Managing risk, supported by robust governance, is vital for the resilience of our firm, our clients and our stakeholders
Resilient, purpose-led, agile
The firm’s governance is guided by our purpose – to build trust in society and solve important problems. Our purpose is central to our decision making processes and our risk appetite. It also informs how we manage our business in the interests of our people, partners and stakeholders. Over this financial year, we managed a number of issues, in an increasingly complex and changing environment, reinforcing the importance of our risk-management approach and our firm governance. The impact of the war in Ukraine has been particularly notable, requiring us to respond, at speed, to significant complexities as a result of the economic sanctions introduced in multiple jurisdictions.
Together with our global network colleagues and fellow member firms, we moved quickly to denounce the actions of Russia following its invasion of Ukraine, offering support to our colleagues based in Ukraine, and moving to exit our network firms in Russia and Belarus.
In response to Russia's invasion of Ukraine there has been a significant increase in new sanctions in the UK and globally. These have been introduced at a rapid pace, challenging our sanctions teams to work at speed to ensure the firm was fully compliant.
In the UK, EU, and US (along with an increasing number of other territories) firms are also prevented from providing certain professional services, including accounting, to any Russian entity (regardless of their sanction status).
We rapidly mobilised a dedicated sanctions taskforce and sub-committee of the Management Board to oversee the firm’s response to the evolving situation in Ukraine, including how we supported our colleagues in Ukraine, the broader Network response, and the exit of our Russian and Belarusian firms. We also had to ensure the firm was compliant with all the new sanctions being placed on Russian entities. The PwC Network decided early on to apply any sanction, anywhere in the world, as though it was applicable in the local territory. For example, sanctions imposed by the UK government would need to be applied to all firms in the network, regardless of whether their home government had applied them.
The UK team has continuously provided support to, and shared our expertise with, smaller network firms, helping them navigate this complex and wide-reaching set of sanctions, for consistency across the global network.
Our internal compliance team also collaborated closely with our client-facing teams who supported clients in similar situations, sharing best practice to reach the best outcome for our firm, our clients, our people and our stakeholders.
“I stand with the people of Ukraine and deplore Russia’s violation of international law and its aggression against Ukraine. I am working with our PwC leadership teams both globally and across Europe to support our people at what is an incredibly difficult time.”
Senior Partner,
PwC
Global network
Maximising the impact and application of the economic sanctions is one way that we continue to positively contribute to our public interest role and goes to the heart of our purpose - how we contribute to society, build trust and solve important problems, while living our core values of Care and Act with Integrity.
Working with stakeholders
A wide range of stakeholders shape our thinking as a business, and benefit from our products and services. We engage with these stakeholders to gain a greater understanding of their challenges and experiences, as well as collaborate with them for deeper insight and mutual benefit. For example, to help fulfil our purpose, we aim to make a constructive contribution to public policy debates, while maintaining a strict policy of political neutrality. Meanwhile, our tax strategy sets out our approach to managing risk and developing good governance in relation to taxation.
Our risk register breaks down the principal risks facing the firm, including those that are externally influenced such as geopolitical issues, and operational issues such as cybersecurity. In response, we work collaboratively with our Risk Governance bodies to ensure our approach to assessing risk is agile, and that our risk culture is able to evolve to adapt to the changing landscape, implementing mitigants that protect our firm, our clients and deliver on our purpose.
View the Risk RegisterLast year, we launched our digital Transparency Report designed to help our stakeholders stay informed about important information relating to our Audit practice and audit-related services, which will be updated for FY22. As the audit profession continues to be under significant scrutiny and given its importance to corporate governance and the functioning of the economy, we consider it critical to continue to share insight into what we do, and how we do it - whether it’s our approach to recruiting, training and rewarding our people, our focus on audit quality, or how we create an inclusive culture - all overseen by robust governance structures. On a firm-wide basis, all staff (including contractors and secondees) and UK Firm partners are required to complete annual mandatory training to reinforce our risk aware and resilient culture. As in FY21, we are proud to continue our 100% completion rate, demonstrating our people’s commitment to managing risk and combating corruption. More information on our training and compliance data can be found in our Integrated Reporting Hub.
Our governance
structures
We are a large partnership managed and governed by four main bodies each with a different role and responsibility. The key matters, and how the firm managed risk, considered in the year by our governance bodies included culture, people, quality, performance, regulation and reputation.
Management board Our executive body responsible for the policies, strategy, direction and management of the UK firm. Read more about the management board.
Supervisory Board Our elected governance body with responsibility for the interests and wellbeing of the wider partnership and the UK firm. Read more about the supervisory board
Public Interest Body Our majority independent governance body responsible for discharging PwC UK’s duties under the Audit Firm Governance Code. Read more about the public interest body
Audit Oversight Body Our Audit Oversight Body is a committee of the Public Interest Body whose purpose it is to oversee the UK firm’s obligations with respect to the pursuit of the Financial Reporting Council’s objectives, outcomes and principles for operational separation of audit practices insofar as they are within the control of the audit practice. Read more about the oversight body
You can hear more from members of our governing bodies in our Transparency Report.
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