Gautam Banerjee, the new chairman of PricewaterhouseCoopers India (PwC India), is in an unenviable position. He is faced with the twin challenges of restoring the PwC brand in the aftermath of the Satyam case – the professional services firm was auditor – and an exodus from one of its most important revenue streams. In an interview with Pradipta Mukherjee and Ishita Ayan Dutt, Banerjee outlines the priorities before him. Edited excerpts:
You have taken charge at a challenging time for the company. What are your priorities now?
First, I will have to ensure that PwC continues to be a strong brand. The PwC practice needs to keep up with changes in the market place. The Indian market, for many years, was shut off from the rest of the world — very domestic-focused. Usually, if the country's economy has a particular emphasis, then the PwC practice is very similar to that.
We were also perhaps not as linked into our global network as we are in other locations. We have to get the practice more internationally networked, so that we can bring in practices and have the full suite of services that a market like India will need. If we look at where India is likely to need services from a firm like ours, then areas like infrastructure, healthcare and the government will be a big buyer of services. These are our big bets.
We also expect growth prospects with the implementation of the goods and services tax (GST) and as India gets ready to adopt International Financial Reporting Standards (IFRS).
What will be your role in ushering in the change?
We will have to bring in expertise from other parts of PwC to focus on these areas. I will play the role of transformational thinking, changing mindsets in the Indian practice and get the firm more focused on the market.
The PwC brand took a beating due to the Satyam fiasco. How do you plan to address that?
I wouldn’t say the brand has taken a beating. When I speak to our clients, they don’t have a problem with PwC, as can be seen from the re-appointments in the audit area. Clients don’t feel the PwC brand has let them down. But, obviously, when you are involved in a company where there is a huge fraud – like Satyam – you get tainted to some extent by that occurrence.
We regret being the auditor of Satyam, where such a big fraud took place. It is notoriously difficult to pick up management-perpetrated fraud like that one. Every thing is invented, fraudulent documents are provided and – particularly with the aura that this gentleman had – it is always going to be an issue. We have seen this the world over. This is not the first time that you have had a senior management-perpetrated fraud. They are often not easy to pick up. All the noise around the incident has had some impact on the brand, but people who use PwC have not felt the brand has let them down. Notwithstanding, we have to get those perceptions about PwC to change.
Will you initiate major changes because of that incident?
It gives us an opportunity to relook at every thing we do in India because India is changing, companies are becoming more complex. So, the way you audit them also has to change. In a sense, it is focusing on those changes. We are bringing in expertise from other markets that have gone through this change earlier, so that we can leverage on that experience. It will take some time before these things are behind us.
In the meantime, we have to continue to do good work. We have to make sure that people who interact with PwC see the value and differentiation that PwC brings. That takes time, but we are committed to making sure that happens.
What kind of expertise are you pooling in from other locations?
What we are doing significantly is investing in audit infrastructure so that audit teams get methodology support. We are actually sprucing up, getting more people on the ground with more expertise on multi-location audit, not leaving it entirely on the engagement team. There is a need to make right interventions. People have to be willing to question and not be influenced by authority. In the Indian culture, where there is tendency to be deferential to age and authority, we have to get our people to rise above that.
We see that in other Asian locations where seniority and age are important. Japan is a place where you keep bowing. If you are a senior person, you almost have to apologise if you disagree. That’s not a very conducive atmosphere for an audit process. You have to have robust discussions and may have to take positions contrary to what the client thinks. It’s not that it’s not there, but business and people culture in India is different, say, from the US. Our training, case studies, will concentrate more on these areas.
How important is India in PwC's scheme of things?
Though India is less than two per cent of the global business, we see more growth coming from countries like India, China, Brazil, Russia, Turkey and Vietnam. These countries will grow 8-10 per cent. There will be a shift from OECD (Organisation for Economic Co-Operation and Development) countries to these countries.
Even though India is a small part of our practice today, it will play a bigger role going forward. There is a definite opportunity to bring a lot of work from western countries and Australia to India. We have 2,000 people in shares services in Kolkata now and are looking to raise it to 5,000 in a couple of years.
Do you plan to ramp up headcount across India?
We have 6,400 across India and are looking at 10,000 in two-three years.
You have had a significant exodus. How has it affected your operations?
When we had the problem with people moving out, we moved partners from Delhi and other locations to Mumbai and managed to look after our clients very well. Tax is one of our growth areas. So, we need to fill vacancies at the top.
What is the typical attrition level for professional services companies? How does yours compare?
For professional services, attrition is at around 15 per cent. Ours has been around that for the last two years, barring the tax practice. But with the economy reviving, that could to go up to 20 per cent, if things are not done rightly.
What kind of talent retention policies are you looking at?
We are working on replicating our global best practices and talent development programmes in India. So, for instance, we are looking at creating more overseas work options for our employees in India, to travel to locations like New York and London. Currently, we would have around 10-15 people travelling to other countries for client servicing and other work profiles. We expect this number to go up to 60-70 soon.
