By Lynne Doughtie, U.S. Chairman and CEO of KPMG
In today’s complex and fast-moving global business environment, successful organizations regularly reassess their mission and responsibilities to the markets they serve. They raise a mirror to themselves closely evaluating what they believe to be their proven tools and determine if those tools remain fit for purpose. And leaders who steer these organizations whether publicly traded companies or private partnerships similarly must be willing to take a fresh look at the systems and structures they have in place to ensure their organizations are best positioned to thrive.
At KPMG, we embrace that responsibility. That’s largely why we’re now embarking on the important process of adding outside directors to our board. We regularly evaluate ways to improve how we manage our business to meet the expectations of our stakeholders, including the companies we serve and their boards and investors, the capital markets, our regulators, and our people. In 2017, certain events, and the actions of a few former colleagues, caused us to take a deeper dive into examining our culture and values, and to assess with fresh eyes how we could improve and best position our more than 100 year-old firm for future success. What has emerged from that ongoing exercise is not surprising. We have been reminded of the cardinal rule in our business, namely that trust is paramount and, as such, must inform all that we do.
For KPMG and firms like ours, trust, values and culture are especially important given our critical role in ensuring the integrity of our capital markets. Company leaders, boards, audit committees, investors and regulators of capital markets count on us to exhibit unwavering integrity in our daily work and to deliver unimpeachable quality in all that we do. They very appropriately rely on us to keep our house in order, and we, in turn, toil mightily to preserve the faith and confidence that they have invested in us.
With this public responsibility in mind, we continue to take a hard look at our firm and its governance and its deep connection to fostering and maintaining trust and effective enterprise risk management and believe that not everything that has worked for the past 100 years will continue to work for the next 100. We will have to do some things differently and, among other actions, believe that our governance will benefit immensely from the addition of outside directors to our board.
We are a vibrant private partnership, deeply committed to our clients, to the public, to our communities, and to each other and, because of the work that we do each day for the most important organizations in the world, we know that that commitment is made stronger when informed not only by deep experience, but also by diverse perspectives. We know that we are best at what we do when we push ourselves to think innovatively and act boldly. We craft the smartest ideas and deliver the most effective solutions when we step outside our comfort zone and beyond what is familiar. And we provide the most fertile ground for our people to show up each day and be stewards in the workplace when we aim to eliminate groupthink and reward individual responsibility and accountability. On all these fronts, external directors will contribute immediate and substantial value to an already robust board of directors, and add an extra measure of independence and objectivity to deliberations. They will further diversify the boardroom dialogue with a broader range of constructive viewpoints and provide experience complementary to the expertise our partners have built over their careers. And, importantly, they will reinforce our stakeholders’ sense of trust in our organization.
We also know that external directors will provide a valuable sounding board to management as we continue our journey building and sustaining the world-class business and culture we all expect. While our firm faced challenges last year, I believe strongly that we have an exceptional culture and shared values at KPMG and we are using the lessons of the recent past to become even stronger.
As a leader in audit, tax and advisory services, KPMG performs an essential role in the capital markets and helps clients meet their most significant challenges. We are proud of our work but not too proud to know that good ideas can come from many places, and there are times when we can learn from the companies we serve that have experienced the benefits of independent directors.
The changes we are undertaking serve KPMG’s highest priorities to build a culture centered on what we value most, promote innovation to serve 21st century enterprises, and help demonstrate stewardship of the trust that has been placed in us to help safeguard our capital markets. To us, this is the right move at the right time.