Carmine Di Sibio, chief executive officer of EY, wanted to spin off EY’s consulting arm and list it on the stock exchange but encountered strong opposition from leaders of the firm’s US business. Photo / Hollie Adams, Bloomberg via Getty Images
Carmine Di Sibio, chief executive officer of EY, wanted to spin off EY’s consulting arm and list it on the stock exchange but encountered strong opposition from leaders of the firm’s US business. Photo / Hollie Adams, Bloomberg via Getty Images
EY boss Carmine Di Sibio’s right-hand man has emerged as a frontrunner to take over as global head of the Big Four firm in a leadership race triggered by the collapse of its attempted break-up this year.
British executive Andy Baldwin, one of the architects of the aborted plan tospin off EY’s consulting operations, is running to be the first non-US executive to become global chair and CEO, according to multiple people inside or close to the firm.
Baldwin had argued along with Di Sibio that EY needed to radically rethink its structure, but some of the people said his involvement in the failed talks over exactly how to divide the business has raised doubts about whether he could unite EY’s warring factions.
Another leading contender is Jad Shimaly, the head of EY’s business in Canada, insiders say, and at least four other executives have put their names forward or have considered doing so.
“Andy is the favourite by a large margin, but things can get weird in a hurry,” said one person familiar with the candidates. “Like a UK Conservative party leadership contest.”
Nominations to lead the 390,000-person business will close on August 13, according to an internal email this week that was described to the Financial Times. A nominations committee will take “soundings” from hundreds of the most senior partners, and thousands more will be surveyed on the qualities they want in a leader and on EY’s strategy, the email said.
The final candidate will be picked not by popular vote, however, but by the global executive committee chaired by Di Sibio and then ratified by a group of prominent partners. The firm has previously signalled it expects the decision to be settled around November, with the winner taking over in June next year.
In 25 years on the consulting side of the firm, Baldwin has been credited with pushing the use of new technology internally. He also drove greater integration of EY’s separate national firms during a three-year spell as head of the group’s European operations, before he became one of Di Sibio’s two deputies in 2019.
The break-up plan, dubbed Project Everest, was designed to liberate EY from conflict-of-interest rules that restrict the consulting arm from working for audit clients. “The strategic rationale of what we’re doing, our partners understand,” Baldwin told the FT last year. Their question “is not ‘should we do something?’ I think that train’s left the station.”
However, the plan pitted global bosses against the leadership of EY’s US arm and enthusiastic consultants against their more sceptical colleagues in the audit business.
A break-up plan was designed to liberate EY from conflict-of-interest rules that restrict the consulting arm from working for audit clients. Photo / Jack Taylor, Getty Images)
Some partners and former partners still close to the firm say that a period of “healing” could be better than another restructuring attempt, even a slimmed-down version of the split that would involve selling off only parts of the consultancy.
Several also raised the question of whether Baldwin’s age should count against him. Having just turned 57, he would be able to serve just three years before hitting mandatory retirement age unless he was given an extension to serve the usual four-year term.
“The global executive [committee] has put the firm through the wringer and we need significant, maybe even wholesale, change,” said one person. “Andy needs to wear this debacle. He needs to be held accountable for pushing so hard and listening so little.”
Another added: “We need to reinstitute the ban on senior management retirement extensions that clog up the pipeline and hinder the development of future leaders.”
Unlike traditional corporations, EY is structured as a network of locally-owned partnerships, giving country leaders considerable influence — particularly in the US, which accounts for 40 per cent of global revenues. Julie Boland, US managing partner, dealt the final blow to Project Everest in April, having decided it would weaken EY’s audit business. She is not thought to want the top global role for herself, but is likely to be a key player in whether Baldwin’s campaign succeeds.
Boland did not respond to an email seeking comment. EY declined to comment or to make any of the mooted candidates available for interview.
At a meeting of more than 100 senior partners in Lisbon in June, Shimaly was mooted on the sidelines as a “dark horse” candidate who could potentially unite EY’s fighting factions, said one person in attendance. The naturalised Canadian, who was brought up in Lebanon before completing an MBA in the US, is six years Baldwin’s junior, giving him time to serve two full terms.
“He also has that Canadian ‘do no harm’ approach, and it could be helpful to have a North American perspective without necessarily being a US partner,” said another person familiar with some partners’ thinking.
Marie-Laure Delarue, a French partner who oversees EY’s audit practice globally, was also mentioned as a contender following the Lisbon gathering. She would be the first woman to lead EY at the global level and, like Baldwin and Di Sibio, has a background serving clients in the financial services industry.
Other mooted candidates included two Americans: Janet Truncale, who runs EY’s financial services business in the Americas, and Ryan Burke, who heads the firm’s practice serving private businesses. Truncale is seen as an ally of the global executive committee in its long-simmering tensions with other members of the US leadership, making it unclear if she could win Boland’s support, said several people familiar with the matter.
‘United in their desire to make a great deal of money’
Another executive said by several insiders to be considering whether to stand is US-born Julie Teigland, who oversees EY’s businesses in Europe, the Middle East, India and Africa. She was previously in charge of EY Germany when the firm was auditing Wirecard, the payments processor that was later revealed to have fabricated half of its revenue and €1.9 billion (NZ$3.12b) in corporate cash. Baldwin was in charge of the European region at the same time. EY has since been banned from taking on new audits in Germany for two years.
“The challenge EY has is that many of the candidates are going to be problematic, either because they are too closely associated with championing Everest, or with undermining it... or because they are carrying with them baggage associated with previous scandals,” said Laura Empson, a Bayes Business School professor and author of Leading Professionals: Power, Politics, and Prima Donnas.
That does not mean that the firm will be unable to coalesce around a new leader, Empson said.
“They are all united in their desire to make a great deal of money and they know that the way to do that is not to fight but to get the firm on the safest possible footing as quickly as possible.”
