KPMG South Africa is looking outwards for a new broom to sweep clean.
Announcing the departure of Nhlamulo Dlomu from the CEO role on Wednesday, the audit firm’s board stated specifically that it had come to the conclusion that a non KPMG-aligned CEO needed to take the wheel.
“Given the scale of the reputational challenges facing both KPMG and the industry, the board has decided that a new chief executive from outside the firm, with strong industry experience, will optimise prospects of rebuilding trust,” it stated.
Dlomu had been in place as CEO for little more than a year, with her appointment announced in September 2017 amid a raft of leadership changes aimed at steadying KPMG’s course.
Hers was an in-house appointment which raised some eyebrows at the time, on the grounds that her background was in psychology and human resources rather than accountancy or auditing.
The fact that the KPMG statement on Wednesday highlighted the need for a new CEO with “strong industry experience” may lend credence to the concerns of those who suggested that an HR practitioner might not be the logical choice to lead an audit firm in crisis.
But the board’s statement had nothing but praise for Dlomu. Chairman Wiseman Nkuhlu paid tribute to Dlomu’s “courage, integrity and sound judgement at a time of great challenge”.
Nkhulu said that Dlomu had “helped rebuild the foundations of the firm’s reputation and refocused it as a purpose-driven organisation more aligned to the public interest”.
Asked by Daily Maverick for practical examples of what measures Dlomu had implemented, KPMG spokesperson Nqubeko Sibiya directed us to the KPMG South Africa Baseline Report 2018.
Among the measures listed as taken by KPMG to “address identified issues” are the introduction of “additional training on exercising professional scepticism” for staff, and “stricter rules on accepting and providing of hospitality”.
Interviewed on Radio 702 on Wednesday morning, Nkuhlu was similarly asked to list examples of Dlomu’s achievements while serving as CEO.
The KPMG board chairman replied that Dlomu’s achievements were only “visible internally”.
The job of KPMG CEO seemed a decidedly poisoned chalice at the time when Dlomu was appointed. It immediately fell to Dlomu to issue a public apology on behalf of KPMG, after months of damaging revelations about the firm’s involvement in both the #Guptaleaks scandal and the collapse of SARS.
“This has been a painful period and the firm has fallen short of the standards we set for ourselves, and that the public rightly expects from us,” Dlomu said in her first public statement.
In the year since she took the reins at KPMG, the firm has continued to lose clients and has also seen key senior staff depart.
It was clear that Dlomu would be kept on a tight leash from one of the first interviews the new CEO gave, to City Press, in which it was reported that the KPMG mother ship had deployed a lawyer, a communications specialist and a London executive to sit in on the interview.
During that interview, KPMG’s interim COO Andrew Cranston claimed that Dlomu had always been in line for the CEO position. He said that before the Gupta scandal broke, the firm had intended to promote her to the role in 2019.
Now, however, Dlomu is being shifted to a “new global role” which will focus on “organisational culture change and ethical leadership”.
There is no indication as to the identity of Dlomu’s replacement in the CEO role, beyond KPMG’s emphasis that the successor will be drawn from “outside the firm”.
Spokesperson Sibiya told Daily Maverick that although the short listing process was “well advanced”, an announcement as to the successful candidate should not be expected this month. DM
"The end may justify the means as long as there is something that justifies the end." ~ Leon Trotsky
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