PwC succession twist followed debate on management style

PwC’s US business leader Tim Ryan has been noted for his intensity, working at all times of the day and night and demanding high standards. Some colleagues admire that style, but others might feel bruised. Photo / Brent Lewin, Bloomberg via Getty Images

Tim Ryan’s decision to drop out of a race to lead PwC followed intense debate within the Big Four firm over whether the US senior partner’s “hard-charging” management style was suited to the role of global chair.

Ryan shocked colleagues on Friday by withdrawing his candidacy and telling them he would retire in June, breaking the convention of PwC’s US leaders being elevated to the top job globally.

The move came before shortlisted candidates had been scheduled to make final presentations to the firm’s global board, which is due to make its choice before the end of the year.

Ryan had been widely expected to emerge victorious, but there was strong disagreement between some partners over his leadership approach. Ryan himself says he was wavering over whether to push for the job.

“He’s a hard-charging, tough businessman and that comes with a lot of good things and sometimes some bad things,” said one senior partner. “He is very direct and the question is does that directness translate to the role?”

Ryan, who has led PwC’s US business since 2016, has been noted for his intensity, working at all times of the day and night and demanding high standards of colleagues — a style that has inspired fierce loyalty in many lieutenants but occasionally left some feeling bruised.

His perceived willingness to take unilateral action in the US business that might be more typically co-ordinated at a global level also generated concern in some parts of the group’s network.

A US reorganisation in 2021, which split consulting operations from the audit practice, was not adopted by other PwC businesses.

“I think Tim’s style...is tough for many other territories to handle,” said a former US partner.

Ryan was “single-minded”, one former employee said, while another person who worked with him said his approach had sometimes upset overseas colleagues.

Senior figures in PwC’s global network insisted that the elevation of a US executive to lead it should no longer be seen as automatic.

“There was a load of noise about it being inevitable and in a multi-modal world, that definitely caused grief about the place,” said one senior partner. “There was a feeling that there can’t be a procession, there has to be a process. And a process naturally puts doubt in people’s mind about what’s inevitable.”

Like the other Big Four firms, PwC operates as a network of independent partnerships, meaning the role of global chair can be a delicate balancing act of co-ordinating nationally owned businesses whose interests sometimes diverge.

“It is a chair or ambassadorial role,” said Kevin Ellis, who heads PwC UK. “It’s a different skill and a different job. Tim has been an extremely good CEO. I wasn’t as shocked as everyone else that he decided this wasn’t the right job for him.”

Gary Price, a former PwC partner who was chief administrative officer of the US firm under Ryan, agreed.

Some senior figures in PwC’s global network insisted the elevation of a US executive to lead it should no longer be seen as automatic. Photo / Supplied

“Tim is the ultimate CEO-operator. The global roles are about influence, not direct control. Tim’s DNA is driving performance, culture, people. It would be anathema to his DNA. It would have been a very interesting science experiment.”

Since Ryan allowed his name to go forward when nominations were opened in the summer, opponents have pushed forward alternative figures from the US and elsewhere in the PwC network.

Mohamed Kande, co-head of the US consulting business, and Carol Stubbings, the UK-based head of the global tax practice, were among those in contention, said people familiar with the situation.

Stubbings was one of the executives flown into Australia by global management earlier this year to help contain the international fallout from a tax scandal that has hit PwC’s reputation in the country. The group’s Asia-Pacific business, including Australia, fell under Ryan’s strategic oversight, as part of his role on the global executive.

Ryan says he had wrestled with his own ambivalence during the succession process.

In an interview after he announced he was leaving, the 57-year-old told the Financial Times that he had weighed alternatives including becoming a corporate CEO, entering public service or even coaching ice hockey.

“I shared with the people closest to me that I was struggling because I love the firm and I love the network. I’m incredibly loyal and their loyalty was pulling at me,” he said. “And then, about a month ago, I made my decision in my heart, what I was going to do.”

Ryan only told chair Bob Moritz and other leaders about his decision on October 8, and went public five days later. He said he had delayed disclosing his decision because he wanted to get through the US leadership’s annual autumn partner meetings “without creating drama”.

Moritz said in a statement that Ryan had “a positive influence across the capital markets and provided many valuable outcomes for the benefit of PwC, its stakeholders and the profession”.

He added: “We regret that he has decided that he will not continue as a possible candidate for our global chair.”

Ryan said he had not paid attention to responses to his candidacy from around the network, or attempted to judge his support on the 19-person board. Its composition is weighted roughly according to member firms’ contributions to revenue, and also includes one independent board member.

He said he was humbled by the hundreds of positive comments from around PwC that he had received since announcing his retirement.

“I care deeply about my partners and I care deeply about all our people. Those who know me know that I put their family, their health and their physical, mental and spiritual wellbeing first,” he said.

“After 35 years at this amazing place, it’s been a struggle for me,” he added. “I just want to try something different.”

Written by: Michael O’Dwyer in London and Stephen Foley in New York

© Financial Times