EY’s Janet Truncale: Project Everest survivor with a mountain to climb

Shortly after Janet Truncale was picked as the next global chief executive at EY, she dialled in to a video call with executives in the US, appearing alongside two of the people she had beaten in the race and the head of EY’s US business, who had pushed for another candidate.

The call with fellow members of EY’s US executive committee on Wednesday was all smiles and congratulations, according to people familiar with how it went — a demonstration of bonhomie among rivals at a firm whose 13,000 partners are desperate to move on from a period of infighting.

But Truncale, the first woman to become global chief of a Big Four firm, faces a formidable challenge in uniting the 395,000-person group, and rivals Deloitte, PwC and KPMG are watching keenly in the hope of taking advantage of EY’s turmoil.

It is just seven months since the acrimonious collapse of a plan to spin off EY’s consulting and tax advice business from its historic accounting operations, dubbed Project Everest. Outgoing global boss Carmine Di Sibio hoped to create a blueprint for the rest of the Big Four but his plan was blocked by opposition from the US executive committee.

The proponents of a split, including Di Sibio, have not been shaken in their view that it remains a commercial necessity, arguing that EY’s consulting business is held back by conflict-of-interest rules that prevent it from working with the firm’s audit clients, who include the world’s largest tech companies.

Opponents are no less vehement that a split risks weakening the audit business.

The question will rear its head again quickly as Truncale picks her executive team and works on a new strategy, before formally taking over in July next year. Alternatives, such as an operational separation of the two sides of the business or other kinds of transaction, are already being examined by internal working groups for the new leadership to consider, people familiar with the situation say.

“Healing is absolutely essential,” said Laura Empson, a professor specialising in the management of professional service firms at the University of London’s Bayes Business School. “But it shouldn’t take too long.”

Healing is absolutely essential, but it shouldn’t take too long

At first blush, Truncale is not the break from the past that might have been expected after Everest’s collapse, which prompted Di Sibio to retire a year earlier than planned. Although she was not a member of the global leadership that pushed the project, she had been a close ally of Di Sibio in a US leadership team that was often more sceptical.

Her path to the top, like his, came through EY’s financial services organisation, which provides auditing and consulting services for clients in banking and related industries. She joined EY as an intern 30 years ago, and was quickly marked out for leadership roles after distinguishing herself with an ability to build strong relationships with clients. These have included Nasdaq, for whom she was the coordinating partner for several years, including through its initial public offering in 2002.

For the past three years, Truncale has run EY’s financial services organisation in the Americas, a position Di Sibio once held, and he advocated strongly for her to run for his job even when she was not sure earlier this year.

“Am I the right leader for the firm at the right time?” Truncale asked herself, according to one longtime friend, before concluding: “I can build trust, that’s my fastball, and that’s what the firm needs right now.”

Julie Boland, head of EY’s US business, was one of several members of the global executive committee to favour the candidacy of Jad Shimaly, who runs the firm in Canada, according to people familiar with internal discussions, but they were outgunned at the selection meeting in London by allies of Di Sibio.

Although the US accounts for about 40 per cent of EY’s nearly $50bn in annual revenues, Boland was just one vote among 18 — a source of tension between the US and global leaderships over several years.

Part of Truncale’s appeal, these people said, is a down-to-earth persona that has won her an intensely loyal following in the financial services organisation, which numbers 14,000 people.

She was an advocate of “bringing your whole self to work” years before that became workplace orthodoxy.

“My clients know that if anything’s important they can reach me on my BlackBerry,” she told Working Mother magazine in 2006, when her three children were all under the age of 10 and she was working four days a week. “They also know my children’s schedules, so when I’m taking Noah to the gym, they won’t call me.”

Now Truncale is an empty nester, with two children following her into accountancy and a third working as an engineer. Outside EY, she has taken on the chairmanship of Women’s World Banking, a non-profit organisation that promotes financial inclusion for women around the world.

Yet she has occasionally chafed at the “first woman to . . . ” label, including when she got the top job in the Americas financial services organisation. “She didn’t want to go round saying it, because that wasn’t why she got the job,” her longtime friend said. “But then the women in our practice said we need to hear it, that we have just broken a glass ceiling. It’s not lost on her that it’s a big deal.”

Many EY executives, partners and staff have been buoyed by the “first woman to . . . ” headlines that followed her selection this week, as a sign of EY presenting a fresh face to the world.

Wednesday’s video call — in which Boland, Truncale, Shimaly and another unsuccessful candidate, Raj Sharma, vice chair of the Americas consulting business, appeared together — also points to some goodwill at the outset of her leadership. Even opponents of Di Sibio and Everest say she has a window to heal divisions.

“Partners are watching,” one senior EY figure said, “and partners don’t want this to continue.”