Terms of Reference of the Public Interest Body of PricewaterhouseCoopers LLP (the “Firm”)

These Terms of Reference have been drafted having regard to the requirements of the Audit Firm Governance Code (the “Code”) and other items that the Public Interest Body might reasonably consider. The Terms of Reference will continue to evolve as the Code evolves.

Purpose and Authority

The purpose of the Public Interest Body is to enhance stakeholder confidence in the public interest aspects of the Firm’s activities, through the involvement of Independent Non-Executives. In particular the role of the Independent Non-Executives shall include collectively enhancing the Firm’s performance in meeting the purpose of the Code, which includes promoting audit quality, ensuring that the Firm takes account of the public interest in its decision making, particularly in audit and safeguarding the sustainability and resilience of the audit practice and the Firm as a whole.

Membership

The membership of the Public Interest Body comprises up to eight Independent Non-Executives (at least one of whom has appropriate audit or accounting experience), at least one member from the Firm’s Management Board, and at least one member of the Firm’s Supervisory Board. The membership of the Public Interest Body is as follows:
- Philip Rycroft, Chair (Independent Non-Executive)
- Suzanne Baxter (Independent Non-Executive)
- Rob Perrins (Independent Non-Executive)
- Victoria Raffe (Independent Non-Executive)
- Simon Ager (Chair of the Supervisory Board)
- Marco Amitrano (Senior Partner)
Each Independent Non-Executive shall hold office for a term not exceeding four years and the maximum tenure for any Independent Non-Executive is nine years in total.
The Supervisory Board approves the Independent Non-Executives from candidates nominated by the Senior Partner, following consultation between the Senior Partner and the Chair of the Public Interest Body and thereafter with the Supervisory Board.
The members of the Management Board that sit on the Public Interest Body are chosen by the Senior Partner.
The members of the Supervisory Board that sit on the Public Interest Body are chosen by the elected members of the Supervisory Board.
The membership of the Public Interest Body shall include equal numbers of members of the Management Board and of the Supervisory Board.
The Independent Non-Executives shall be the majority on the Public Interest Body.
Only members of the Public Interest Body have the right to attend Public Interest Body meetings. Other individuals may be invited to attend for part or all of any Public Interest Body meeting, as and when appropriate.
Any Member of the Firm must attend meetings (including meetings of the Independent Non-Executives) if requested to do so by the Public Interest Body.
A majority of the Independent Non-Executives may require any person who is not a Independent Non-Executive to absent themselves from the meeting for the discussion of any specific items.

Chair

The Chair of the Public Interest Body (the Chair) shall be an Independent Non-Executive. The Chair shall from time to time be elected by the members of the Public Interest Body from among the Independent Non-Executives upon the nomination of the Senior Partner after consultation with the members of the Public Interest Body.
The Chair shall be elected on any occasion for a term not exceeding three years or the remaining length of their appointment but may offer themselves for re-election for additional terms. The Chair will continue in office for the term for which they were elected or until they cease to be a member of the Public Interest Body if that takes place earlier.
In the absence of the Chair at a meeting of the Public Interest Body, the members present shall appoint by a simple majority, an Independent Non-Executive in attendance to act as Chair of the meeting. If there is a tied vote, the Chair will be selected by lot from those between whom there is the tie.

Secretary

The Secretary to the Public Interest Body is Philip Patterson, the Head of Secretariat. In the absence of the Secretary, another member of the Secretariat of the Firm may act as Secretary of the Public Interest Body.
The Secretary will ensure that the Public Interest Body receives information and papers in a timely manner to enable full and proper consideration to be given to matters, and will be responsible for maintaining accurate records of meetings.

Quorum

The quorum for a meeting of the Public Interest Body is a majority of the members of the Public Interest Body, provided this also includes a majority of Independent Non-Executives.

Decisions of the PIB

A decision of the Public Interest Body taken by vote at a meeting shall require a simple majority of those present in order to be passed, except where otherwise stated. The chair of any such meeting will have the casting vote.

Frequency of Meetings

The Chair determines a rolling programme of ordinary meetings, which must provide for at least four ordinary meetings in each calendar year.
The Independent Non-Executives shall also meet a separate group to discuss matters relating to their remit.

Notice of Meetings

Meetings of the Public Interest Body will be called by the Secretary at the request of the Chair, with notice of such meetings being provided at the earliest opportunity.
Unless otherwise agreed, notice of each Public Interest Body meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each Public Interest Body member in a timely manner. Supporting papers shall be sent to the Public Interest Body members and other attendees, as appropriate, at the same time. Meetings can be held either remotely or in person (or hybrid).
A special Public Interest Body meeting may be convened by the Chair, and at the request of any two other members of the Public Interest Body, by giving a minimum of two working days notice to all members of the Public Interest Body.

Minutes of Public Interest Body Meetings

The Secretary will minute the proceedings and decisions of all Public Interest Body meetings, including recording the names of those present and in attendance.
Draft minutes of Public Interest Body meetings will be circulated first to the Chair, and then to all other Public Interest Body members for review.
Once approved, minutes will be shared with the Firm’s Management Board and Supervisory Board, unless it would be inappropriate to do so.

Duties, Powers and Responsibilities

The Public Interest Body enables the Firm to fulfil certain responsibilities set out in the Code, a summary of these responsibilities is set out in Annex 1. In carrying out its responsibilities under the Code, the Public Interest Body will take into account insofar as they impact on the public interest aspects of the Firm’s activities, the following:
1. the impact of the Firm’s strategy;
2. the Firm’s policies and procedures for risk management and internal control, which the Independent Non-Executives shall be involved in reviewing;
3. the impact of the Firm’s culture, values and behaviour, the Independent Non-Executives shall be involved in reviewing the effectiveness of the Firm’s systems for the promotion and embedding of an appropriate culture underpinned by sound values and behaviour across the Firm;
4. the Firm’s policies and procedures relating to quality and compliance with regulation;
5. the Firm’s people management policies and procedures;
6. the impact of the Firm’s senior appointments, financial performance and position, operational policies and procedures (including client management processes), and any global network initiatives on the Firm and the audit practice in particular.
7. the Firm’s external public-interest reporting;
8. compliance with the Firm’s Code of Conduct;
9. any other matters that may affect the public interest, including relevant matters relating to the global network; and
10. risks to audit quality; the public interest in the Firm’s activities and how it is taken into account; and risks to the operational and financial resilience of the Firm.
The Public Interest Body may delegate any duties or responsibilities to committees, including any relevant public interest duties or responsibilities which may be ascribed by the Code. A committee may appoint, and further delegate its duties or responsibilities to, a subcommittee.
1. The Public Interest Body delegates to the Audit Oversight Body (a committee of the Public Interest Body) responsibility for oversight of the Firm’s obligations with respect to the pursuit of the FRC’s objectives, outcomes and principles for operational separation of audit practices (as updated from time to time) insofar as they are within the control of the audit practice and to enhance the UK firm’s ability to fulfil certain responsibilities set out in the Code.

Reporting

The Public Interest Body’s principal point of contact with the Firm is the Senior Partner. The Independent Non-Executives shall also have regular contact with the Firm’s Ethics Partner.

Procedure for Dealing with any Fundamental Disagreement

The procedure for dealing with any fundamental disagreement that cannot otherwise be resolved between the Independent Non-Executives and members of the Firm’s management team and/or governance structures is set out in Annex 2.

Approved by the Public Interest Body on: 11 March 2025

Annex 1

Duties and responsibilities of the Independent Non-Executives are set out in the Audit Firm Governance Code (Revised 2022) - an overview is provided below:

The Independent Non-Executives through their involvement collectively enhance shareholder confidence in the public interest aspects of the Firm’s decision making, stakeholder dialogue, and management of reputational risks including those in the Firm’s businesses that are not otherwise effectively addressed by regulation. The Independent Non-Executives shall have oversight of the Firm’s policies and procedures for promoting audit quality, helping the Firm to secure its reputation more broadly including in its non-audit business, and reducing the risk of firm failure.

The Independent Non-Executives have a duty of care to the Firm. The Independent Non-Executives should command the respect of the Firm’s partners and collectively enhance shareholder confidence by virtue of their independence, number, stature, experience and expertise. The Independent Non-Executives should have regular contact with the Firm’s Ethics Partner.

The Independent Non-Executives should be involved in reviewing people management policies and procedures and the effectiveness of the Firm’s risk management and internal control policies and procedures. The Independent Non-Executives should oversee compliance with the Firm’s Code of Conduct.

The Firm should report to the Independent Non-Executives on issues raised under its whistleblowing policies and procedures.

The Independent Non-Executives should have dialogue with audit committees and investors to build their understanding of the user experience of audit and to develop a collective view of the way in which their firm operates in practice.

The Independent Non-Executives should maintain an open dialogue with the regulator and have a duty to alert the regulator in certain circumstances.

Annex 2

Procedure for Dealing with any Fundamental Disagreement (relevant extract from Members’ Agreement dated 1 January 2021)

The Non-Executives have the right to report to the Members a fundamental disagreement (“Fundamental Disagreement”) between them and:
1. the Senior Partner; or
2. the Management Board; or
3. the Supervisory Board
  
  that cannot otherwise be resolved in accordance with the following provisions of this paragraph 25. This right applies to any Non-Executive, whether or not they are also a member of the Public Interest Body.
The majority of the Non-Executives on the Public Interest Body must first agree that there is a Fundamental Disagreement or, where the Non-Executives are on a committee or subcommittee of the Public Interest Body, the majority of the Non-Executives on that committee or subcommittee, having consulted with the Non-Executives on the Public Interest Body, must first agree that there is a Fundamental Disagreement.
The Non-Executives must raise the Fundamental Disagreement with the person or board with whom they fundamentally disagree.
The Non-Executives and the person or board with whom they disagree must meet as soon as reasonably practical and in any event within 15 Working Days of a written request from the Non-Executives to them and must discuss the disagreement and seek to resolve the same.
If the Fundamental Disagreement is not resolved as a result of such meeting, the Non-Executives and the other relevant person or board (unless it is the Senior Partner) must, within five Working Days following such meeting, notify the Senior Partner of the Fundamental Disagreement and of their views on such disagreement. The Non-Executives and the Senior Partner must reasonably co-operate to seek a resolution of the Fundamental Disagreement. The Senior Partner may take such action as in their opinion is reasonably necessary to seek to resolve the Fundamental Disagreement. Any Member must take such steps as the Senior Partner requires to give effect to such action.
If the Fundamental Disagreement is not resolved under paragraph 25.5 above within 15 Working Days of the Senior Partner’s receipt of the notification of the Fundamental Disagreement, the Non-Executives and the other relevant person or board (unless it is the Supervisory Board) must, within five Working Days, notify the Supervisory Board of the Fundamental Disagreement and of their views on such disagreement. The Supervisory Board must meet as soon as reasonably practical, and in any event within 15 Working Days of receipt of the notification, with the parties to the Fundamental Disagreement either separately or together or both or by itself in accordance with arrangements which the Supervisory Board determines.
If the Fundamental Disagreement is not resolved as a result of such meeting or the Fundamental Disagreement is with the Supervisory Board, the Non-Executives or the other relevant person or board may, within 15 Working Days following such meeting, propose to the others in writing that the matter be referred to non-binding mediation and, if such proposal is accepted, the mediator (if not appointed by agreement between the parties) will be nominated by CEDR (or any body that may succeed to, or replace, CEDR from time to time). The fees and expenses of the mediator are borne by the LLP.
If the Fundamental Disagreement is not resolved as a result of such discussion or mediation, the Non-Executives, or those of them who have the Fundamental Disagreement, may, within five Working Days, report the same to the Members together with such recommendations or advice as they reasonably consider appropriate.
Where the Senior Partner, Management Board, Supervisory Board or Members do not within 20 Working Days after the report referred to in paragraph 25.8 above take action which is reasonably likely to resolve the Fundamental Disagreement, or the Fundamental Disagreement is not otherwise resolved within such period, the relevant Non-Executives may resign and may report their resignation publicly in such form as such Non-Executives and the LLP may agree or, in default of agreement within a reasonable time after the expiry of such period of 20 Working Days, not exceeding five Working Days, in such form as such Non-Executives reasonably consider appropriate.

Once a majority of the Non-Executives on the Public Interest Body has agreed that there is a Fundamental Disagreement, or where the Non-Executives are on a committee or subcommittee of the Public Interest Body, and the majority of the Non-Executives on that committee or subcommittee, having consulted with the Non-Executives on the Public Interest Body, has agreed that there is a Fundamental Disagreement in accordance with paragraph 25.2 above:

the LLP must not remove any Non-Executive under the agreement between them and the LLP before the end of their term of office save for serious breach of their obligations or other grounds to terminate that agreement without the need to give notice; and
where the term of office of a Non-Executive expires (and the Non-Executive is not reappointed as a Non-Executive) in the course of the process set out in paragraph 25 above, such process shall nevertheless continue as if, solely for these purposes, the Non-Executive had continued as a Non-Executive.