Too bad I didn't hear about this sooner or I totally would have tried to crash this party.
Freshly christened KPMG Global Chairman and still KPMG US CEO and Chairman John Veihmeyer schooled the kids at University of Richmond’s Robins School of Business this week, and he wasn't at all afraid to say the L word.
Instead of pretending like Scott London never happened, he talked about how KPMG tried to get ahead of the news and make sure its staff knew the firm wasn't simply going to stick their heads in the sand and hope no one noticed.
Veihmeyer spoke about the firm’s reaction in the context of a discussion about how leaders often face choices with no clear, good outcome.
Veihmeyer said he made the decision to fire London on the day — a Friday afternoon — he learned the partner was under federal investigation.
The following Monday, Veihmeyer told the firm’s leadership team not to circle the wagons, but to put out a public announcement about the investigation. KPMG also withdrew as the accounting firm for the two companies that had been compromised.
“What you are really deciding is the best of the alternatives that are out there, and not necessarily a great outcome,” Veihmeyer said. “You have got to get comfortable making decisions that may just be the best bad option that you have available to you at the moment.”
When London was charged that same week, Veihmeyer said he had copies of the criminal complaint emailed to every employee with the message, “This is not who we are.”
“I said, ‘This is a teaching moment in our firm,’ ” he said.
“The measure of an organization is not whether you have somebody do something that is inconsistent with your values,” he said. “The measure of an organization is what you do when you find out about it.”
If you recall, an anonymous KPMG insider wrote a piece for us last year just after the Scott hit the fan and talked about how that very response from the firm felt like just what he wanted from the firm:
The most interesting part of the saga thus far has been the internal PR. Unlike what many people might expect in terms of massive damage control it has been simple and levelheaded. We had two short articles on our internal site which echoed the statements made public about the clients we were resigning from and our intentions to bring legal action against Mr. London.Beyond that, there has only been one other communication and to me it was one of the simplest and most powerful items I’ve seen come across the email in response to a firm event. Our chairman [John Veihmeyer] sent a simple email, just a few paragraphs, not even on the normal firm letterhead with his picture. Attached to the email was a copy of the complaint. In simple terms, the email said, “Everyone read this complaint. Read what this guy did. Know that we don’t stand for it and know that we won’t tolerate it.” No BS, no fluff and no leaving it up to us to read the complaint on Going Concern. I’ve had a chance to have some candid conversations with John Veihmeyer before and this email reflected those. Pundits can pick it apart but for me it was the kind of response I wanted from my firm.