Ernst & Young goes international

Published on Tuesday 3 June 2008 22:22

IN WHAT has been described as the biggest shake-up in professional services since the collapse of Arthur Andersen, top four accountancy firm Ernst & Young yesterday completed the merger of 87 of its global practices.

The move brings all partnerships in Europe, the Middle East, Africa and India (EMEIA) under a single management structure.

Hywel Ball, managing partner of Ernst & Young's Scottish practice said yesterday that the choice was a "no brainer" for partners in Scotland and the UK. Partners in the UK firm voted for the change last week.

The new EMEIA area will take in 87 country practices, and will be a 5.6 billion organisation employing more than 60,000 people.

The move brings the practices under the common control, replacing individual country practice managing partners with a global regional managing partner. Mark Otty, chairman of E&Y UK is to head the new group.

Although the structure is "fundamentally different", E&Y will remain a limited liability partnership (LLP). Likewise, Ball will continue in his role as head of E&Y in Scotland.

"When you asked the people in the business the most common reaction was it is a no brainer," said Ball.

"It means there is one boss for all those countries. That makes a big difference for our clients. If we have an issue on service in another country there is one person to go to.

"If you are a global client with operations in different counties they want to know the quality is the same everywhere. And if you have one control structure, that will help consistent quality across the board. That is what our global clients are wanting now."

Although Ernst & Young, like its big four rivals PwC, KPMG and Deloitte, is a global brand, it currently represent networks of largely autonomous national firms providing sometimes-patchy cross-border services.

The move overcomes the various legal and regulatory restrictions between the 87 national partnerships and means they are structured more like the multi-national clients they serve.

The 3,330 E&Y partners concerned had to vote on the changes. Only one country of the 87 involved resisted the merger, but E&Y said Sweden will take a vote in the coming months.

Globally, Ernst & Young has three division – EMEIA, the Americas and the Far East, although Japan has not joined the Far East division due to regulatory issues.

Ball also said the structure change will allow E&Y employees and partners to move to other regions more easily as well as meet a demand among graduate recruits for international experience. "The young generation, they are excited about opportunities for global travel."