KPMG adds independent director to U.S. board
KPMG LLP has appointed its first independent director to its U.S. board of directors, retired Air Force General Janet C. Wolfenbarger, as the Big Four firm’s affiliates face mounting scrutiny over audits in the U.S., U.K., South Africa and other parts of the world.
The firm plans to name other independent directors in the months ahead. KPMG U.S. chair and CEO Lynne Doughtie originally announced plans to add outside directors to KPMG back in May in an article she wrote for Accounting Today (see Building trust by adding outside directors at KPMG).
“We regularly evaluate ways to improve how we manage our business to meet the expectations of our stakeholders, including the companies we serve and their boards and investors, the capital markets, our regulators and our people,” she wrote. “In 2017, certain events, and the actions of a few former colleagues, caused us to take a deeper dive into examining our culture and values, and to assess with fresh eyes how we could improve and best position our more than 100 year-old firm for future success.”
The Securities and Exchange Commission filed civil charges in January against a group of former senior partners at KPMG and officials from the Public Company Accounting Oversight Board after the firm used information about upcoming PCAOB inspections (see SEC charges former KPMG and PCAOB officials with ‘stealing’ inspection exam).
Wolfenbarger retired from the U.S. Air Force in 2015, after 35 years as a decorated officer, becoming the first four-star female general in the Air Force. She also received the prestigious Order of the Sword award from the Air Force for her service.
“In today’s complex and fast-moving global business environment, successful organizations regularly reassess their missions and responsibilities to the markets they serve,” Doughtie said in a statement Thursday. “The addition of this highly qualified and accomplished independent director to KPMG’s U.S. board will ensure a broader range of constructive viewpoints and provide experience complementary to the deep expertise of our partners who serve on our board. KPMG is a vibrant private partnership with a rich 120 year history, and we are pleased to add a new director whose impressive credentials and character will benefit and further strengthen our firm. We’re confident that the addition of General Wolfenbarger and future independent directors is good for our firm and our profession — and underscores to our clients, regulators and the public that we are resolute about change and steadfast in our commitment to quality, innovative thinking and a values-driven culture. We have taken the bold step to incorporate independent directors prominently into our governance, not just as outside advisors, but placing them squarely in KPMG’s chain of command to work alongside us as we continue to build a stronger and better firm.”
Outside the U.S., other member firms of the KPMG International network have come under fire for audits this year. In the United Kingdom, KPMG has been criticized by the Financial Reporting Council for its audits of U.K. contractor Carillion and the fashion company Ted Baker Plc, fueling calls for breaking up the audit practices of Big Four firms, while KPMG’s South African firm has been faulted for audits of companies controlled by the powerful Gupta family.