Transparency Report 2023

Far from being just a regulatory necessity, effective audit is crucial in helping to address these short and long-term issues. 

In times of economic uncertainty, audit can help give investors the confidence they need to sustain investment and protect jobs. Similarly, investment in the green infrastructure and innovation needed to drive the transition to net zero depends on transparent, informative and accurate financial information. Through careful examination, verification and challenge, high quality audit helps to make sure that the information being presented is true and fair. 

But the challenges our audit teams face are ratcheting up all the time as disruption mounts, business operations become increasingly complex and regulatory and investor demands grow ever more exacting. This is also a time when stakeholder trust is more fragile and difficult to earn than ever.

In our view, delivering quality audits requires three foundations – talent, technology and trust. Rather than being distinct priorities, PwC’s human-led, tech-powered The New Equation strategy recognises the interdependence of talent, technology and trust in building credibility and creating a community of problem-solvers.

We believe that the successful organisations of the future will be the ones that create a virtuous circle between building trust and delivering sustained outcomes.

Looking specifically at talent, we need to attract, nurture and inspire high quality auditors at a time when people with the necessary qualifications and potential are in short supply. This is a problem everywhere, but especially so here in the Channel Islands where there aren’t enough people coming into the workforce to offset ageing populations.

We can’t just rely on short-term fixes to secure the talent we need. We have to develop multigenerational solutions, not just within PwC, but the Channel Islands as a whole.

The natural starting point for talent development is schools. Our Hive Hackers programme helps primary and secondary school students to gain the skills and confidence they need to thrive in an increasingly digitised world. Since Hive Hackers was launched in 2020, we’ve delivered face-to-face and remote courses to more than 4,000 primary school students and 600 secondary students across Guernsey, Jersey, Alderney and Sark.

Rather than being an after-school club for students already interested in computing, we want Hive Hackers to appeal to all children and young people, however tech-savvy they are to start with. The courses are fully aligned with the national curriculum and designed to be taught as part of regular lessons. At the same time, we try to make the courses as enjoyable and accessible as possible.

Through initiatives like Hive Hackers, we’re able to bring our purpose and commitment to our communities to life. The skills base within the Channel Islands is stronger as a result. And, yes, we hope that by offering young people this kind of inspiration and fun, they might consider working for us when they leave education.

As part of this long-term focus, we’ve also been developing new pathways into the audit profession including our higher apprenticeship programme for school-leavers. Alongside our graduate programme, this gives us access to a great pool of talent and helps create a more diverse workforce. In turn, trainees can open up a career as chartered accountants without being burdened with significant student debt. 

Our ‘Flying Start’ programme will further increase our access to talent, strengthen the diversity of backgrounds within our workforce and support social mobility across the islands as a whole. The programme opens up opportunities to work towards a degree in accountancy from a leading university, while earning a salary and acquiring on-the-job training and is open to applicants with a range of qualifications.

Once part of the team, we seek to empower our people and support their wellbeing and work-life balance through flexibility in how, when and where they work. On top of being the right thing to do, we benefit from a more motivated workforce and the ability to attract and retain great auditors and support staff. 

Interestingly, while our workplace flexibility includes the option to work from home, we have one of the highest office attendance rates within the UK offices of PwC, so much so that we’ve expanded our office space in Guernsey and are looking to do so in Jersey in the coming year. Whilst shorter local commutes might be a factor in higher rates of office working, our staff are also motivated by a desire to collaborate and learn from others. I think it reflects the sense of belonging and togetherness that are so important to our success. 

As ways of working evolve, the challenge is how to get the balance right. The office plays a critical role in fostering innovation, enhancing personal development and increasing access to face-to-face coaching and encouraging innovation. But offering our people the flexibility to get the mix that works for them and their teams is the key.

We believe that strengthening the diversity within our workforce is crucial. Key priorities include broadening the gender and ethnic balance within our senior management team.

The islands of Guernsey and Jersey have high numbers of ‘non-employed’ women, as well as both men and women who are not economically active over the age of 50. This is a significant pool of potential talent that we at PwC are determined to tap into. 

The starting point for boosting diversity is gathering data to understand our workforce demographics. This provides us with an informed and trackable basis to tackle equality gaps and appeal to a wider demographic. 

We also recognise the importance of creating and sustaining a culture that is genuinely inclusive and offers everyone the chance to succeed. The direction, behaviour and accountability of our senior team play a key role in this – for example, if people see that a member of the leadership team works flexibly, they are more likely to take up such opportunities without fear it could hamper their chances of promotion.

How far have we come? We’re making some progress. If we look at our gender pay gap across all staff, a key indicator of the proportion of women within high paid roles, our 2023 gap was 2.3% in favour of men, improved from 3.8% in 2022. This compares to a 16% pay gap in the economy of Guernsey and 11% in Jersey. But when we include partners in our PwC Channel Islands gender pay gap calculation, the gap is higher and underlines the importance of our continued focus on creating more gender balance at the partnership level.

More broadly, the audit and support teams in our offices in Alderney, Guernsey and Jersey bring together a rich array of experience, expertise and life journeys. Some like me have been born and bred on the islands, then worked abroad, before returning to continue their careers here, others have made their homes and careers here. In all, our workforce brings together people from more than 30 nationalities. I believe that this diversity gives us fresh perspectives and helps foster innovative ideas, while guarding against the dangers of groupthink.

In seeking to retain and motivate great audit teams, we recognise the importance of keeping work fresh, offering new challenges and reducing the risk of burnout. This might be working in a new team, going on a secondment abroad or taking some time off to study or go travelling. 

In the final reckoning, PwC will always be a net exporter of talent. Many auditors choose to take up other opportunities once they’ve qualified with us. But we see this as a positive, a chance to strengthen the talent pool and wider economic potential within our islands. 

From a technology perspective, our capabilities are being progressively enhanced by PwC’s next generation audit ecosystem. In line with our human-led, tech-powered approach, next generation audit combines expertise and innovation to streamline our audit process. The results should be a smoother experience that addresses common challenges and minimises error. We’re also looking to reduce the overall audit burden by streamlining and standardising processes and focusing our work on areas of higher risk. 

We know that our ability to build and sustain public trust depends on what we do as a business, rather than just what we say. 

An important part of this is our strategy and progress on sustainability, social inclusion and other Environmental, Social and Governance (ESG) priorities. 

By the end of this decade, we’re committed to cut our greenhouse gas emissions by 50% from our 2019 baseline. Contributing measures range from reducing carbon-intensive travel to switching to 100% renewable energy. In line with The New Equation strategy, our ESG commitment also includes transparency, and helping to develop robust ESG reporting frameworks and standards. In this respect, the main priority in 2022-23 has been developing the right metrics to measure the journey towards our goals. We’re now finalising these ready for future disclosure. 

Developing credible and comprehensive emissions measurement is challenging. But important strides are being made. Our work can strengthen our own reporting, while providing insights and guidance for clients in their increasing ESG reporting, some of which could eventually be subject to independent audit.

We need to be ready for the future by strengthening our agility, capability and ability to sustain public trust. In laying the foundations for our own growth and support for clients and investors, key developments ahead include the planned modernisation of our operating model and support functions. The overhaul will help us to boost capacity, future-proof capabilities and speed up decision making.