UK Consulting chief is front-runner for Deloitte top job

Global auditing and advisory firm Deloitte has commenced the process of replacing outgoing North-West Europe CEO David Sproul in 2019. Sproul has served the maximum two terms in office, while UK Consulting boss Richard Houston is widely touted as the front-runner to succeed him.

The UK audit market is approaching a pivotal moment, having come under unprecedented scrutiny in the past year. Following the high-profile collapse of Carillion, the situation has escalated to such a level of hostility to the Big Four that the ‘break-up’ of the quartet is often openly discussed by political figures in Britain. After a litany of further auditing scandals in recent months, the Big Four now face an uncomfortable festive period, with the provisional findings of a probe from the Competition & Markets Authority set to be released in the coming weeks.

At the same time, a number of the top names in the professional services industry are in the process of overhauling their upper ranks. Top-six accounting and auditing firm Grant Thornton is in the process of installing David Dunckley as the successor of ousted UK CEO Sacha Romanovitch, while Big Four firm EY will commence the replacement of its Global Chairman and CEO, Mark Weinberger, in the New Year.  

Now, Deloitte has joined the list of top auditing and advisory firms reshuffling its executive team, with David Sproul due to step down as CEO of Deloitte UK and Deloitte North-West Europe. Sproul will leave office in May, having after served the maximum two terms at the top of Deloitte’s regional operations.

Sproul was initially elected in 2011, after just eight years at the firm. This is exceptional in an industry where Partners tend to shun outsiders vying for top roles, especially as Sproul was at Arthur Andersen when its role in fraud at energy group Enron was uncovered. Sproul managed to overcome the negative association with this debacle, however, and since his coronation as CEO has presided over eight consecutive years of revenue growth at Deloitte.

While the firm’s growth has remained solid, however, in other respects his tenure has been a turbulent one. In 2016, a critical memo about Brexit written by one of the firm's consultants triggered an unprecedented attack from the UK Prime Minister. Theresa May’s office claimed that by saying the Government had no “overall negotiation strategy” for Brexit – whether or not that might have been revealed to be the case – the firm was “touting for business” through “unsolicited” analysis. Sproul apologised, while Deloitte was effectively forced to implement a self-imposed six-month ban on bids for central government contracts.

Contenders

While the Big Four firm since resumed tendering for Whitehall contracts, Deputy Chief Executive for North-West Europe Sharon Thorne risked a further rift last year when she tweeted that the then-Foreign Secretary, Boris Johnson, was "a national embarrassment." As Sproul’s deputy, Thorne would have been thought to be a natural successor by some, and was reported during the summer to have been a candidate for the top job, but Sky News has since reported that insiders have suggested she has not been formally ‘in the race’.

At the time of writing, it is instead understood that the race is between just two candidates. Richard Houston, Deloitte's UK Managing Partner of Consulting, has emerged in recent weeks as the front-runner, while he is said to face opposition from Panos Kakoullis, a Managing Director in Deloitte's Audit practice and the firm’s Global Audit and Assurance Leader.

Once the company’s Board has met to recommend a successor, a partnership vote is expected to take place in the coming weeks among the firm's 2,300 Partners in the North-West Europe region, including more than 1,000 Partners based in the UK.

Some colleagues and competitors have suggested the candidacy of Kakoullis may have been damaged by his role on the audit side of operations. Deloitte’s auditing has been under sustained pressure from the Financial Reporting Council throughout the duration of 2018 in particular.