• Register
Return to: Home > Comments > An open letter to the Senior Partners of the ‘Big Four’

An open letter to the Senior Partners of the ‘Big Four’

“The necessary and sufficient conditions for legitimate capitalism.”

Dear Senior Partners (of Deloitte, EY, PwC & KPMG)

I write as the Chair of the Maturity Institute having noted that you have not responded, at the request of the Editor of The Accountant, to his recent analysis and review of our Preliminary Report on your partnership behaviours and practices. I set out here why we believe our report puts your organizations at the very centre of the debate on the future of capitalism.

Profitability and shareholder returns are just two among the many necessary conditions for a capitalist system to work; yet neither afford any intrinsic legitimacy. Capitalism is now under unprecedented pressure to reassert its legitimacy for the simple reason that the world is only just beginning to wake up to the obvious fact that we all inhabit the same planet; we are all part of a whole system, by default, not design. It is time that we designed a better version of capitalism.

We have witnessed how profitability and shareholder pressure, in the hands of those with narrow or vested interests, can corrupt the entire system. It makes sense, therefore, that the only sufficient condition for a legitimate, coherent and socially cohesive form of global capitalism is to measure how much it benefits everyone.

The Maturity Institute was born in 2012 with this single purpose – maximising the value of people to maximise the value for society. We have developed a single measure that combines the best of profitability, shareholder returns, company valuation and societal benefits: we call it Total Stakeholder Value (TSV). Our Report identifies that your organizations score too low on this scale to perform the very important, professional duties and responsibilities that are needed for legitimate capitalism.

Despite its multitude of good works and benefits for many, capitalism has always had to patch up its worst inclinations with other, bureaucratic systems of legal rules and regulations, accurate accounting and auditing for assurance. All of these systems have to work in concert and harmony and they can only operate effectively if they continue to reflect society’s changing values, principles and ethical codes. This is why the demand for integrated reports has arisen. This is where, we believe, the accounting and auditing professions are failing.

Our Report is based on significant evidence of audit failures going back to the era of Enron and the collapse of Arthur Andersen. This not only indicates your own failings and heightened risks but, on occasions, you have strayed into illegal territory. This totally undermines trust in the entire system and begs the question whose interests come first? Your own professional bodies also appear reluctant to admit that such practices breach their ethical codes. Thereby losing sight of their connection with, and obligations to, society at large.

If you sincerely believe that your behaviour constitutes legitimate capitalism, and that you can square your own circle of profitability with TSV, then we would ask you to publicly present your case and respond accordingly to The Accountant. Alternatively, we invite you to sign up to the Maturity Institute’s professional standard of Total Stakeholder Value, today.

Yours faithfully,

Paul Kearns
Chair
Maturity Institute
paul.kearns@maturityinstitute.com

Top Content

    Time pressure: Facing up to mental health

    In an ‘always on’ culture, it is becoming increasingly difficult to manage a healthy work-life balance. While companies are beginning to address this problem by introducing different support systems, Joe Pickard finds more could be done to ensure the wellbeing of the professions workforce.

    read more

    Venezuela: the race for the dollar

    With a new currency following hyperinflation, large sections of the population emigrating to neighbouring countries, an economy on the brink of collapse and no apparent solution coming from the government, Jonathan Minter finds a profession struggling to stay afloat in Venezuela.

    read more

    Brazil: transparency and control

    Brazilian accountants have an optimistic view of the impact of more-regular reporting and the implications of audit controversies for the profession. Paul Golden reports.

    read more

    Argentina: looking for a clearer view

    The Argentine accounting profession continues to grapple with the impacts of a weak economy and a culture of financial corruption. Paul Golden takes a closer look.

    read more

    Blockchain: adapting to disruptive tech

    In the relatively few years since digital currencies first began using blockchain technology, the array of potential applications has grown significantly – and continues to expand. Dan Balla, Matthew Schell and Dave Uhryniak from Crowe look at how it impacts accountancy.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.