How transformation can create value for all

As the theme of the World Economic Forum at Davos 2023 reflects, businesses are now facing an almost unprecedented combination of challenges.

Here in the UK, the Bank of England has predicted the longest recession on record, fueled by rising prices and interest rates. Further afield, the ongoing war in Ukraine is having devastating consequences on the ground and contributing to a cost-of-living crisis across Europe as energy costs increase and supply chains are disrupted.

Climate change is no longer on the horizon, it’s here now. And that means a renewed focus on action, not plans, with businesses having a central role in delivering the transition to net zero. All set against a background of disruptive technologies, speeding up every aspect of business and creating constant, unrelenting and unpredictable change.

Business at the centre

Not only are businesses at the centre of this storm, our profession also has a vital role to play in calming it, from managing risk to providing advice and assurance.?That’s one of the reasons we have continued to invest heavily in people and technology to meet the growing demand for our services.

Increasingly, we are seeing CEOs respond to these challenges by choosing transformation over incremental change, whether that be through technology adoption, game-changing M&A or re-aligning their business around a core purpose.

Intrinsic to this is the need to meet the requirements of all stakeholders: society and the planet as well as shareholders and regulators. With customers and employees increasingly expecting more from organizations, the onus is on business to be more accountable and agile – transformation can help to deliver that.

While the focus so far has been on the challenges, it’s important to realise that there are also huge opportunities. Al Gore was one of the earliest and most effective in speaking out about the dangers of climate change, but he has also described sustainability as “history’s biggest investment opportunity”.

Set for transformation

Leaders recognise that getting those big calls right will define their businesses for decades to come – and so, despite all today’s challenges, there’s never been a more important time to invest in the future.

And we’re no different at EY. After another very strong year we are progressing with proposals to separate into two independent organizations, which we believe will enable us to continue our sector leading growth.

Under the proposals, which Partners of EY member firms will be voting on, the partnership would keep the EY brand and provide leading audit and assurance services, plus it would have all the complementary services clients need: from fraud, cyber and sustainability to tax, forensics and risk. Still a multi-disciplinary business, still a major player and still operating on a global scale.

We would also have a new global corporate public entity formed from most of the existing EY Consulting, Tax, Strategy and Transactions businesses. It would have the growth capital to acquire and form alliances in a way that our current structure can sometimes hinder and would be able to grow services as quickly as the market demands.

Helping to deliver value for all stakeholders

This transformation is being driven by our needs as a business, but we believe that it would also help deliver value for all EY stakeholders. It would create better career opportunities for EY people and be more able to meet the demands of clients in areas like sustainability, which will become ever more vital as companies step up to the challenges of climate change.

And, by helping to improve choice and quality in the audit market, our proposed separation would help us to serve the public interest and provide a global solution to regulatory concerns.

I’m incredibly proud that we are reimaging the future of our profession and believe this bold move would enable us to embrace the changing landscape, whilst also helping to deliver greater long-term value for EY people, clients and communities.?