This Transparency Report is published in accordance with the requirements for third country auditors in Article 45 (5)(e) of the European Communities (Statutory Audits) (Directive 2006/43/EC) for our financial year ended 30 June 2020.
The Transparency Report was approved and signed by Simon Perry as Senior Partner on 31 October 2020 on behalf of PricewaterhouseCoopers CI LLP (‘PwC Channel Islands’).
Simon Perry, Senior Partner, PwC Channel Islands
I’m delighted to introduce our Transparency Report. The annual publication is designed to help our key stakeholders and wider society within the Channel Islands to understand our objectives, what we expect from our people and how we’re governed. While PwC is a multidisciplinary firm, this report is primarily focused on our audit practice and related services.
This year’s report includes an overview of how we’ve managed the impact of COVID-19. The pandemic has affected every aspect of our work, our personal and family lives, and how we engage with the clients and communities we serve.
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 155 countries with more than 284,000 people who are committed to delivering quality in assurance, advisory and tax services. We’re committed to driving a strong culture of quality and excellence that is core to our purpose.
Lockdown and recession have imposed enormous challenges on the organisations we audit, while highlighting the important role auditors play in society. Building trust in the transparency, objectivity and effectiveness of our audit work is key to our purpose and critical to providing reporting that shareholders can rely on.
Local regulators offered the option to delay audit opinions and filing. However, we chose from the outset to keep to existing timelines. Given the uncertainty within the economy, we believe that clear, credible and timely audit is critical in sustaining market confidence and helping local businesses steer through uncertainty.
As a leadership team, we need to do everything we can to protect and enhance the wellbeing of our people, their families and communities. It’s hard to underestimate the emotional toll of being stuck for weeks and months at home. Many of our people were looking after children while trying to get on with work, while others have faced the isolation of being in lockdown alone. As a working community that brings together people from all over the world, many of our colleagues have also faced the anxiety of not being able to visit loved ones abroad. The other big worry is of course livelihoods and careers at a time when so many jobs across our islands and other parts of the world are at risk. Supporting each other and allaying concerns over possible redundancies have therefore been our absolute priorities.
That was the first and most important decision we made at the outset of the crisis to guarantee, that for as long as possible, nobody within our team would face the threat of redundancy. That message formed a central part of our commitment to staff that we’re managing the business for the long-term, and not looking at any short-term responses. To protect employment across our firm, our partners came together to agree they would take a pay cut, along with suspension of pension contributions and dividends in order to strengthen our own balance sheet and help us weather the storm. Beyond the money this retained in the business, this commitment sent a clear message to our team that we’re prepared to put our money where our mouth is in protecting all livelihoods and career aspirations.
To stay connected as a team during lockdown, we made sure that our people had access to the tools and technology they needed to work safely and easily from home. We also set up group chats, virtual socials, a buddy system and lots of other ways we could stay together virtually and minimise as best we could, feelings of stress and isolation.
Once lockdown was eased, people living alone were given the first opportunity to return to the offices, so they could enjoy the company of colleagues once again. At the same time, no pressure was applied to anyone to come into the office if they were feeling in any way anxious. Everyone can work remotely as and when they want – this is a long-term commitment.
As a leadership team, we were determined to stay on top of any issues or concerns, meeting every day in ‘huddles’ to discuss staff welfare and what our people might need and what more we could do. This was supported by regular virtual ‘town hall’ meetings, where colleagues came together and shared ideas and concerns and asked questions of the leadership team.
One of the most satisfying aspects of these past few months has been seeing how the developments in flexible working and digital connectivity we’ve put in place in recent years have demonstrated their value. We want people to have the autonomy and flexibility to get the job done in a way that best suits them personally and professionally. Our investment in technology and digital upskilling has opened the door. However, what really makes this possible is the right culture and trust. This autonomy and work-life balance are now expectations for the generations coming into the workforce and moving up through our organisation.
What’s really good is that these developments are helping to clear away the last vestiges of presenteeism, in which ambitious professionals might have believed that they need to be seen working late in the office to move up the ladder. They should be with their children, singing in a choir in the evening or whatever they want to do, while knowing that this in no way holds back their chances of promotion. Indeed, we believe that trust, autonomy and work-life balance make us more productive and better able to meet client needs.
Therefore, as hard as the past year has been, adversity has brought out the best in our people. We’ve also discovered fresh possibilities and made strides in digitisation, flexibility and workforce empowerment that might otherwise have taken much longer. I’ve learned a great deal about myself and all our people and how resilient we are.
As scrutiny and challenge of audits intensify, we’re actively seeking to strengthen quality, oversight and control.
In July, this included separating the role of External Audit Leader and Territory Senior Partner. This will enable the new audit lead, Karl Hairon, to dedicate all his time and expertise to developing audit quality and ensuring audit suitability. I’ll continue in my role as Territory Senior Partner.
Other key developments include separating our Risk and Quality divisions. Risk will focus on setting the right approach and ensuring the appropriate people are assigned to particular roles and engagements. Quality will focus on day-to-may management and compliance with regulations and internal procedures. These two areas are growing as the business grows and becomes more complex and I felt it was right to split the functions and have two partners sharing the burden.
Diversity and inclusion are critical to how we operate, from both a fairness and business perspective. We want everyone who works here to feel they can bring their whole self to work and realise their own unique potential. The breadth of experience and perspective that comes from promoting diversity and inclusion are a critical part of our ability to sustain quality and thrive.
In July 2020, we appointed seven new directors, four of whom are women. These new leaders also come from all continents of the world. This more diverse team offers new and different role models to help inspire people coming into and up through our organisation.
A further sign of sustained progress on diversity is once again achieving a narrow gender pay gap of 2% within PwC Channel Islands. To put this into perspective, the pay gap for UK businesses as a whole is more than 10% in favour of men.
However, we recognise that we still have a long way to go, especially at the most senior levels of the firm. A particular focus is female retention at these levels. We need to be looking at the pressures staff face and take proactive steps to ease them. We also want our people to feel they can share concerns and know that line managers and leaders will do all they can to address them.
Last year, I reported on the launch of our workforce transformation drive. This aims to ensure that all of our 400+ colleagues here in the Channel Islands have the digital skills to improve client service and boost their employability. We call it #dontgetleftbehind.
The starting point is our digital fitness app. The app assesses each person’s baseline digital capabilities – their ‘digital health’ – and then helps to create a personalised plan for skills’ development and application. Employees can also use the app to measure progress and set new goals.
To make learning more suited to personal preferences, our tech-enabled learning includes podcasts, gamification and multimedia content. People can therefore be listening to a podcast when out running or learning in a traditional classroom setting – whatever suits them best.
To be successful, we believe that upskilling should inspire and empower. Our people are encouraged to apply new skills in their day-to-day work, and also develop digital innovations and solutions.
To take upskilling to the next level, we’ve introduced a digital accelerator programme. This enables employees to explore fresh career paths and deepen their skills in digital specialities. ‘Accelerators’ also take the lead in challenging what we do, and how it could be done better to make it more efficient and useful to clients.
This resulting ‘playlist’ of developments ranges from harnessing tech to reduce costs and free up staff time, to introducing visualisation tools to make information for clients more interactive and usable.
Effective anti-money laundering (AML), know your customer (KYC) and other customer due diligence safeguards are a critical part of the global fight against financial crime.
We’re determined to be at the forefront of developments in customer due diligence. In recognition of our work in this area, we were chosen to take the lead in developing a new KYC system for the Global PwC network, which will be rolled out across the world from November 2020.
Beyond our own work, lockdown has been a catalyst for exploring new ways of engaging with the community. One example was this year’s virtual work experience programme. While it’s always great to have young people in the office on work experience, this wasn’t possible at the time. However, we actually had more people on work experience than ever before (more than a hundred rather than the usual dozen or so), and the level of engagement was better than ever. The virtual programme enabled us to offer the kind of interactive and intuitive experience that students are accustomed to in other aspects of their lives.
Building on the success of our virtual work experience, we’re now launching Hive Academy, a tech skills programme, in schools across the Channel Islands. Rather than solely focusing on tech training in isolation, the Hive Academy programme also looks at the kind of capabilities and skills that are critical in helping children be better equipped for the future of work. These programmes include creativity, design thinking, problem-solving, emotional intelligence, negotiation and collaboration. We’ve hired a dedicated training team to lead the initiative and it will soon be rolled out to local schools across the Channel Islands. Many of our people will also be contributing their time and expertise through our volunteering hours initiative.
As we explored in our Upskilling the Channel Islands’ workforce for a digital world report, these digital skills can not only help to make people more employable and ready for the future, but also open the way to more fulfilling work and bolster the long-term prosperity of our islands.
I hope you find this report useful. If there are any issues that you would like to discuss, please feel free to get in touch.