AFRGA1 S001

Without transparency,there is no trust.

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www.afr.com | Wednesday 28 February 2018

Special Report

Rebuilding corporate trustEdited by Jason Clout: jclout@fairfaxmedia.com.au

In association with KPMG

SOURCE: 2018 EDELMAN TRUST BAROMETER GLOBAL REPORT

Trust in business and change from 2017-18 (% respondents)

The view on business

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Transparencyis pivotal torestoring faith

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Reputation Businessesneed to earn the trustof all stakeholders.

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Mark Eggleton

Humility is comingpost-crisis when itought to be before.Australia Post chair John Stanhope

Continued next page

Business Council of Australia (BCA)chief executive officer JenniferWestacott spent much of last weeklamenting the general air of negativitysurrounding the business sector.

In the pages of The Australia Finan-cial Review, she opined that ‘‘If we wantto bash up on business, we are going tobash our future.’’

One reason Westacott and the BCAfelt the urge to come out fighting forbusiness was to really get on the frontfoot in terms of convincing thenaysayers among Canberra’s minorparties to vote in favour of the Turnbullgovernment’s Enterprise Tax Plan.

On Radio National, Westacott spokeof the hateful rhetoric being used by anumber of people who are trying to cre-ate an impression ‘‘business is some-how not a good force in this country’’.

She suggested it was all part of a left-wing bias in the media ‘‘trying todemonise business as a way of arguingagainst these [corporate] tax cuts. Andit’s a way of saying, well, businessdoesn’t matter.’’

Commenting on the mooted cuts fur-ther she said: ‘‘when I hear people kindof demonising business, demonisingmultinationals, using this careless lan-guage, talking about a gift to this group,it’s just simply not true. It’s confusingthe community, it’s confusing the dis-cussion, it’s not right and we will bevery poorer country for not strengthen-ing our business community, notallowing it to thrive.’’

While the long-term efficacy of cor-porate tax cuts might still be up forsome reasoned debate, part of the cur-rent climate of ‘‘business bashing’’ canbe attributed to a general decline intrust for institutions as a whole.

According to the 2018 Edelman TrustBarometer, there has been a gradualdecline in trust in institutions rangingfrom business to government, mediaand NGOs over the last five years. Thereasons for this erosion are many andvaried, ranging from the abuse of trustin business and government as well asreligious organisations and NGOs.

Alarmingly, Australia registered oneof the steepest declines in trust acrossall institutions globally with that uncer-tainty exacerbated by technologicaldisruption and stagnant wage growth,especially in the private sector. In fact,private sector workers as a wholereceived no real wage rise last year asthe Australian Bureau of StatisticsDecember Wage Price Increase indic-ated annual wage rises at 1.9 per cent,equalling the annual rise in the Con-sumer Price Index.

Yet amid all the gloom, there aresome green shoots especially for busi-ness – the barometer indicates 64 percent of people think business shouldtake the lead on change rather than gov-ernment imposing it. More pertinently,it highlighted that the No.1 job for CEOswas building trust.

Participants at the recent Rebuild-ing Corporate Trust roundtable co-hosted by The Australian FinancialReview and KPMG in Melbournespoke at length about the decline intrust around the world.

According to the chair of the Austra-lian Auditing and Assurance StandardsBoard, Roger Simnett, the decline hasbeen happening for the past 25 years orso right around the world.

Australia Post chairman John Stan-hope agrees that trust is taking a beatingbut wonders whether business is tryingto build trust the wrong way. Whileacknowledging there is more transpar-ency in company reporting procedures,he suggests it’s been more about justify-ing behaviours than building trust.

‘‘I think we pay a lot of lip service tothe idea of caring about all our stake-

holders, not just investors but do wereally? At the end of the day when yousit in the boardroom, are you really talk-ing about the financials or are you reallytalking about all the stakeholders?

‘‘So why is trust being lost? I thinkthere’s not a lot of walking the talk.Humility is coming post-crisis when itought to be before crisis,’’ Stanhope says.

In reference to the banks deciding toget rid of ATM fees in the weeks beforethe announcement of the bankingroyal commission, Stanhope suggeststhey were being a little disingenuous,knowing fully well ‘‘they’re going to getrid of ATMs, and there isn’t going to bea big financial impact anyway.’’

Bank of Queensland board memberKaren Penrose says building trust has tocome from the heart of the organisation.‘‘I passionately believe in CEOs who cantell the story about what the company isdoing and where it’s going in an open,honest and transparent way.’’

KPMG’s national leader, HumanRights and Social Impact, RichardBoele, agrees that organisations need astoryteller who can help all stakehold-ers make sense of company decisions.

‘‘You need to be powerful in yourstorytelling and that requires a set ofnew capabilities. The question is whowill be that sense-maker, change-maker and storyteller? Is that anopportunity for the reinvention of thecorporate affairs role because the head

‘Mum Test’ isbetter thanthe legal test

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Ethics

James Thomson

Continued page S4

Australia Post’s John Stanhope: There isa clear purpose far broader thanmaking money. PHOTO: JESSE MARLOW

Australia Post chairman JohnStanhope sits on six boards and headsfive of them. He’s convinced that ifbusiness wants to win back trust in thecommunity, it must start at the top,with directors and executives.

‘‘We sit in boardrooms and we tendto think about, are we doing thingsright? Which means, are we meetingall the legal obligations we have?’’Stanhope says.

He vividly recalls being the chieffinancial officer of Telstra when thecompany set up companies in the taxhaven of the Cayman Islands. It was allperfectly legal of course, but as thecompanies caught up in the PanamaPapers scandal found, it was also agood example of how doing thingsright does not always mean doing theright thing.

‘‘What ethics is about, and how youget trust, is are we doing the rightthing?’’ Stanhope says. ‘‘In other words,even though we got it right, is it theright thing to do?’’

Stanhope was speaking at aroundtable hosted by The AustralianFinancial Review and KMPG. It broughttogether a fascinating group ofdirectors and experts to address theissue of trust in business – how and

AFRGA1 S002

Your strategy, social and ethical behaviours, and integrity of reporting are key to providing deeper insights and building stakeholder trust.

Our Audit, Assurance & Risk Consulting team can help you with the processes, technologies and assurance to achieve transparency with confidence.

AFRWednesday 28 February 2018The Australian Financial Review | www.afr.com

S2 Special Report Rebuilding corporate trust

Lack of trustdespite greatertransparency

Andrew Yates says firms must deliver information quicker. PHOTO: JESSE MARLOW

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Roundtable Distrust isrife across the globe –how can this be fixed?

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Mark Eggleton

At a time when technology and thegrowth of big data has probably madeglobal business and government moretransparent, it’s interesting to notetrust in business, government and evennon-government organisations contin-ues to wane.

The recently released Edelman TrustBarometer for 2018 indicates a polarisedglobal community riven with distrust aspeople disagree over the fake news phe-nomenon as well as the belief amongmany that inequality is growing at atime when global markets have soared.

For companies, it’s an interestingconundrum at a time when they aresharing more information with all oftheir stakeholders. They are goingbeyond the financials and sharingreports on everything from diversity orremuneration to ESG issues andhuman rights issues.

How this trust broke down andwhether it can be swiftly rebuilt weresome of the questions a number ofspeakers addressed at the recentRebuilding Corporate Trust round-table co-hosted by The Australian Fin-ancial Review and KPMG.

Discussing the issue of rebuildingtrust were the chairman of AustraliaPost John Stanhope, chief executiveofficer of the Australian Council ofSuperannuation Investors Louise Dav-idson, chairman and CEO AustralianAuditing and Assurance StandardsBoard Roger Simnett, national leader,external audit, KPMG Australia EileenHoggett, director Lendlease and Wool-worths Michael Ullmer, director ofBOQ Karen Penrose, national leader,human rights and social impact,KPMG Australia Richard Boele andKPMG Australia’s national managingpartner, audit, assurance and risk con-sulting Andrew Yates.

The discussion was moderated byThe Australian Financial Review’s com-

panies and markets editor, JamesThomson, and an excerpt featuresbelow ...

On the breakdown of trustRoger Simnett:I think that there has been a gradual

decline [in trust] around the world. Youcan look at Trump, who was elected onthe basis of ‘‘draining the swamp’’.Again, that reflected a lot of his rhetoricbut a lot of that was a lack of trust inpolitics that we have at the moment andeverybody thinking that people havetheir noses, their snouts in the trough.

Michael Ullmer:Back in the 1980s, we had broad

acceptance of the globalisation of theeconomy. It was driving strong eco-nomic returns, driving strong employ-ment growth and big business wasprobably pretty well regarded. We thenhad the [sharemarket] collapse at theend of the ‘80s that led into a real estatemarket collapse in the early ‘90s. A lotof people got hurt.

The response from companies wasto go through probably a decade of veryhard cost reduction. Cost reductionand euphemisms like right-sizing andstreamlining were all code for peoplelosing their jobs. That then morphedinto offshoring and outsourcing. Whileoffshoring actually delivered hugebenefits to developing economies andcreated meaningful employment, whatit meant back in Australia and otherWestern countries was further loss ofwork by a whole group of people whowere displaced. Then that’s been fol-lowed by innovation and technology,which has seen a further wave of peo-ple at work being displaced. That’s cre-ated this significant group of peoplewho feel all of this has left them behind.

Rebuilding trustEileen Hoggett:What’s been really important in

working through trust issues is theimportance of transparency, owningour mistakes and acting swiftly. Own-ing your mistakes helps to build trust.

On better reporting or integrated report-ing:

John Stanhope:

My accounting 101 teacher told me,‘‘You’ve got to make sure that you pro-duce reports that are useful for theuser’’. As it turned out, that’s a prettygood principle. Somewhere along theline we have lost our way and I thinkintegrated reporting is trying to bringus back to that.

At the end of the day ... this informa-tion has got to be useful for the cus-tomer. Integrated reporting is anattempt, and it’s a successful attempt tobring back utility for the user.

Andrew Yates on how integratedreporting really drives a better under-standing of strategy:

I think the catalyst to drive this integ-rated reporting quicker and the har-nessing of value quicker is theaccessing of data. Historically, every-one has had good financial data, had agood general ledger and things havebeen reconciled and people could go inand extract financial data, but data of

other systems across big organisationshas been typically pretty poor. As datagets better and there is more hygienearound that, there is so much moreinformation companies can access andshare quickly to provide much moretransparent and relevant information.

Eileen Hoggett on the auditor’s role inintegrating reporting

Companies still have a way to go tohave the same governance and con-trols and process over non-financialinformation. Auditors are in a veryunique position because they’re in themost privileged position, because wespend time within an organisation talk-ing to people at all levels right acrossthe business. Having an independentparty with an independent mind beingable to give boards their view on thereporting that they tend to put in themarketplace, and as importantly astheir comments on what’s being repor-ted, it’s what’s not being reported.

Transparency pivotalto restoring faith

From previous page

of customer is going to advocate forcustomer, the head of HR is going toadvocate for employees, so who withinthat executive structure is actually ableto hold all the voices and to be able tomake sense of all those voices,’’ Boeleasks.

One reason corporate affairs mightbe suited to being the real voice of anorganisation is they can bring all thestakeholder groups together. Moreover,he says it is not just employees, share-holders, customers and suppliers butsub-groups within those groupsbecause those groups are often the mostvulnerable when it comes to ‘‘your busi-ness decisions and their impact’’.

‘‘They are your early warning sys-tem, your canary in the coalmine and ifyou can listen to those vulnerable sub-groups, they’re going to give you areally strong insight on what’s notworking that may become generalisedacross your organisation.’’

Prominent director Michael Ullmerwho sits on the boards of Woolworthsand Lend Lease agrees business needsto better engage with the communityand that probably means less of a reli-ance on industry associations.

He suggests in this new more openworld of business, organisations needto better communicate with the peoplewho feel they have been left behindwhether it be through technologicaldisruption, globalisation or wage stag-nation. He says business leaders suchas CEOs as well as board membershave to be prepared to engage in debatewith the community.

CEO of the Australia Council ofSuperannuation Investors, Louise Dav-idson says super funds tend to be long-term investors and they want to seecompanies be more authentic in theiractions and intentions.

Reflecting on where have thingsgone wrong, she says one of the keythings companies are lacking is a senseof authenticity. ‘‘Business needs to havea sense of purpose and it’s not just tomake money. It needs to understandit’s part of the broader community andto genuinely understand who thestakeholders are and what they need orwant of you,’’ Davidson says.

And while she applauds organisa-tions such as Qantas taking a frontlinerole in the marriage equality debateand AGL addressing climate change,the one piece that is still missing ‘‘isarticulation of a narrative aroundwhat’s being done and why’’.

‘‘Corporates need to effectively telltheir stories and come up with strongernarratives that people understand out-side of their annual reports – they haveto find another way.’’

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AFR Wednesday 28 February 2018www.afr.com | The Australian Financial Review

S3Special ReportRebuilding corporate trust

Bank of Queensland’s Karen Penrose believes that trust is remade on every encounter with the customer. PHOTO: JESSE MARLOW

Customers first amongthe many stakeholders

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Relationships Clientexperience a key driverof shareholder value.

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James Dunn

Empathy with thecustomer should bepart of a business’sbroader purpose.Michael Ullmer, director atLendlease and Woolworths

The essence of business never changes:engaging the customer, every day.

This is not just the source of revenue:the customer experience – and per-spective – remains the ‘‘early warningsystem’’ to show if things are not work-ing, says Karen Penrose, director atBank of Queensland. ‘‘Trust is remadeon every customer encounter,’’ she says.

But these days, there are other stake-holders that business must engage:governments, regulators, employees,suppliers, investors, funders and thegeneral public. ‘‘In the modern envir-onment, questions get raised [about abusiness] by a whole host of interested,invested individuals,’’ she says.

Even with this greater scrutiny, keep-ing the customer at the heart of thebusiness helps the engagement withthe wider array of stakeholders, saysMichael Ullmer, director at Lendleaseand Woolworths.

‘‘There’s research that shows that thekey impacts on shareholder value are

driven by the views of customers, gov-ernment/regulators and employees, inthat order. There’s something like 1 mil-lion feedback surveys a year that aredone as part of the Woolworths’ pro-gram in terms of listening to the cus-tomer, and we put the voice of thecustomer into our integrated reportnow in terms of targets, and measuringperformance against that.’’

What Woolworths finds, he says, isthat while the company’s promise of

good food at reasonable prices is a keyconcern of customers, the feedbackalso tells it that customers are verymindful of issues such as fairness tosuppliers, the environment, use ofplastic bags, animal welfare, and foodwaste. ‘‘There’s a whole lot of thingsthat some people would say, ‘well,they’re nice to have’, but they’re actu-ally intrinsically important to custom-ers – to the most important driver of

our relationship, which is what drivesshareholder value,’’ says Ullmer.

The relationships with stakeholdersare all part of ‘‘the story’’ that an organ-isation tells, says Richard Boele, part-ner and human rights and socialimpact leader at KPMG Australia – andthat is the source of what its customersexpect when they ‘‘come into the shop’’.

There are two main ways that anorganisation can maximise the value ofits customer relationship: to hear whatthey are saying, and to have empathywith them. The first, says Penrose,depends on ‘‘walking the floor’’. Thatcould be literally, which many execut-ives and directors struggle to do: or atone remove, through regular commu-nication with the people who deal withcustomers on the floor on a day-to-daybasis, or who deal with the customerfeedback function – for example, socialmedia.

The second is more difficult, becauseit requires that conscious effort. ForUllmer, it means having empathy withthe customer, which can sound irra-tional when cast against what seems arational business decision.

He says empathy with the customershould be part of a business’s broaderpurpose – to show, ‘‘this is what we dofor our customers, for society, for ouremployees and our shareholders’’.

Social media has givencommunities a voice

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Digitalisation Boardscannot afford to ignorewider public opinion.

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James Dunn

The challengesaround loss of trustare not newchallenges.Richard Boele, KPMG Australia

‘‘A lie can travel halfway around theworld while the truth is putting on itsshoes,’’ as Mark Twain said, but he didnot envisage social media: ‘‘halfway’’ isunderstating it. A lie – or at least a badimpression – can get fully around theworld, in an instant.

That is the nightmare situation forcompanies and organisations in thesocial media age.

‘‘It’s so much easier in today’s envir-onment to see and hear the actions thatcan lead to a loss of trust,’’ says KarenPenrose, director at Bank of Queens-land. ‘‘Humans love to communicate,and they now have a huge range ofglobal, electronic communication net-works: Google, Facebook, WeChat,Twitter etc. That gives the communitya voice that’s both a local and a globalplatform, and the reality of that forbusinesses, directors and managers, isthat trust is so much more readily lost.’’

But the challenges posed by socialmedia are not new, argues John Stan-hope, chairman of Australia Post andformer chief financial officer at Telstra.‘‘Social media is certainly a mediumthat allows messages to be spread a hellof a lot faster, but what we have to bealert to is that it then changes com-munity expectations quicker. Beforesocial media was around, communityexpectations were always changing,but not this fast,’’ he says.

Richard Boele, partner and humanrights and social impact leader atKPMG Australia, agrees. ‘‘We’ve beenhere before: the challenges around lossof trust are not new challenges. I wasinvolved in the mining industry’sresponse to the global loss of trust inthe mining sector, in the 1990s, whichculminated in the MMSD (Mining, Min-erals and Sustainable Development)Report, which was published in 2002.But social media is raising the intensityof these challenges.’’

Boele says companies and organisa-tions have ‘‘much more transparency’’these days about behaviours andimpacts on people and the environmentand other stakeholders – but the otherside of this coin is the speed at whichsocial media can generate reaction.

‘‘It’s faster, nastier, some of it’s notright, not founded in fact, but it’s at

such a speed now that stakeholders arequestioning quicker and coming to adistrust with you quicker. Social mediais the enabler [for this].’’

The challenge for boards is that,somewhere in the social media mael-strom, there is the voice of the cus-tomer – to which companies havealways had to listen. ‘‘What socialmedia is delivering is the capacity forthe individual in the street to have avoice, and they can have a voice directlyat a board table effectively, or in a gov-ernment office or the media,’’ saysMichael Ullmer, director at Lendleaseand Woolworths.

‘‘That was not available to them pre-viously, unless they were out on thestreets marching with placards orwhatever, and then they were relianton what sort of coverage they weregoing to get. Boards need to ensure thatthey’re getting feeds coming to themaround what customers are saying –and taking an interest in that.’’

In the old days, he says, it was aroundcustomer complaints coming in viatelephone: large numbers of whichwere actually a very early warning sig-

nal about a systemic problem in theorganisation. ‘‘Today with socialmedia, you just get that so much moreimmediately. Boards ignore the voiceof the customer at their peril.’’

Penrose says it’s ‘‘critically import-ant’’ that the organisation has an openculture, to be able to feed-in the mes-sages that are coming in from socialmedia – and that the organisation truly‘‘hears’’ these messages, rather thanthinks in terms of ‘‘managing’’ them.

‘‘Once you’ve heard it, you can workout how it fits in the framework andwhat’s material to the business. Thenyou can communicate back as to whatdecision you’re making, but with areally strong customer lens,’’ she says.

Social media is not just a channelthrough which messages come in tothe organisation, says Penrose, it alsocreates a ‘‘much broader opportunityto get closer to the customer’’. ‘‘Man-agement teams have to work hard atfinding ways to be at the front line andmaking sure that they’re really hearingthose messages,’’ she says.

AFRGA1 S004

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AFRWednesday 28 February 2018The Australian Financial Review | www.afr.com

S4 Special Report Rebuilding corporate trust

‘Mum Test’ is betterthan the legal test

Doing things rightdoes not alwaysmean doing theright thing.John Stanhope, Australia Post boss

From page S1

why it’s been damaged, and perhapsmost importantly, how it can berestored.

Stanhope’s cental point – widelybacked by the group – was that whilecompanies have never shared as muchinformation as they do today,transparency alone is not enough.

Business must see that itsstakeholders extend beyond its

shareholders and even beyond itscustomers.

‘‘I think we need to understand thatthere is a clear purpose far broaderthan making money. It’s the means bywhich you make it,’’ Stanhope said.

Another simple tool for managersand directors came from Woolworthsand Lend Lease director MichaelUllmer. Call it the Mum Test.

Ullmer, a former executive atNational Australia Bank, recalls beingcalled into a meeting to help his teambreak an impasse over the treatment ofa group of customers.

‘‘I asked them to take me throughwhat was the sort of issue we’re dealing

with, and they took me to a very specificexample,’’ Ullmer remembers.

‘‘I turned to the most senior lawyer inthe room, and I said, ‘So if this was yourmother, what would you think weshould do?’ He looked at me and to hiscredit he said, ‘Well, we should

probably put her back to the positionshe was in before we first lent hermoney in this particular circumstance.’I said, ‘That sounds like a really goodidea. Our motto is to do the right thing.That sounds like doing the right thingto me. Why don’t we do that?’’’

The lawyers disagreed, but Ullmerheld his ground. Using that central casestudy, the team drew up a set ofprinciples to judge other cases by.

Itwasnot just therightthing todo, itwasthesmartthing. ‘‘Thatsavedustensofmillionsof dollars,becauseotherorganisationsdidn’t lookatthatapproachina similar issue,’’hesaid.‘‘Theyranit through thecourtstwoor

threeyears, they hadmassiveimpactstotheirreputationand theirsocial licence,andthentheyended upcoughingupallthemoneyplus thelegal fees.

‘‘This thing is a vicious cycle and it’ssomething that really big business hasjust got to be more upfront about insaying, ‘This is part of our broaderpurpose, what we do to society andwhat we do for our customers, what wedo for our employees and how we drivevalue for our shareholders.’’’

Judging from those around the table,the state of the corporate sector’srelationship with the community doesweigh heavily. The solution might besimpler than it seems.

Roger Simnett and Eileen Hoggett at The Australian Financial Review-KPMG round table lunch in Melbourne. PHOTO: JESSE MARLOW

Taking a standelevates CEOsin public’s eyes

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Leadership Businessmust get more vocalon societal issues.

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James Dunn

Business needs toshow that itspurpose is not just tomake money.Louise Davidson, Australian Councilof Superannuation Investors

While in some respects the EdelmanTrust Barometer 2018 made for gloomyreading for Australian business – Aus-tralia’s trust in business sits at 45 percent in 2018, down from 48 per cent in2017 and below the global average of52 per cent – there was one piece ofunambiguously good news.

The Australian public has becomemore trusting of chief executivesbecause they have been taking a publicstance on societal issues they careabout. Trust in CEOs has jumped to39 points versus 26 points in the TrustBarometer last year, on the back ofhigh-profile positions such as QantasCEO Alan Joyce supporting marriageequality and AGL CEO Andy Veseypointing to the company’s post-coalpower generation future.

In 2017 the trust survey showed thatthe public wanted business to becomemore involved in social issues, and cor-porate Australia responded.

The Qantas/AGL examples showwhat business has ‘‘got to do going for-ward’’, says Michael Ullmer, director atLendlease and Woolworths. ‘‘Business

has got to be prepared to get out thereand get engaged in the debate, anddemonstrate to the community ourvalue, demonstrate that we believe thatwe have a broader social purpose, andthat that is an intrinsic part of drivingsustainable shareholder value,’’ he says.

Louise Davidson, CEO of the Austra-lian Council of SuperannuationInvestors (ACSI), says ACSI’s members– which hold large stakes in thenation’s major listed companies –‘‘really want to see business taking alonger-term perspective on a lot ofthese issues.

‘‘If we reflect on where have thingsgone wrong [in the area of corporatetrust], one of the things that stands outto me that is lacking is a sense ofauthenticity. It’s really important forcompanies to be authentic in theirintentions and in their actions, and intheir sense of purpose. Business needsto show that its purpose is not just tomake money, business is part of thebroad community, and business genu-inely understands who its stakeholdersare, and what they want of you,’’ David-son says.

John Stanhope, chairman of Austra-lia Post and former chief financialofficer at Telstra, says the key to regain-ing trust is that business needs to showa genuine shift from ‘‘doing thingsright, to doing the right thing’’ – whichis not just a semantic tweak, but a fun-damental mindset change.

Every business person has to take onthis challenge, says Stanhope. ‘‘On all ofthe boards I am on, at the end of everyboard meeting I’m going to say, ‘OK,let’s check that we’ve done things right,so everything’s within the legal bound-aries, but let’s also ask ourselves a ques-tion – in all the decisions we made, arewe doing the right thing?’’’

This is the penny that needs to drop,says Stanhope. ‘‘Every business needsto make money, to stay in business, butwe need to understand that there is aclear purpose far broader than makingmoney: it’s the means by which youmake it. We continue to think that say-ing more about what we’re doing isgoing to win back the trust. But it’s

about how you go about your business[that will do that],’’ he says.

‘‘Owning’’ mistakes is also critical,says Eileen Hoggett, national external

audit leader at KPMG. ‘‘I’ve been in thisrole for just over four months, and inthat time we’ve had [former ASIC chair-man] Greg Medcraft talking about the‘appalling’ quality of corporate audits inAustralia, within KPMG we’ve hadissues with our South African practice,we’ve had issues in the US with some ofour partners with the Public CompanyAccounting Oversight Board [PCAOB].

‘‘What’s been really important inworking through those issues at theglobal level but also here in Australiawith our clients is the importance oftransparency and the importance ofowning our mistakes, acting swiftly. Ifyou own your mistakes I think thathelps build trust,’’ says Hoggett.