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Roland Berger Tells Deloitte to Drop Dead

Last week we mentioned that Deloitte and Munich-based Roland Berger were talking about getting cozy with both firms sounding pret-tay excited about the future. Turns out, no one had asked the Roland Berger partners how they felt about the whole situation.

Plans to merge Roland Berger Strategy Consultants with Deloitte Touche Tohmatsu have fallen through after the Munich-based firm rejected the advances.

The two had been in advanced talks but directors at Berger overwhelmingly voted to remain independent.

Talks between the two firms had progressed so far it is believed they had already decided upon a new chief executive and were examining possible regulatory hurdles.

Over at the Financial Times, Adam Jones reminds us that this is a big wrench in Deloitte’s McKinsey-slaying plans, “[Roland Berger’s] decision to continue to go it alone is a blow to Deloitte’s ambition of eclipsing McKinsey in the market for strategic managerial advice.”

It’s a strange turn of events to be sure after last week’s PR lovefest but the FT reports that the Roland Berger was willing to put up his own cash to keep the green ink out of his firm:

Roland Berger said the vote to remain independent had been carried with a majority of “close to 100 per cent” on Saturday.

It added that partners in the firm – including Roland Berger, its founder – had agreed to put in more money to support the renewed go-it-alone plan.

People close to the deal talks suggested Mr Berger had agreed to invest about €50m ($68.5m) to help fund its expansion as a standalone business.

That’s not so much of a “No.” as it is a “Hell no.”

Is Deloitte Trying to Ruin Spring Break?

We kid, we kid. Deloitte would never want to ruin spring break but they are giving a few students an alternative to drinking themselves blind for a week and possibly getting a bad case of crabs.

The firm is teaming up with the United Way and Teach for America for the third consecutive year to offer “Maximum Impact: Deloitte Alternative Spring Break”.


We’ve got no idea if all the slots are filled up but since one of them starts this Saturday you best get on this if your Cancun plans have fallen through:

• March 6 – 12 — Deloitte and United Way will co-host 50 students from approximately 30 colleges and universities along with 20 Deloitte professionals during a week of hands-on and skills-based volunteerism in Atlanta, Georgia. Students will work to enhance childcare centers, refurbish playgrounds for low-income youth, guide students in college exploration and promote literacy in children.

• March 14 – 18 — Deloitte and Teach For America will co-host 25 students from six colleges and universities along with 20 professionals from Deloitte and Teach For America for a week of education-centered volunteerism in Baton Rouge, Louisiana. Volunteers will spend time working with schools and local students who face the challenges of educational inequity through projects that include improving campuses, developing classroom lessons and helping with class preparation work.

You better get on this ASAP if you’re interested since only 75 students and 40 professionals get to participate. The problem for current Deloittians is most of you are eyeballs deep in busy season anyway so this isn’t an option. So does this mean that non-busy season types like Jim Quigely, Barry Salberg, and Punit Renjen will be in attendance? And if so will they be sporting new board shorts for the pool time they are able to squeeze in?

Deloitte Offers Students Chance to Give Back, Explore Careers on Spring Break [Press Release]

Let’s Go Over this Independence Thing One More Time

To be fair, Thomas Flanagan — having been a partner at Deloitte for 30 years — probably didn’t remember the day that his auditing professor covered independence. If you figure that Tom was in college in the late 1960s, it’s surprising that he remembers anything.

Also, as the vice chairman of the firm, his job was to remind people of their duty to remain independent of the firm’s audit clients. He didn’t actually have to be independent himself. What good is insider information if you’re not going to use it, amiright?

Deloitte had sued Flanagan in Delaware Chancery Court in October 2008 for breach of fiduciary duty, fraud, and breach of contract, saying the 30-year partner who had risen to vice chairman of the firm had secretly hidden trades in shares of Deloitte’s audit clients and lied about it to the firm.

“Because an auditor sells, at base, its independence and integrity, the firm relies heavily on the purported honesty and independence of its professionals,” Vice Chancellor John Noble, of the Delaware Court of Chancery, wrote in his opinion.
Deloitte said in its complaint that starting as early as 2005, Flanagan had made more than 300 trades in shares of Deloitte’s audit clients, including several clients for which he was Deloitte’s advisory partner.

Meanwhile, Flanagan specifically told the firm he was not trading in client stocks, which are restricted under the firm’s independence policies, according to the complaint.

Tom must have been a choir boy prior to getting the Vice Chair gig. How else could he have gotten to be such a bigwig if he wasn’t a poster child for integrity? Was he that good of a liar?

Never mind that for a sec. What’s really curious is why the hell a Vice Chairman needed the extra scratch. A comic book collection that would rival Nic Cage’s? Financing a business opportunity? A spendy wife/mistress/pool boy? If you’ve got any thoughts, discuss below and if this story doesn’t clear things up on independence, start crack the auditing textbooks.

Deloitte wins insider trading suit vs. ex-executive [Reuters]