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PwC Australia Makes AI a Key Part of Its Three-Year Plan Because AI Isn’t Invited to the Secret Government Tax Meetings

PwC headquarters building in Melbourne Victoria Australia

Still-scandalized PwC Australia released its three-year plan on Friday and no one should be surprised that they’ve put trust front and center. Funny considering PwC US just got rid of that whole Trust nonsense in people’s job titles and everywhere else where weird nicknames for assurance are required. Whatever. Unlike PwC US, PwC Australia definitely needs to keep repeating the trust part until it sticks.

Here’s the Aussies’ three-year strategy:

  • Reaffirms the firm is delivering on its Commitments to Change;
  • Repositions the firm to support clients in an era of disruption and economic uncertainty;
  • Highlights multi-disciplinary support for clients across core market-leading capabilities such as; audit, tax and deals, risk and transformation, cloud and digital; and
  • Prioritises four new key market areas; artificial intelligence, trust in what matters, climate and business model reinvention.

They of course mention the Commitments to Change report [PDF] they produced in response to the independent review completed last year by respected Australian business leader Dr. Ziggy Switkowski AO (the AO stands for Officer of the Order of Australia, given by the government to individuals for distinguished service of a high degree to Australia or to humanity at large). But only briefly:

PwC Australia has confirmed its new firm strategy, with clients and culture at the heart, while continuing to deliver on its Commitments to Change. 

A quick refresher on the key shortcomings relating to governance, culture, and accountability at PwC Australia identified in the Switkowski report [PDF]:

  • Lack of independence and external ‘voices’ within the ultimate governing body
  • Excessive power conferred on the CEO
  • Disproportionate focus on revenue growth and market leadership as the strategic imperatives
  • Decentralized business model without sufficient visibility of the enterprise view
  • Complexity and fragmentation contributing to ineffective structures and processes
  • Unclear responsibilities and accountabilities creating gaps and risks
  • Overly collegial culture inhibiting constructive challenge

And some more observations as highlighted by Australian Financial Review in their write-up of a different independent review by law firms

  • Leaders ‘tolerate aberrant behavior’ from those who bring in big revenue.
  • Operations drive competitive behavior and a financial focus.
  • Trust in partners leads to ‘overconfidence in decision making’.
  • Networks and relationships ‘weaken cognitive diversity’ in top roles.
  • Fears about reputation and advancement inhibit people from speaking out.
  • Focus on good news and avoid discussion of failures.

Do we need more? You get it. They’re not going to let all that messiness get in the way of helping clients through a changing landscape though:

PwC Australia has also outlined its ongoing focus on being a well-managed firm, for example, by having a market relevant operating model, leading governance, risk and ethics, and responsible business practices. Building a leading culture is also emphasised as a key driver for the firm to deliver its purpose.

PwC Australia CEO Kevin Burrowes said business reinvention is needed to truly support clients facing rapid disruption.

“We are excited for the opportunity to create better outcomes for our clients and people as we launch this strategy,” he said.

Reminder: the tax scandal they’re still digging their way out from under involved tipping big corporations to confidential specifics of the government’s Multinational Anti-Avoidance Law (MAAL).

“[T]ax partners at the firm proposing tax structures relating to the then-new MAAL for two clients were so aggressive that the Tax Office forced the companies involved to unwind the arrangements and replace them ‘with a structure acceptable to the ATO’,” wrote AFR’s Edmund Tadros in “How PwC failed to identify or deal with tax leaks scandal” dated September 2023. And in “PwC Australia ties Google to tax leak scandal, sources say” Lewis Jackson wrote for AFR, “Tax officials told parliament in May they foiled several attempts by unnamed multinational firms to subvert the multinational anti-avoidance law in early 2016, months after confidential information had leaked.” But the firm is gonna put all that behind it and blaze ever onward. With 2x the trust!

“We are on the journey to transform through technology and AI that delivers leading insights, quality and outcomes for our clients. This will also ensure we provide our people the best possible working environment, skills uplift and career development in a firm they are proud to be part of.

“This reinvention imperative impacts every organisation in our country, and we are no different. We must act swiftly to stay ahead of the curve.”

The strategy will see the firm prioritise four key areas; artificial intelligence, trust in what matters, climate and business model reinvention. It will also invest in core capabilities such as audit, tax and deals, risk and transformation as well as cloud and digital. PwC will support clients with a multi-disciplinary approach, supported by the whole firm working together.

“With a simpler, more resilient business model and robust governance, we will be well positioned to tackle the challenges of today and tomorrow. By leading with a strong cultural foundation, together we will live our purpose, which is to build trust in society and solve important problems,” said Mr Burrowes.

K.