EY hands UK chief Varley global sustainability role

13 January 2020, 16:47 | Updated: 13 January 2020, 18:32

The UK chairman of EY, the 'big four' accountancy firm, is to take on a new global role focused on sustainability as he steps back from the firm's day-to-day management.

Sky News has learnt that Steve Varley, who has been both UK chairman and UK and Ireland regional managing partner for the last nine years, is to relinquish the latter post.

Sources said that EY partners in the UK and Ireland were notified about the changes in a memo on Monday afternoon.

An external announcement is expected on Tuesday.

The move paves the way for a new managing partner to be elected to one of the most influential roles in Britain's professional services industry in the coming months.

It will also come during a period of profound change for auditors, following a series of government-commissioned reviews which have recommended reforms including the establishment of a powerful new regulator.

According to Mr Varley's memo, a copy of which has been seen by Sky News, a process to identify his successor as regional managing partner will begin next month and conclude in early March.

He said the division of his dual role would "help our whole UK firm navigate the regulatory and political environment and further increase [our] public interest focus".

Mr Varley added that the soon-to-be-disbanded audit watchdog, the Financial Reporting Council, had been briefed on the change and said it was "supportive".

Under Mr Varley's leadership, EY has been among the best-performing of the 'big four' auditors, avoiding many of the financial and regulatory pitfalls that have hampered its rivals.

EY employs more than 11,000 people in the UK.

In his memo to partners, he pointed to EY's audit quality performance, doubling of revenues and record on diversity and inclusion as notable milestones from his period in charge.

The shift in leadership responsibilities comes during a challenging period for the wider accountancy profession.

KPMG, in particular, has been forced to contend with a string of fines as regulators have sought to bare their teeth in the wake of prominent corporate insolvencies such as BHS and Carillion.

A review concluded last month by Sir Donald Brydon, the City grandee, that auditors should have distinct professional qualifications and should do more to root out fraudulent corporate activity.

Mr Varley also highlighted his new role as global vice-chair, sustainability, underlining the increasingly crucial status of environmental and climate change-related issues to major employers.

"Our ambition is for EY to be recognised globally by external stakeholders as the market leader in sustainability, in both the services we provide and our internal operations," he told partners.

In the sustainability post, Mr Varley will report to Carmine Di Sibio, EY's global chairman and chief executive.

Mr Varley, a former member of David Cameron's business advisory group during his premiership, has also served as the government's business ambassador for the professional services industry.

EY confirmed the contents of the memo but declined to comment further.