The resignation of KPMG’s UK chair, Bill Michael on Friday after telling staff to “stop moaning” during a virtual meeting about the impact of the coronavirus pandemic certainly caught the media attention last week.
Michael, who has headed the company since 2017, was speaking at a virtual town hall meeting on Monday with members of the firm’s financial services consulting team when he made the comments. He told to staff in the online meeting, attended by about a third of the 1,500-strong team, to stop “playing the victim card” and described the concept of unconscious bias as being “complete and utter crap for years”,
Two days before his resignation Michael had stepped aside after the KPMG launched an independent investigation, run by the City law firm Linklaters, as the scandal erupted when his comments at the virtual meeting were made public.
Lawyers, however, said his departure may not be the end of the matter for the Big Four accountant.
Sarah Wallace, Regulatory partner of Constantine Law, warned the internal investigation could throw up further issues:
“Internal investigations are not ‘fireside chats’. For some it can signal the beginning of the end. What has changed over the last decade is that internal investigations were once for financial crime or regulatory misconduct. Now they are launched for employee and senior executive conduct and cultural concerns – particularly in companies that are household names or operate in a regulated environment.
Firms are answerable and accountable to regulators, the public and their customers. When a furore is brewing, a firm’s immediate response to the crisis will be scrutinised, as well as the protagonist’s actions. Regulatory, legal and reputational risk is everything.
Internal investigations are billed as fact finding exercises but there can be ramifications. They can lead to disciplinaries, pay adjustments, notification to regulators, third party litigation or cultural reviews. A resignation may not be end of it”.