A small group of Grant Thornton U.K. partners must have been grinning from ear to ear on Oct. 15 after hearing the news that Sacha Romanovitch has decided not to seek a second term as the firm’s CEO.
A new CEO is expected to be appointed before the end of 2018 following an election process in accordance with the firm’s membership agreement, a news release stated.
You might recall a report that surfaced last month which indicated that an anonymous group of Grant Thornton partners claimed in a memo that Romanovitch is pursuing a “socialist agenda” and has instilled a “culture of fear” at the firm where there are severe repercussions for speaking out.
The anonymous memo, which was sent to several media outlets and said it represented the views of 15 partners or directors at Grant Thornton, also mentioned that the firm is “out of control” and has “no focus on profitability.”
Three other partners, who spoke to the Financial Times anonymously and claimed they had nothing to do with the memo, said they “sympathized with some of the grievances it contained—including the criticism of the firm’s recent financial performance, its heavy focus on marketing and branding over profits, and the leadership team’s heavy-handed response to recent criticism.”
According to FT, Grant Thornton’s profits before tax fell 12% to £72 million in the 12 months after Romanovitch took over, although they rose 8% to £78 million in the following year, which ended in June 2017.
Romanovitch became the first female chief executive of a major U.K. accounting firm in late 2014. Shortly after taking over as Grant Thornton U.K. CEO, she restructured the firm so that some of its profits are shared with all staff rather than just its partners, according to FT. She also repositioned the firm to focus on “profits with purpose,” which meant dropping unsavory clients in an attempt to grow sustainably.
In a statement on Monday, she said:
“It has been a privilege and an honour to lead this Firm. I am proud of what we have achieved in the market, with our people and with our clients, breaking the mould in so many ways. We have attracted so many talented people and great clients to our firm due to our purpose and what we stand for.
“As we enter the next phase of our plans, following discussions with Grant Thornton’s Board, we have agreed that the time is right for a new CEO to take the firm forward. I will be working to support a smooth transition to our next CEO, focusing on continuing to deliver sustainable value for our clients through our diverse and talented team.”
Ed Warner, chair of the Partnership Oversight Board at Grant Thornton U.K., released the following statement:
“In Sacha’s four years leading Grant Thornton her focus has enabled the Firm to establish a distinctive position in the market. She has been an inspiring CEO attracting great people to our Firm and what we stand for. Crucially, Sacha has established a platform which will drive sustainable and profitable growth.”
“Following discussions with Sacha, the Board has agreed that a new CEO is the logical next step to create long term sustainable profits for the Firm. We are grateful for the innovative and inspiring work Sacha has done and will work with her to support the newly elected CEO and ensure a smooth transition.”
Romanovitch picked a great time to get the hell out of Dodge as one of Grant Thornton’s audit clients, Patisserie Holdings, owner of British café chain Patisserie Valerie, is embroiled in a massive accounting scandal.
In addition, Grant Thornton felt the wrath of the Financial Reporting Council in late August, having to shell out £3 million for “misconduct” relating to its audits of Vimto-maker Nichols and the University of Salford, after a partner joined the companies’ audit committees despite being employed to provide consulting services, creating “serious self-interest threats.”