities or engagements (paragraph R310.6 of APES 110).
5.56APES 110 provides additional guidance, including the management of conflicts when sharing information within the firm.
Case studies—management of conflicts of interest
5.57The interpretation of what constitutes a conflict of interest is not consistent across consulting firms or with how the APS considers conflicts of interest. The Big 4 consulting firms, and others, each have their own unique conflicts of interest policies. However, the committee has received evidence that despite the existence of these policies, conflicts of interest are improperly managed, and at times, ignored.
5.58For example, a clear conflict of interest exists in the case which prompted this inquiry: the breach of confidential government information by PwC. In November 2013, MrPeter Collins and Mr Michael Bersten attended the first meeting of the Base Erosion and Profit Shifting Tax Advisory Group (BEPSTAG). In December 2013, Mr Collins, Mr Bersten, and Mr Pete Calleja each signed confidentiality agreements with Treasury in relation to this work. MrCollins and Mr Bersten both forwarded their unsigned confidentiality agreements to Mr Tom Seymour, then leader of PwC Australia's tax practice. Nobody in PwC Australia identified or reported the clear conflict of interest 'that arose from having client-facing partners participating in confidential Government consultations'.
5.59KPMG contended that it has very strong processes, controls, and policies around conflicts of interest:
We have independent from the business an independent risk team that focuses purely on conflict resolution. We have a global system where every piece of work needs to be put in that system and approved by the relevant head partner on the client before it can begin. We have a lot of processes in place to manage conflicts.
5.60However, conflicts of interest concerns have been raised in relation to KPMG as well. One example concerns the work KPMG undertakes in the aged care sector. KPMG is one of four firms contracted by the Aged Care Quality and Safety Commission (ACQSC) to provide accreditation assessors. KPMG also offers consultancy services to aged care providers, including assisting providers with accreditation. Mr Yates, CEO of KPMG, commented he had tasked his firm's risk team with reviewing this matter 'to make sure that we are actually doing the right thing'.
5.61Deloitte also stated that it strives for the highest level of professional and ethical standards, using a set of rigorous protocols, practices, and safeguards to mitigate conflicts of interest and manage confidentiality.
5.62Despite this, in April 2022, Deloitte was engaged to provide an assurance service over the Environmental, Social and Governance (ESG) data of a government entity. Deloitte was simultaneously the contracted auditor for the financial statement audit of that government entity. In August 2022, four months after the commencement of the engagement, Deloitte realised it had not sought the required pre-approval from the ANAO to provide the service. Deloitte undertook its own internal investigation and later disclosed this to the ANAO. Deloitte noted that '[i]t was concluded by the ANAO that the assurance services did not represent an independence threat to the financial statements being audited'.
5.63Concerns have also been raised about conflicts of interest in work undertaken by EY. EY provides audit services to a range of companies, including Origin Energy, Santos, Beach Energy, BHP, BlueScope Steel and Brickworks, which are subject to the safeguard mechanism and that rely on carbon offsets to meet their voluntary climate targets and obligations. At the same time, EY was contracted by the Department of Climate Change, Energy, the Environment and Water (DCCEEW) to provide 'analysis and advice on emission outputs for oil and gas facilities', 'analysis and advice under the safeguard mechanism' and 'professional advice on market modelling services electricity'. According to government records these contracts were worth $510,000.
Inherent risks—Scyne Advisory example
5.64As set out in the committee's March 2024 report, PwC: The Cover-up Worsens the Crime, the sale of PwC's government consulting work to Allegro Funds, now established as Scyne Advisory, is one of the key measures it put in place to minimise the possibility of conflicts of interest compromising PwC's future work.
5.65Mr John Mullen, Chairman of Scyne Advisory, emphasised that Scyne is immune from the inherent conflicts of interest of other firms given that it will only undertake work for the public sector, not the private sector:
At the moment Scyne is in a category of its own in being able to say to government that we are unconflicted with the private sector. We also believe that this specialised approach delivers better advice for our clients. Our people concentrate on supporting governments and their increasingly complex policy challenges. But we're clear that our role is to support the Public Service over the long-term, not replace it. We started from scratch and designed the structure to support these goals.
5.66However, the committee holds some reservations that this change is an elegant solution, particularly given evidence that the committee received in relation to KPMG's involvement with the NSW Government and the work it undertook in relation to the Transport Asset Holding Entity (TAHE).
5.67In 2020, NSW Treasury and NSW Transport commissioned separate KPMG teams to assess aspects of TAHE. The KPMG team working for NSW Transport concluded that TAHE would leave the state budget $10 billion worse off than Treasury had claimed. A separate KPMG team, working for NSW Treasury, backed Treasury's assertion that TAHE would not have any effect on the state's budget.
5.68Professor Brendan Lyon was an equity partner in KPMG's infrastructure practice from 2018 to 2021, and was the partner engaged by NSW Transport in relation to TAHE. In evidence to the committee, he explained:
…the New South Wales transport secretary engaged me to help in a matter regarding the accounting for public rail assets. I had some ethical departures that, if we wanted to enumerate, were about $10.6 billion between my opinion of the budget impact of that and what another part of KPMG and the New South Wales treasury had sort of sold. I wasn't willing to change my results on the basis only of narrative and no-one was able to show me where the model itself was wrong or the logic was wrong.
5.69Mr Yates explained to the committee that, at the time, KPMG viewed the NSW Government as one client. Mr Yates contended that the firm realised too late that NSW Transport and NSW Treasury held different positions.
5.70In 2020, once KPMG understood the two departments' positions, KPMG installed an oversight committee to ensure they worked independently from one another. Mr Yates noted that while the two reports that were ultimately issued by two separate teams of the firm, KPMG 'lost sight of the fact that we were in a conflict situation'.
5.71Professor Lyon argued that he was forced out of the KPMG partnership following his unwillingness to change his analysis:
I was segregated, I was separated and, ultimately, I was excluded from the firm. I was exposed to a whole range of wholly vexatious conduct complaints.
5.72Mr Yates, CEO of KPMG acknowledged that the TAHE matter is 'another really black mark on our firm'.
5.73This example demonstrates that a firm consulting uniquely for the public sector is not immune from conflicts of interests. Indeed, firms like Scyne Advisory that are limited to consulting for one sector, will need to be just as vigilant about managing their conflicts of interest as any other firm.
Other concerns about Big 4 culture
5.74The committee has also received a range of evidence that speaks to poor culture, that is not in line with APS Values or community expectations across the Big 4 consulting firms, in connection with cheating and power mapping.
5.75A significant example of such behaviour is KPMG's cheating scandal. In 2022, it was reported that over 1000 KPMG staff were accused of cheating on an internal test relating to independence rules which included a section on managing conflicts of interest and the separation of roles. This cheating reportedly occurred systematically for at least 5 years up to 2020.
5.76Mr Yates, CEO of KPMG Australia advised the committee that the systemic cheating on the test was reported by a junior member of staff to senior leadership. Following a brief internal investigation by KPMG Australia, the firm then self-reported the issue to the US regulator, the Public Company Accounting Oversight Board (PCAOB), as well as to the Australian Securities and Investments Commission (ASIC) and to Chartered Accountants Australia and New Zealand (CA ANZ).
5.77The PCAOB fined KPMG $615,000 and sanctions for the staff involved varied from verbal warnings and written warnings for the over 1000 staff involved, through to financial penalties and, for two partners, separation from the firm.
Power mapping
5.78In August 2023, the Big 7 consulting firms (the Big 4 as well as McKinsey & Company, Accenture, and Boston Consulting Group) were asked, through written questions on notice, by the committee whether they aware of or had ever engaged in 'power mapping'. Power mapping is a term which refers to the practice of creating a visual tool used to understand who has more or less power in a work environment to help navigate its politics.
5.79Deloitte, EY, KPMG and PwC, McKinsey & Company, and Boston Consulting Group each responded that they did not engage in power mapping.
5.80Accenture alone acknowledged that it was aware of and made use of the practice of power mapping and noted that this practice is interchangeably referred to as 'Relationship Mapping', 'Stakeholder Mapping' and 'Stakeholder Engagement'. Accenture elaborated:
Within Accenture, we use a form of power mapping as a tool to help us understand an organisation's structure, governance forums, and views/experiences of Accenture particularly as it relates to their satisfaction with Accenture's service delivery. The maps can also include alliance partners, third-party advisors and the role of competitors in the broader ecosystem.
Power maps are one element in our assessment of potential client projects and are used on most of our client engagements, including with our public service clients, and as part of our account planning processes. They are commonly deployed through a Customer Relationship Management system such as Salesforce and we use them to determine how we can best assist our clients.
5.81Accenture also provided two examples of the type of power maps it uses, including a sample map that it might apply to a government department or agency.
5.82Following receipt of these answers from the Big 7, the committee became aware of a power map created by KPMG in relation to its work for Transport for NSW (TfNSW). The document is entitled 'TfNSW Latest Org Structure & strength of relationships' and includes a legend which colour codes individuals in the map according to the strength of their relationship with KPMG: Sponsor, Good, Ambivalent, Poor, No relationship, Unknown.
5.83At a public hearing on 27 September 2023, KPMG's CEO Mr Yates contended that the document was a relationship map and not a power map.
5.84Noting the interchangeability of these terms, the committee was of the view that KPMG's response to the question on notice and the existence of the document described during the hearing were contradictory. The committee wrote to KPMG requesting that the firm review their responses and what it viewed as an apparent attempt to mislead the Senate.
5.85KPMG's response doubled-down on its denial that it uses power maps and specified that the TfNSW document was not a power map as it does not:
set out a ranking or measure of the power or influence of any individual (such as labelling them decision-makers or influencers);
draw lines or arrows to show how any person might seek to influence or persuade any other person; or
make any subjective assessment of any individual’s character, performance, or qualities, (for example amiable, analytical, expressive, driving).
5.86At a public hearing on 9 February 2024, KPMG was again provided with an example of a power map it had created. In this instance, the document related to Health Infrastructure NSW (HINSW) and set out six relationship mapping action plans, including specific tasks that certain KPMG staff would need to fulfill to deepen their relationships with individuals within HINSW.
5.87Mr Yates considered that KPMG's initial responses to the power maps presented were too focussed on the use of the term power map:
We got caught up in whether something is a power map, a relationship, a client map—whatever it's called. I'm happy to go with power map. Clearly, if I had my time again, I would do that.
5.88Mr Yates also acknowledged that KPMG does map its relationships and noted that their 'intent is not to unduly influence people', rather it is an organisational tool for KPMG's interactions with clients.