According to a report by The Telegraph on 6 March, RSM, which has been hoping to challenge the Big Four (Deloitte, KPMG, PwC and EY) by winning contracts away from them, is itself facing a significant internal challenge.
Five prominent shareholders, apparently holding proxies from nearly 70% of all shareholders, have launched a bid to remove the entire board at the next AGM, scheduled for later this month. This comes hot on the heels of the revelation of a significant error in RSM’s own accounts, where the firm had misstated its results by nearly £10 million over a two-year period.
The firm, owned by current and former partners, was appointed as the auditor for Sports Direct last year and this latest problem comes as the entire industry is trying to cope with the disruption caused by Covid-19. The Telegraph newspaper, which broke the story, also reports that the group of rebels are also wanting to block the appointment of Jill Jones, acting chief operating officer, as chief executive. This follows a sustained period of infighting at RSM, the UK’s seventh largest auditor.
The rebels include Nigel Tristem, former finance director, and David Gwilliam, the former chief executive. According to the FT, a source close to RSM explained that there was significant anger against the board by the so-called rebels who were themselves ousted from the board as recently as January. The source added that the dispute was fuelled by the accounting blunder and internal politics including the board “rigging the CEO selection process”. RSM has said that its election process was “fair, rigorous and transparent” and that the timing of the motion to remove the board was “unfortunate.”
An international spokesperson at RSM responded to IAB on the matter. “We are of course aware of the situation and are continuing to closely monitor it. The appointment of RSM UK’s senior leadership is a matter for them as an independent member firm.
“The UK is a key economy for RSM, and our strong representation and service capabilities are therefore very important to our ability to progress on our vision.
“As a global organisation, our focus remains on supporting our member firms and their clients through the unprecedented times in which we all find ourselves.”