In an announcement that reportedly stunned Deloitte Australia partners and staff, CEO Richard Deutsch resigned today after spending two and a half years on the job, the Australian Financial Review reported.
“After a difficult and unprecedented year and following much personal reflection, today I announced my resignation as CEO,” Mr Deutsch told partners and staff in an all-firm email sent on Thursday afternoon.
“It has been a tremendous honour and privilege to lead this great firm. I am extremely proud of what we have achieved over the past two-and-a-half years. We have navigated the greatest health and economic crisis of our generation and secured the future of the business while continuing to serve our clients with distinction. But this period has come at some personal cost.”
He said the firm was now “extremely well-placed for the future” and that he believed that now “is time to hand over to a new CEO who will drive the firm into the next phase of Deloitte’s growth”.
He then thanked partners and staff for making Deloitte “the best professional services firm in Australia.”
Deutsch didn’t elaborate on the personal reasons that led to him stepping down with 18 months remaining in his four-year term.
During his tenure as CEO, Deloitte Australia increased its revenue to $2.5 billion in FY 2020, which makes Big D the second-largest Big 4 firm in Australia in terms of revenue behind PwC ($2.6 billion).
But AFR reported that “pressure from global and regional leadership to continue aggressively growing so it could overtake PwC as the largest consulting firm in the country is believed to have contributed to his decision.”
In addition, AFR noted:
Deloitte has been dogged by a continued partner exodus, emerging difficulties retaining and recruiting staff and a number of protracted and high-profile legal cases.
One of those legal cases involves a current audit partner, Colin Brown, who is suing Deloitte Australia for age discrimination. Brown is accusing the firm of unfairly forcing partners to retire once they turn 62 years old. Deloitte has admitted it has an “expectation” partners retire at 62 and a practice of discussing retirement in the months leading up to that, but the firm denies it forces them to leave.
AFR reported that the firm’s board will begin the process of searching for a new CEO which is expected to be from the Australian partnership with Deutsch remaining in the role until the CEO selection process is completed.
Deutsch is the second Big 4 CEO in Australia to quit since the start of 2021. Tony Johnson, who has led EY in Australia and New Zealand since 2014, said on Jan. 27 that he will be stepping down as CEO and regional managing partner of EY in Oceania on June 30.
In a statement, Johnson said:
“While there is no fixed term limit, upon coming to the role I committed to give it my all for five years and then it would be best for EY, my family and me to pass the baton. Time has flown and I missed the five-year mark but am certain this is the right time for a change. The business is in a great position, with tremendous momentum and a strong and positive culture. I am very confident of the firm’s ongoing success given the quality of our people and clients and the depth of leadership within EY to take the business forward.”
During Johnson’s tenure as EY Australia CEO, the firm’s revenue has increased from $1.1 billion to more than $2.2 billion.
‘Personal cost’: Deloitte Australia CEO in shock early resignation [Australian Financial Review]