The EY division presents a classic challenge… from those of EY

Carmine di Sibio, presidente y CEO de EY.

Retired partners, who cannot vote, complain about what it means for their pensions and the future of the company

EY’s split into two businesses – a consulting and an audit – is a master class in complexity. To begin with, it will only take place if partners in some 75 countries agree. But there are also others with strong opinions and an interest in the outcome. Retired EY partners, who cannot vote, complain about what the split means for their pensions and the future of the company, according to a memo obtained by the Financial Timeswhich says the letter has more than 150 signatories.

The points you raise are valid. Will splitting the tax business in two, divided between the auditing and consulting branches, weaken it? Who will lead the two new EYs? And what about the hard-to-divide issues like regulatory compliance and information technology? Although most of the division’s perimeters are outlined, not all of them have yet been clearly communicated.

Separation remains the best way to manage conflict, and even former EY employees admit they understand that challenge. As a single company, EY cannot audit its consulting clients, for example.

But when push comes to shove, it will only happen if EY partners believe it benefits them individually. That will come down to issues like the cash payment to be made to the audit partners to consummate the divorce. It has to be high enough to be accepted, but not so high that consultants protest.

In a way, it’s a classic EY challenge, but with partners as clients. The boss, Carmine Di Sibio, is trying to sell an idea smart enough to give the company an advantage, but simple enough that everyone can buy into it.

Even if it pulls through, any weaknesses will surely be exploited by EY’s big rivals: KPMG, Deloitte and PricewaterhouseCoopers. With a majority of 13,000 members to convince, Di Sibio has a lot of work to do.

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Brian Adam
Professional Blogger, V logger, traveler and explorer of new horizons.