PricewaterhouseCoopers has recruited two prestigious outside board members in what appears to be a first for a Big Four firm: former Commerce Secretary and Kellogg CEO Carlos Gutierrez, and former U.S. Navy Admiral Carol Pottenger.
“Good corporate governance is critical to enhancing public trust in institutions,” said PwC Governance Insights Center Leader and partner Paula Loop. “We believe that adding outside directors and adopting some corporate governance best practices help maintain greater independence and objectivity. By bringing in some outside voices into our boardroom, I think we’re increasing the diversity, and we’re trying to proactively address the risks of group think, which is something you hear a lot about. This is something that’s getting a lot of attention in the corporate governance world.”
Finding outside directors who weren’t also PwC clients proved to be difficult when the firm began looking for external board members. “The thing that really played the most significant role is just the whole independence requirements that we’re subject to,” said Loop. “It was really challenging to find directors, so it took us some period of time to find outside directors that could join our board, as compared to a publicly traded company, because our external directors can’t be employed by or associated with any of our audit clients. That was a little bit more challenging than you would think.”
Pottenger is a U.S. Navy veteran with 36 years of active service who was also the Navy’s first female admiral. Gutierrez is a former U.S. Commerce Secretary under President George W. Bush, as well as the former chairman and CEO of Kellogg.
“Carol brings such amazing experience leading a huge command of individuals,” said Loop. “She’s got a great global perspective. We really just loved that about her. And Carlos, while he did serve as U.S. Commerce Secretary under George W. Bush, what really appealed to us there is his diversity roles in that he was the CEO of Kellogg Company. A CEO of a public company is very intriguing to most boards, and then he currently serves on the boards of MetLife and Time Warner and Occidental, so those experiences we thought were really helpful for us.”
Pottenger and Gutierrez joined as full members of the board, effective July 1. Loop anticipates they will be involved in discussions around strategy, oversight of investment practices and other financial decisions.
She believes PwC is the first of the Big Four firms to have outside directors, and perhaps it will set a trend. “I don’t believe I can speak to whether it will be a trend with the rest of the folks, but I do know we’re the first and we’re looking forward to it,” she said.
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