EY extends UK boss’ tenure as top team revamped

EY has extended the tenure of its UK boss Hywel Ball, allowing him to work beyond the firm’s mandatory retirement age of 60, launching an executive cut just weeks after plans to split the global business into two collapsed.

Ball’s future has been called into question after he backed EY’s failed attempt to split its audit and advisory divisions globally. The UK board decided to extend its mandate before the plan, code-named Project Everest, was scrapped last month, company officials told the Financial Times.

EY declined to confirm the length of the extension, and its board reserves the right to extend Ball’s stay again in the future. Ball, who turned 60 in August, is normally due to retire at the end of the current financial year, on June 30, under EY’s partnership agreement.

Instead, Ball announced sweeping management changes last week after nearly three years, telling partners he would cut the executive team from 13 to eight. Two women who ran against him to head the company in 2020 also left the team.

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A person familiar with the changes said they signaled the “next phase” of EY’s UK strategy, while another added there was no sign Ball was heading for an exit.

Unlike his British counterparts at the other Big Four firms, Ball’s appointment was not fixed term. But a lengthy stay at the top would come as a surprise to some at EY, where many thought he would have a relatively short tenure when he was appointed in 2020, former partners and colleagues said.

The former audit chief was seen as a safe pair of hands to steer EY through regulatory upheaval as the UK accounting watchdog pushed the firms to improve their audits and reduce conflicts of interest.

Ball was also supported by EY’s global bosses, who had a direct role in his appointment. However, their future was called into question by the collapse of Project Everest. Global president Carmine Di Sibio was extended beyond the normal retirement age before Everest collapsed, allowing him to see the project through.

In a memo to partners last week and seen by the FT, Ball indicated that the UK management overhaul was “a start” and one of the people familiar with the matter said he would “make further changes”.

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Ball pointed internally to the UK firm’s strong financial performance during his tenure, telling partners to expect “strong double-digit growth” in the current financial year.

In his note, he said the partners, who earned an average of £803,000 last year, “wanted to simplify the business . . . giving our partners more time to serve our customers and drive profitable growth”.

He and financial services chief Anna Anthony last month pledged to partners to cut costs and tackle “efficiencies”, acknowledging that the Everest failure threatened to damage EY’s brand.

The changes are likely to be welcomed by some partners who have long complained about partners in internal management positions not generating revenue from work they do for clients. “You’re working hard every day for a bunch of people who aren’t doing very much,” said one former partner.

The most prominent departures from the management team will be head of customer service Alison Kay and chief operating officer Lynn Rattigan.

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Both women lost out to Ball in the race to succeed Steve Varley as senior partner in 2020, people familiar with the race said.

Kay was seen as a possible successor to Ball, having stepped into a powerful, newly created role after failing to secure the top job. EY takes a role in EMEIA.

Heads of legal, talent and risk are among those leaving the executive team and instead reporting to the downsized executive every three months. Steve Ivermee, head of UK strategy and transactions, one of EY’s four service lines, will be replaced from early July.

All persons leaving the management team will remain with the company.

EY said that “partner tenures are regularly extended in the UK and across the global network for a variety of reasons, including client delivery and management responsibilities”. About 10 partners per year were able to continue working after turning 60, said a company employee.

Source: https://www.ft.com/content/db633fcc-2c37-4ec4-a235-a96245692462