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Original article:
https://www.accountingtoday.com/news/pwc-reorganizes-u-s-firm-structure-sets-new-international-strategy
and More information: www.TheNewEquation.com PwC reorganizes U.S. firm structure, sets new international strategy PricewaterhouseCoopers is restructuring its U.S. firm into two business segments, combining its assurance and tax reporting practices into a new Trust Solutions segment, and setting up a Consulting Solutions segment that will encompass services such as business transformation, cybersecurity, tax consulting, business deals, cloud, digital, privacy and risk. Globally, the PwC International Network is embarking on a strategy called “The New Equation” that will create added opportunities to serve clients, with an emphasis on building trust, delivering sustained outcomes, and furthering a commitment to quality. The realignment of the U.S. firm and repositioning of the global network come out of some of the experiences PwC had from the pandemic, which profoundly affected the world at large, including the firm’s employees and clients. PwC building on Park Avenue in New York. “As we were coming out of COVID and this pandemic, we came out really strong, and we decided to take a fundamental look at PwC today and for the next 10 years,” said PwC lead board director Mike Quinlan. “We spent a good amount of time looking at the market, looking at all of our stakeholders, clients, non-clients, regulators, etc. We studied the big issues that are impacting not only the United States, but the globe — things like climate disruption from technology, polarization, food scarcity, and then what we call the megatrends — everything from urbanization to aging to wealth inequality. We’ve laid down that whole base, and what became clear to us and led us to to the New Equation was that we have a once in a decade opportunity, we believe, to reimagine our business, to be in the service of building trust and then delivering sustainable outcomes for our clients, and then at the same time continuing to put quality at the core of everything we do.” PwC plans to emphasize the concept of trust, expanding upon the sense of the trusted advisor that has become so familiar in the accounting profession. “We really concluded that companies and businesses are the most trusted institutions among all the big stakeholders, along with scientists, academics and the like,” said Quinlan. “Companies really need to build trust with their investors, their employees, their customers and the public. So we have organized into what is now the largest trust business in the world. And then, equally, sustainable outcomes as companies come out of the pandemic, they really face more pressure than ever, accelerated by that pandemic to achieve sustainable outcomes for their businesses, to transform their businesses, to succeed in a sustained fashion. So we’ve equally organized the first business around driving sustainable outcomes, and so we're very excited to lead our industry and our profession in organizing that way.” The new strategy aims to respond to the dramatic changes taking place in society, including technological disruption, the risks of climate change, fractured geopolitics, social tension, and the continuing effects of COVID-19. PwC hopes to build trust at a time when it seems to be fractured and fragile in today’s world. PwC plans to leverage the new strategy as a way to define its vision for serving clients in a changed world in hopes of transforming the professional services industry at large. “The profound changes in the world mean that our clients can only succeed by creating a virtuous circle between earning trust and delivering sustained outcomes,” said Bob Moritz, chair of the PwC International Network, in a statement Tuesday. “By bringing our unique combination of capabilities together we can help them do that, unlocking value for their shareholders, stakeholders and wider society. Over the coming months, we will set out how we plan to do that in every territory and market we operate in, focusing on quality and further deepening our capabilities to meet the needs of clients and stakeholders, wherever they are in the world.” Meanwhile, PwC US will reorganize into a newly simplified structure to better serve clients revolving around Trust Solutions and Consulting Solutions. “Our new strategy is one that is relentlessly focused on our clients, helping them build trust and deliver outcomes for their businesses,” said Tim Ryan, U.S. chair and senior partner at PwC, in a statement. “At PwC, we have a passionate community of solvers who know that when our better selves and the greatest aspects of technology are brought together, there is no opportunity too great for us to achieve.” Both the Trust Solutions and Consulting Solutions business segments will continue to invest in products and technology, based in part on PwC’s own digital transformation, which started in 2016. “We have put tax reporting together with our traditional audit business into what we're calling Trust Solutions,” Quinlan explained. “Then we’ve taken our tax consulting business together with our traditional advisory business, and that’s what we’re calling Consulting Solutions, where we intend to drive sustainable outcomes for our clients. To build on the Consulting Solutions side, as we looked at that market, we said technology is incredibly important to the future, and so we’re going to make significant investments in our capabilities in that space. But technology is just a piece of the puzzle for clients. We believe that companies that are going to succeed are really going to have human-enabled technology solutions, and that’s ultimately going to drive their success. As you would imagine, these are huge investments for companies to transform themselves for success at being tax efficient, and how they make those investments is critical.” Besides the operational changes, the U.S. firm has made a three-year, $300 million commitment called “Tomorrow Takes Trust,” to embed trust-based principles into today's and tomorrow's businesses. Underlying the commitment will be the creation of the PwC Trust Leadership Institute, which aims to equip more than 10,000 business leaders with the skills to help build trust around the challenges and realities of the future. It’s designed for the C-suite, executives and board members. The concept of trust used to have a negative connotation in the business world, with antitrust laws and the goal of busting up trusts in the early part of the 20th century, but PwC hopes to use it in a positive way. “There is an opportunity for companies to build trust with employees, trust with regulators, trust with customers and the like, but it comes with challenges and obligations,” said Quinlan. “Many companies and CEOs really need to think more deeply about how they succeed in building trust. In its simplest terms, historically, it's been about corporations and trust around financial reporting and tax reporting. But today trust is so much more critical around topics like data security, ESG, tax morality, ethical AI, worker safety, etc. So, in addition to putting our audit business and our tax-reporting business into trust, we're really organizing around the concept of Tomorrow Takes Trust. And there are three pillars beneath that. First we’ve got overall a three-year, $300 million commitment to Tomorrow Takes Trust. One of the pillars is the CEO Action on Diversity and Inclusion that we conceptualized and are part of 2,000 signatories of companies that are committed to this construct at this point. Underneath that, we’ve also got the CEO Action on Racial Equity that is also a part of that commitment.” The second pillar is Access Your Potential, a $125 million commitment to support 25,000 Black and Latino college students to prepare them for the workforce when they get their college experience. PwC won’t be providing scholarships, but it does plan to offer skills training and jobs to students. “The colleges and universities do a great job, but there’s more that we can do to help make sure that those 25,000 students are workforce ready, and we intend to hire as many of them as we possibly can,” said Quinlan. “The third pillar is the Trust Institute. There’s both an opportunity and an obligation for companies to build trust. It takes a different kind of skill set. We’re going to work over the next three years with 10,000 individuals that are either in governance or senior positions in companies, or are tomorrow’s leaders in businesses and governance, to educate them, to engage in a dialogue with them around what it means to build trust. Of those 10,000 people, we want at least 5,000 of them to come from diverse backgrounds, either gender diversity or ethnic diversity.” For the PwC Trust Leadership Institute, PwC will offer a learning curriculum tied to the following subjects:
PwC is also launching Tech Effect, a digital resource for leaders that will provide insights about how to better use technology to drive business outcomes. “The firm will continue to rapidly expand our use of cloud, robotics, AI, VR and other emerging technologies to further digitize our ways of working,” said Lisa Sawicki, a board member on the PwC U.S. Board of Partners and Principals, in a statement. “While these moves and commitments are about our clients and serving them differently, on a deeper level it is about affirming the kind of firm that we will be for the long-term—grounded in delivering value on our purpose to build trust in society and solve important problems.” PwC will continue to invest in its own technology as well around the world. “The strategy itself is a global strategy, and we’ll be making significant investments in our capabilities around everything IT related, given that most, if not all, major transformations that companies will go through will be technology led,” said Quinlan. “But that’s just a piece of it because what we think is most important is the combination of human-led technology transformations in order to get the most out of those investments on a tax-efficient basis.” As countries move to coordinate more closely on tax policy and possibly impose a minimum tax on corporations, PwC will be advising clients on how to adjust to the changes. “It's a large topic both in the United States and globally, and we will continue to work with our clients,” said Quinlan. “Increasingly what will come into frame in that dialogue is the overall concept of tax morality, and what does a fair income tax look like? What does a fair tax look like on a global basis?” The new structure at the U.S. firm will enable even closer collaboration between the tax and audit sides. “Tax reporting will be together with our audit practice, and they have coordinated closely for years,” said Quinlan. “We believe this structure will enable even more close working relationships, both to drive quality as job number one and our efficiency in terms of the work we do. And then similarly, on the consulting side, any time a business is undertaking any kind of operational improvement or transformational event, the transformation could include inorganic growth with deals and the like, and the tax consulting aspect of that is huge.” The new structure in the U.S. will fit in with PwC’s overall global strategy. “This strategy, the New Equation, is really about being intensely focused on what the market wants and how they think about our products and services,” said Quinlan. “We think organizing this way will help us to drive quality and value for our clients even more than we have in the past, and we believe that this is going to accelerate our growth, including the growth of our tax business, which is absolutely critical. We’ve got the largest tax business in the world if you add up our network of firms, and this is intended to enhance the success of that business and accelerate that growth.” More information on PwC’s plans can be found at www.TheNewEquation.com. Michael Cohn Editor-In-Chief, AccountingToday.Com Mailto
By Michael Cohn
| June 15, 2021, 5:00 a.m. EDT The text being discussed is available at | https://www.accountingtoday.com/news/pwc-reorganizes-u-s-firm-structure-sets-new-international-strategy and www.TheNewEquation.com |