Big Four auditor KPMG has appointed the former chief financial officer of Dutch bank ABN Amro one of three new non-executive directors who will form a committee charged with improving the firm’s governance and transparency – and confidence in its audit quality.
Tom de Swaan joins Sir Steve Robson, a former second permanent secretary at HM Treasury, and Dr Alfred Tacke, former director general of the Ministry of Economics in Berlin who remains there as a member of its supervisory committee, in joining the firm as big questions over the audit industry’s conduct abound.
De Swaan was ABN Amro’s CFO and a member the managing board from 1999 to 2006. The now-infamous failed 2007 merger of the bank with Royal Bank of Scotland, Fortis and Santander ended with it being nationalised a year later.
De Swaan is currently a member of the boards of Zurich Financial Services and GlaxoSmithKline and chairman of Glaxo’s audit committee, the supervisory boards of Royal DSM and Royal Ahold and the chairman of Van Lanschot Bankiers. Previously, he was a member of the Basel Committee on Banking Supervision from 1991 to 1996, serving as its chairman from 1997 to 1998, and a non-executive director on the board of the UK’s Financial Services Authority between 2001 and 2006.
The trio forms the firm’s public interest committee against the backdrop of the House of Lords investigation of the role of the audit industry in the financial crisis. KPMG was also subject this year to investigations by the FRC over its audit of BAE Systems and was found to have signed off some audits for other clients before all required work had been completed on them.
It said the appointments were a response to the Financial Reporting Council’s (FRC) report, The Audit Firm Governance Code, meant to improve governance and transparency among the major auditors. The new committee will work alongside its existing internal sub-committee for quality and risk, which it says has a similar remit. De Swaan, Robson and Tacke will be responsible for “overseeing the public interest aspects of the decision making of KPMG Europe” and its related entities, including the management of reputational risk.
“We hope the investor community will respond positively as we seek to support the professional and ethical way in which we manage our businesses,” said KPMG of the appointments. “We believe that building even stronger two-way relationships with the major investor groups is important to support additional public confidence in financial reporting and governance.”
It added: “Acting in the public interest in this context involves having regard to the legitimate interests of clients, government, financial institutions, employers, employees, investors, the business and financial community and others who rely upon the objectivity and integrity of the accounting profession.
“These are significant new appointments which we believe will provide a strong additional benchmark against which to assess the governance and risk management of our operations.”
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