KPMG axes financial services consulting head over ‘misconduct’

23 August 2019 4 min. read
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KPMG has ousted another of its leading Partners in the UK, following a disciplinary procedure regarding his conduct on messaging platform Whatsapp. Tim Howarth, who was Head of KPMG’s British financial services consulting practice, is the third senior partner to be investigated by the firm this year over claims of misconduct.

Tim Howarth joined KPMG in 2005, arriving from the Financial Services Authority (a precursor the Financial Conduct Authority) having spent eight years with the financial watchdog. Having held various policy and project roles with the entity relating to corporate governance and security processes, Howarth took on a number of governance and control advisory responsibilities at KPMG, specialising in financial services companies with clients including international banks, building societies, insurers, London Market, asset managers, brokers and retailers dealing in financial services products.

As a Partner and UK Head of Financial Services Consulting, Howarth is understood to have been lead partner for one of the firm’s largest clients, Lloyds Banking Group. He also ran KPMG’s risk consulting practice, which advises company boards on managing risks such as fraud and financial crime, regulatory compliance, cyber-attacks and corporate governance. However, after an investigation into the conduct of the Senior Partner on messaging application Whatsapp, Howarth has been forced out of the firm with immediate effect.

KPMG axes financial services consulting head over 'misconduct'

According to reports from the Financial Times, Howarth was summoned to a disciplinary hearing earlier in August, before removing his profile from the firm’s website the following day. According to the Financial Times, two sources briefed on the matter told the newspaper that Howarth’s exit related to messages sent via WhatsApp – though to whom these were delivered, or what they contained remains a mystery.

“I have not been given the reason for that decision,” Howarth told the Financial Times. “I had already resigned from the KPMG partnership. I did not believe that the process was fair or would lead to a just outcome. There is no complainant and there were no formal allegations pursued by anyone.”

Commenting on his dismissal, Howarth expressed his surprise at what he labelled a “bizarre decision”, claiming it was still “under appeal.” Howarth is the third Senior Partner to be investigated by KPMG in 2019 over claims of misconduct, amid what has fast become a reputational crisis for the Big Four member – something which may account for the swiftness of his departure.

In January, while calls for a criminal investigation into the firm’s work at collapsed outsourcer Carillion continued to gain traction, Peter Meehan, who had been KPMG’s lead Audit Partner at the client, was suspended by the firm. Both KPMG and the accounting watchdog of the Financial Reporting Council are probing Meehan and his team, and whether they may have provided documents to the regulator that were backdated in relation to Carillion.

KPMG’s reputation has also sustained self-inflicted wounds thanks to a protracted “bullying” storm relating to the behaviour of Senior Partner Sanjay Thakkar. The former Head of Deal Advisory was one of KPMG’s 14-strong executive committee in Britain. Thakkar stepped down from his role after KPMG provoked a media onslaught for sending him to ‘leadership training’ as a response to allegations of bullying from several senior staff members.

Maggie Brereton, who was Head of UK Transaction Services and a board member, and Ina Kjaer, who was Head of UK Integration in the Deal Advisory team, both resigned over the matter. An ensuing storm of bad publicity eventually saw Thakkar step aside “in the wider interest of the firm”, according to a leaked internal email.

Evidently, KPMG had hoped Thakkar's stepping down would put an end to the matter. The company was quick to send an article to Accountancy Age, in which two senior female executives at KPMG “weigh in on allegation processes.” One added “we have processes in place, we follow those processes” before suggesting “not everyone will always like the outcome of those processes.” This added fuel to the fire, and accounting news site Going Concern was among a number of sources to suggest on Twitter that “KPMG UK doesn’t really care if you don’t like how it handled complaints against Partner accused of bullying.”

This time, however, KPMG has resolved to act quickly and avoid further controversy. Commenting on the matter, a spokesperson from the firm said, “We hold all of our people to a very high standard and take swift and appropriate action against any individual whose behaviour contravenes the firm’s values. As part of this commitment, we can confirm conduct issues have been raised related to a partner and, following an internal investigation and disciplinary panel, that partner has left the firm. Under our process the partner has appealed.”