KPMG International is conducting a review of the governance of its French member firm amid an escalating internal dispute involving partner complaints, shareholder litigation and abrupt changes to KPMG France’s leadership, according to French media reports.
La Lettre reported that the review was triggered following concerns submitted through KPMG’s ethics-reporting system, and growing opposition to Marie Guillemot, president of the French firm’s management board.
Guillemot acknowledged that the firm was experiencing a “period of internal turbulence” during an emergency meeting with partners, according to the publication.
According to reports, the internal dispute escalated on 22 July when two members of KPMG France’s management board were removed. One was Damien Allo, leader of the firm’s Advisory business and artificial-intelligence strategy. Consultor reported that Allo’s removal occurred against a backdrop of disappointing results in Advisory.
French reporting has linked the crisis to several overlapping pressures, including the performance of the consulting business, disputes involving present or former partners and questions about how the firm’s partnership and governance structures have operated. La Lettre described shareholder litigation initiated by former partners as placing significant strain on KPMG France’s partnership model.
Separate reporting by La Lettre du Conseil said that approximately 20 Advisory partners are leaving the firm, which if correct would be material for a business that has around 7,500 employees and 350 partners.
KPMG France announced a series of senior appointments on 27 July. Valérie Besson was named head of Audit, Mathieu Schohn became head of Deal Advisory, and Laurent Choain was appointed to lead Consulting & Tech. All three joined the firm’s executive committee.
KPMG presented the appointments as part of a strategy to accelerate growth, strengthen its expertise and reinforce its multidisciplinary model following the firm’s recent refocusing on large corporate and mid-sized clients. Its announcement did not refer to the reported governance review, management-board removals or internal disputes.
The episode raises questions about the relationship between KPMG International and its legally separate French member firm. The international network can impose common standards and investigate ethics concerns, but responsibility for the governance and management of the French partnership remains with its domestic bodies.
Related Coverage
La Lettre: KPMG France faces an unprecedented governance crisis
Reports that KPMG International is reviewing the French firm’s governing bodies following ethics complaints and internal opposition to its leadership.
La Lettre: Shareholder disputes strain KPMG France’s partnership model
Examines litigation initiated by former partners and its reported implications for the ownership and governance structure of the firm.
La Lettre: Two KPMG management-board members pushed out
Reports the abrupt removal of two members of KPMG France’s management board on 22 July.
Consultor: KPMG removes Advisory leader from management board
Identifies Damien Allo as one of the removed directors and links the decision to weak results in the Advisory business.
KPMG France: New leaders appointed across Audit and Advisory
The firm’s official announcement confirms the appointments of Valérie Besson, Mathieu Schohn and Laurent Choain to senior operational and executive-committee roles.
La Lettre du Conseil: Around 20 Advisory partners reportedly leaving KPMG France
Reports a substantial number of partner departures alongside the changes to the firm’s management board.
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Keep following this. The issue goes to the core of the risks, including integrity risks, that lie at the heart of a consulting firm.