The chief executive of Grant Thornton has come under pressure from partners who have raised concerns about the firm’s financial performance, her leadership style and strategy.
Sacha Romanovitch, who became the first female chief executive of a major UK accounting firm in 2015, has been criticised by partners over what they describe as a “culture of fear”.
The dissent comes at a significant time for Ms Romanovitch, who is weeks away from launching a bid for a second term at the helm. Meanwhile, Grant Thornton is increasingly seen among politicians as a crucial challenger to the “Big Four” accounting firms that dominate the audit market.
In what has been interpreted as an attempt to undermine her running for a second term, an anonymous note — that states it represents the views of 15 partners or directors at the firm — has been sent to several media outlets setting out a list of criticisms of the chief executive and her leadership team.
The note’s harsher criticisms claimed that Ms Romanovitch was pursuing a “socialist agenda”, that the firm was “out of control” and has “no focus on profitability”.
Three Grant Thornton partners, who requested anonymity, said they were not responsible for the note and that it was exaggerated or “mischievous” in places. But they said they sympathised with some of the grievances it contained — including the criticism of the firm’s recent financial performance, its heavy focus on marketing and branding over profits, and the leadership team’s heavy-handed response to recent criticism.
If profits get unhinged from purpose it might not hurt you now, but it will come back and bite you on the bum
The firm’s profits before tax fell 12 per cent to £72m in the 12 months after Ms Romanovitch took over, although they rose 8 per cent to £78m in the following year, which ended in June 2017.
Ms Romanovitch has restructured the firm so that some of its profits are shared with all staff rather than just its partners. She has also repositioned it to focus on “profits with purpose”, which has meant dropping less savoury clients in an attempt to grow sustainably.
Questions about the direction the firm has taken were raised by several partners at a meeting organised at its London headquarters in April, according to people in the room. The meeting was attended by more than 70 partners, several of whom raised concerns about Grant Thornton’s strategy.
Since then, Robert Hannah, a Grant Thornton veteran who has been at the firm for nearly 30 years and was openly critical of recent decisions, was removed from the strategic leadership team. The change has been criticised by several partners who fear he was effectively demoted for speaking out. Mr Hannah did not respond to a request for comment.
Ms Romanovitch said she was aware some partners did not support all the changes she had made. “That is normal in any partnership,” she said. She added that the implication that partners were unable to question her decision-making was “deeply frustrating” as there were “lots of forums for partners to give feedback”.
She added: “A small cadre of partners will find it hard we are making decisions that will depress profits in the short term but will help profits in the long term. What has been the challenge with more establishment partners is helping them to get their heads around the fact that profits and purpose are not incompatible. If profits get unhinged from purpose it might not hurt you now, but it will come back and bite you on the bum.”
Ms Romanovitch’s supporters have added that while a minority of partners may dislike her approach, she is popular with the firm’s 4,500 employees and a majority of its 200 partners. Meanwhile Grant Thornton’s brand recognition is at an all-time high.
“Large banks are asking us to do their audits — that would not have happened three years ago,” said one partner at the firm. “We are getting into boardrooms we would never have got into before and that’s down to one person: Sacha.”
Others have pointed out that she is the second female chief executive of a large accounting firm to have come under pressure from colleagues this year, after the Deloitte US chief executive was blocked from running for a second term. Several individuals who know Ms Romanovitch questioned whether the criticism was laced with sexism from an “old guard” of partners who dislike changes to the status quo.
Grant Thornton said it would investigate the source of the note sent to the press, as it also contained a copy of Ms Romanovitch’s most recent performance review and breached its data protection rules.
In November, a partnership oversight board will reappoint Ms Romanovitch or choose a new chief executive.
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