The British accounting sector has lost its only female leader after Sacha Romanovitch, Grant Thornton’s chief executive, said she would quit just weeks after disgruntled colleagues attacked her leadership style and “socialist agenda”.
Ms Romanovitch was heavily criticised last month in an anonymous memo that claimed to represent the views of at least 15 partners or directors. The memo raised concerns about her leadership style, the firm’s profitability and its supposedly “socialist agenda”; other partners told the FT they sympathised with some of those grievances.
Erik Gordon, a professor at the University of Michigan’s Ross School of Business, said: “Ms Romanovitch is leaving with a bit more grace than the partners who ran her out.”
Ms Romanovitch told the FT last month that it was “normal” for partners to disagree on strategy and that it was “deeply frustrating” that an individual or group of individuals had sent an anonymous complaint to the press.
Her decision to step down from the firm, which had positioned itself as an important challenger to its dominant Big Four rivals, came a week after Grant Thornton found itself embroiled in the accounting controversy at Patisserie Valerie. It also follows the firm’s biggest fine from the accounting watchdog in August for “misconduct” and “serious self-interest threats” in two other audits.
Grant Thornton said her departure was unrelated to the Patisserie Valerie problems, which the UK accounting watchdog is examining “carefully”, or to the anonymous memo.
Ms Romanovitch, who became CEO in 2015, said on Monday: “I am proud of what we have achieved in the market, with our people and with our clients, breaking the mould in so many ways.
“As we enter the next phase of our plans, following discussions with Grant Thornton’s board, we have agreed that the time is right for a new CEO to take the firm forward.”
Ms Romanovitch has been a vocal force in the accounting industry since she became chief executive. In February, the firm chose to stop pitching for audit work from FTSE 350 businesses, claiming it was impossible to compete against the Big Four. The decision — which sent shockwaves across the market — sparked calls for a review of the structure of the industry, which is now under way by the UK competition watchdog.
She also encouraged Grant Thornton to speak out on issues including mental health in the workplace and social mobility; capped her own pay; and adopted a new bonus system that meant all employees are entitled to a share of its profits, rather than just partners.
Ms Romanovitch’s focus on the firm’s “social purpose” rankled some partners, who claimed that profits had been sacrificed in the pursuit of an altruistic marketing message.
The firm’s profits before tax fell 12 per cent to £72m in the 12 months after Ms Romanovitch took over. Profits rose 8 per cent to £78m in the following year, which ended in June 2017.
This year’s results were expected to be released in October but will now be delayed until November. Grant Thornton’s performance will be compared with that of its closest rival BDO, which said earlier this month its profits had risen by a fifth to £109m in the latest financial year.
Grant Thornton’s Partner Oversight Board will email all partners on Monday about its election process, which is due to begin in November and finish before 2019.
All of the firm’s 200 partners will be invited to put themselves forward, and a final shortlist will be presented to the Partner Oversight Board once the contenders have been whittled down by an external psychometrics firm. The board will select a preferred candidate from the shortlist, who will be approved as CEO provided they receive backing from at least 75 per cent of partners.
The 50-year-old Ms Romanovitch’s decision to exit the firm will leave the UK accounting market led by men. Each of the big four — EY, Deloitte, KPMG and PwC — is run by a man, as is BDO, the UK’s sixth-largest accounting firm.
Get alerts on Grant Thornton UK LLP when a new story is published