The High Cost of Ethics Lapses in Consulting
Oh my, here we go again. CNN just reported that PwC is selling one of its government advisory businesses in Australia for just ‘cents’ after a scandal wrecked its reputation.
In my one of my previous blogs, Consulting Ethics Challenges, June 14, 2023, I wrote about the major problems PwC’s government advisory services was having in Australia. And, it was a mess; now it is worse.
The cost ethics lapses is now clear. In addition to a shattered reputation, PwC announced its ‘exit from all governmental advisory work and are selling that practice in Australia to a private equity firm, Allegro Funds, for 1 Australian dollar ($0.7). Note: CNN said that this business accounts for approximately 20% of the PwC’s revenue in Australia. I don’t know what their total revenues are in Australia, but I strongly suggest the present value of the future revenue and net profit streams is very significant, especially to the partners. PwC’s CEO in Australia stepped down in May, as did two other partners. Nine other partners went on leave as the investigation continued into ‘who may have shared or misused confidential information.’ Further, as I reported previously, the Australian Senate launched an inquiry (in which a colleague, Peter Westlund CMC®, representing the Institute of Management Consulting, Australia testified) which has now been referred to police for a criminal investigation.
Yikes! And, yet, the answer is easy.
For the past 35 years, as a Certified Management Consultant®, I have adhered to IMCUSA's enforceable Code of Ethics. Composed of the 15 (simple) parts, consider if PwC’s partners and professionals had adhered to the same. Take only five, individually or collectively, as pertinent examples:
1.0 I will serve my clients with integrity, competence, independence, objectivity, and professionalism.
5.0 I will treat appropriately all confidential client information that is not public knowledge, take reasonable steps to prevent it from access by unauthorized people, and will not take advantage of proprietary or privileged information, either for use by myself, the client’s firm, or another client, without the client’s permission.
6.0 I will avoid conflicts of interest or the appearance of such and will immediately disclose to the client circumstances or interests that I believe may influence my judgment or objectivity.
11.0 If within the scope of my engagement, I will report to appropriate authorities within or external to the client organization any occurrences of malfeasance, dangerous behavior, or illegal activities.
13.0 I will represent the profession with integrity and professionalism in my relations with my clients, colleagues, and the general public.
Read these five. Deeply consider, as a management consultant, how an understanding and adherence to these would have effectively precluded the ethics lapses and conflict of interests that now severely tarnished PwC’s reputation and will likely cost the firm and its partners significant amount of money among other future problems.
Five simple statements (out of 15 total)! Simply guiding a consultant to do the right thing.
It is absolutely incomprehensible to me that greed and avarice supplanted doing the right thing.
