pwc

7 July 2023

Patrick Hodder | Committee Secretary

Senate Finance and Public Administration
References Committee
PO Box 6100
Parliament House
Canberra ACT 2600

Dear Secretary

Senate Finance and Public Administration References Committee Written

Questions on Notice, Consulting services inquiry

We refer to the questions on notice from Senator Barbara Pocock, in her role as a member of
the Senate Finance and Public Administration References Committee, received by PwC
Australia (PwC) by email on 28 June 2023 (32 questions) and 30 June 2023 (one question),
with a due date of 7 July 2023. We provide our responses below.

Governance, structure ethics

1. Please provide a copy of your partnership deed or agreement and any

amendments or related documents that establish the rules under which your
partnership operates.

Please refer to Appendix A for the current version of our partnership agreement.

We respectfully request that the Committee not publish the Partnership Agreement.
The Partnership Agreement contains commercially sensitive information about the
firm's internal operations, including the approach to profit distribution, partner
remuneration, admission to partnership, entitlements and payments following exit, and
post-retirement restrictions. Disclosing this information could compromise PwC's
competitive advantage by providing insights to its competitors and weaken the firm's
position in negotiations with prospective employees.

PricewaterhouseCoopers, ABN 52 780 433 757

One International Towers Sydney, Watermans Quay, BARANGAROO NSW 2000, GPO BOX 2650 SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

 
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2. Please detail the nature and number of partners and their various types at
present: eg equitied, salaried, other, etc.

As at 30 June 2023, the firm had 920 partners of which 915 were equity partners and
five were salaried partners.

3. What protocol or agreement is in place between partners in relation to sharing

investment opportunities?
3a. Provide details of the protocols (including formal and informal understandings)
that guide the sharing of information and/or investment opportunities to partners
for their personal investments?

Please refer to Appendix B for a copy of our Personal Financial Investments policy.

Income, Revenue

4. Please provide details of your partnership revenue for the past 5 years, by year,
distinguishing its various main sources (e.g. tax advice, auditing, consultancy,
etc).

$m
FY22 FY21 FY20 FY19 FY18
Assurance 730 670 630 590 530
Consulting 740 610 610 660 590
Financial Advisory 1,060 880 840 870 810
Other 60 60 70 50 70
Overseas 250 210 250 190 160
Disbursements 170 160 190 240 190
Total 3,010 2,590 2,590 2,600 2,350

Our FY22 and FY21 revenue is publicly available in our FY22 Transparency Report1.
Our FY23 Partnership revenue details are still being finalised given our financial year
end is 30 June, and details of this will be made public when the FY23 Transparency
Report is released.

1
www.pw c.eom.au/about-us/assets/firmw ide-transparency-report-fy22.pdf

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5. Please provide details of partnership distributions in aggregate for the past
5 years, by year.

FY23 FY22 FY21 FY20 FY19

Total 843 842 743 759 710

6. Please indicate the percentage of revenue from public sector work compared to
private sector.

For the financial year ended 30 June, the details for each of the previous five years are
as follows:

Public sector Private sector

FY22 27% 73%
FY21 24% 76%
FY20 22% 78%
FY19 21% 79%
FY18 22% 78%

7. Please provide details of the range of partnership payments/incomes (including

base amounts, bonuses and payments in total) in $50,000 bands and show the
number of personnel in the partnership group in each band.

The table in Appendix C shows the number of PwC partners in each $50,000 band.
These figures include base incomes, adjustments (up and down), bonuses and equity
dividends.

In FY22, partnership payments ranged from $8,046 for a partner (who started at the
end of June 2022 and therefore worked less than one month in the fiscal year) to
$4,629,605 (for a partner with Responsibility Rating of 1.1 who worked a full fiscal
year).

8. Please provide details of the basis for payments to partners (e.g. KPIs or
formula) used to determine total payments and bonuses.

Total target income in any given year is determined on a partner’s Responsibility

Rating, and is based on their role and responsibility for the following year. A partner’s
actual income for a year will include adjustments depending on firm and individual
performance. Not all partners will receive awards (or bonuses) each year, but for those
that do - these are determined using a balanced scorecard which includes qualitative

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and quantitative KPls linked to their partner goals set at the start of the year and
business level strategy. The current KPI categories are financial growth and market
impact, people, quality and digital. These cover a range of specific KP ls, including
revenue, profitability, strength of client relationships, people engagement, regretted
turnover, diversity in the team, and Risk & Quality compliance.

9. In the latest full year, how many partners earn more than $1 million a year in total
income from the entity?
10. In the latest full year, how many earn more than $2 million a year?
11. In the latest full year, how many earn more than $3 million a year?

Please refer to Appendix C (as referenced in the response to Q? above).

12. In the latest full year, who was the highest earning partner within your firm and
how much did they earn?

In FY22, Tom Seymour (CEO from 2020 - 2023), was the highest earning partner with
a total remuneration of $4,629,605.

People, management

13. Please provide a copy of the misconduct policy and procedures for personnel
within the entity, differentiating those that apply to partners and to others.

Please refer to Appendix D and Appendix E for copies of our partner and staff
consequence management policies respectively.

14. Have any, and if so, how many, misconduct matters related to a partner or
partners have been lodged within the entity in the past year, and past 5 years?

FY23 FY22 FY21 FH20

10 10 8 15
Sourced from our internal case management system
** No data available for FY19

We note that our response to this question and other questions in this section relating
to 'people' are based on the information recorded in our case management and other
records. Matters also may be raised informally and not captured in our systems.

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15. Have any internal inquiries into misconduct, internal culture or human resource
related/employee experience and outcomes been conducted over the past
5 years?
1. How many?
2. If any, please provide their summaries and recommendations?
3. Please supply copies.

All issues related to behaviour of our people or business conduct that are raised with
the firm are taken seriously. Appropriate internal inquiries are undertaken and those
individual matters of behaviour include those set out in questions 17-21.

Where an internal inquiry occurs, the outcome is considered through our People &
Ethical Conduct Panel (P&EC Panel). The Panel evaluates the severity of the matter
against the relevant Consequence Management framework. Inquiries may be
undertaken either by our internal employee relations team or, depending on
seriousness orcomplexity, we may engage a third party investigator or law firm to
undertake that inquiry. In the past five years we have investigated six matters that
involved broader implications for culture as set out below.

Western Sydney Services Hub

An anonymous complaint was received from an employee at PwC’s Western Sydney
Services Hub (the Services Hub) which made allegations regarding the working
conditions at the Services Hub. The complaint was investigated, including a review by
the firm’s Diversity & Inclusion team. PwC provided details of actions taken to the
senate in its submission dated 20 January 2022 to the Select Committee on Job
Security in response to Questions on Notice from our appearance at the inquiry’s public
hearing on 8 December 2021.

Breach of Standards of Behaviour by Financial Advisory Partner

Allegations of poor behaviour were made by a former employee against a Partner in
the Financial Advisory team in Canberra. These allegations were investigated and the
facts lead to a broader group of employees in the same Financial Advisory team being
investigated for their conduct. A report was prepared for consideration by the P&EC
Panel and the findings were presented to the P&EC Panel for review and decision. The
P&EC Panel determined that the partner was to be mandatorily retired and three
employees had their employment terminated as a result of their breaches of the code
of conduct.

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Trivia event and Project Unite - accelerating our cultural diversity efforts
In September 2021, allegations of racism were made against two employees who were
hosting an online team trivia event. Issues were also raised that other people in
attendance at the online event, including Partners, did not speak up or raise concerns.

The incident was investigated by an external law firm. The findings of that external
investigation were presented to the P&EC Panel for review and decision. The Panel
made findings that resulted in the termination of two employees, financial penalties for
three Partners and formal warnings for 13 Partners who were either in leadership
positions in the team that ran the event, managed the employees who were terminated
or who attended the event.

During FY22, and in response to the trivia event, the firm launched a firmwide initiative
named Project Unite to create a more inclusive and fairer PwC, which gives our people
a true sense of belonging and enables everyone to achieve their full potential.

As part of Project Unite, we accelerated efforts to understand drivers of racial inequity

and solutions to close gaps to create an equitable and inclusive firm for all of our
people, regardless of their cultural background. We used thorough data, analysis and
research to better understand the firm’s diversity and inclusion challenges. We also
used storytelling to lift the cultural consciousness of our people, provide them with a
better understanding of people's lived experiences, and give our people the confidence
to start and continue to have conversations on cultural inclusion and racism.

The objectives of Project Unite were to:

● Create a more equitable and inclusive firm for all of our people regardless of their
cultural background;
● Understand and remove barriers faced by people from a diverse cultural
background (DCB);
● Advocate for anti-racism, drive accountability and demonstrate leading practice in
our approach to supporting and including our people of a Diverse Cultural
Background (DCB);
● Prove cultural diversity is a platform for growth.

The Project resulted in a number of recommendations being made and endorsed and a
cross-firm working group has been established to implement these as part of the firm’s
broader Diversity & Inclusion Agenda.

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Annual Employee Engagement Survey - Mojo
Annually, in line with all other PwC network territory firms, PwC Australia conducts an
employee engagement survey (called Mojo). This survey is completed by all partners
and staff who have been at the firm for more than 6 months. The survey provides us
with an opportunity to measure our employee engagement, and focus our efforts on the
drivers that have the greatest impact on engagement. Results are reported firmwide to
the Executive, at line of service level for each business, and all team leaders receive a
report for their teams. From results and insights analysis, a series of recommendations
and activities are implemented across the firm. In addition, more local and specific
activities and recommendations are actioned within teams.

Business Specific Culture Reviews

Over the past five years, the Assurance, Financial Advisory and Tax businesses have
conducted business-specific culture reviews. These reviews have been initiated
proactively by each business, and work with and within their existing cultures to drive
long-term performance (note: they have not been remedial).

Assurance (2020-2022)
In 2020, following a detailed review of its existing culture using The Katzenbach
Center’s global methodology, the Assurance business identified humility, courage and
realism as the critical behaviours that could positively influence its goals.

In 2021-22, the business began a phased approach to integrating and embedding

these critical behaviours into the practice and into our Assurance internal
communication and engagement strategy, including the following areas:

● Our partner and staff performance process, recognition programs, talent

acquisition and onboarding processes
● Our diversity, inclusion and wellbeing strategy
● Our learning and development programs across the employee lifecycle
● Our client feedback and employee feedback programs
● Engagement performance and quality programs.

In addition to measures in our employee engagement surveys, the business is also

implementing a sentiment analysis tool to track progress.

Financial Advisory Business (2020-2)

Between 2020-2, Financial Advisory undertook detailed culture reviews in Deals, Tax,
PwC Private and Legal. These reviews were undertaken as part of one of the firm’s
core strategic priorities, Inspiring and Empowering our People. The work gave the
business insights into four key areas:

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1. Cultural realities - the key cultural traits and cultural realities of the business and
the implications of these traits for people. This workstream also identified the
authentic informal leaders who existed in the business - the people who strongly
influence culture regardless of role or level of seniority.

2. Cultural aspirations - the creation of the cultural aspirations for the business
which were devised by the business’ leadership team, the culture steering
committee and representatives from the authentic informal leaders network.

3. Critical behaviours and symbolic acts - the identification and prioritisation of

the critical behaviours and identification of symbolic acts required to reinforce
these critical behaviours as well as cultural intent from leadership.

4. Accelerators, roadmaps and measurements - key areas of focus to address

following the culture review, governance and measurement framework for
ongoing culture evolution.

Tax (2021)
The Tax Business review is the Bruce Quigley review referred to at question 16.

Tax Practitioners Board matter

As previously outlined in public statements, our detailed investigations into the Tax
Practitioners Board matter occurred over the last 8 weeks. We have publicly apologised
and regret that we did not do more sooner2. We will provide a detailed timeline of our
activities in that regard in our response to the Senate Questions on Notice due 21 July
2023.

16. Have any independent external inquiries into misconduct, internal culture or
human resource related/employee experience and outcomes been conducted
over the past 5 years?
1. How many?
2. If any, please provide their summaries and recommendations?
3. Please supply copies

Three inquiries relating to broad matters of culture and conduct have been undertaken
by external parties over the past five years. We outline these below. The first of the
mentioned matters concerns action taken by an external body. The others are reviews
requested by the firm.

2
For example, please see acting CEO Kristin Stubbins’ open letter dated 29 May 2023:
https://www.pwc.com.au/media/2023/open-letter-from-pwc-australia-acting-ceo-kristin-stubbins-230
529.html

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From time to time as is common practice, we engage external legal services to support
our investigations of individual misconduct matters when additional or specialist
expertise is needed, but have not addressed these in this response.

Tax Practitioners Board matter (2023)

We have engaged independent external legal counsel to assist with our investigation
into the handling of confidential treasury information and the discharge of professional
or ethical responsibilities. This investigation is almost concluded. Further details are
provided in our response to Question 25.

Dr Ziggy Switkowski AO independent review (2023)

Dr Ziggy Switkowski AO has been appointed to lead an independent review of the
firm’s governance, accountability and culture. Dr Switkowski has access to all the
people and information he needs to conduct a rigorous and robust review. Dr
Switkowski has begun his work, and he has been asked to report in September 2023.
We commit to publishing his report and its recommendations in full.

Tax governance (2021)

In 2021 we commissioned an independent external review by Bruce Quigley into the
design effectiveness of our tax governance and internal control framework. The
comprehensive review sought to assess how our existing tax frameworks supported
the principles of:

● Acting with integrity;

● Having regard to the wider risks and circumstances relevant to the matter when
providing advice;
● Working honestly and openly with the ATO;
● Having appropriate quality control processes in place which includes regularly
testing those processes;
● Providing advice to clients which meets or exceeds the statutory “reasonably
arguable” standard;
● Meeting statutory and regulatory obligations; and
● Not engaging in activities which would constitute a breach of the promoter
penalty provisions.

The review concluded that the underlying codes of conduct (including our specific
global tax code of conduct) and internal control frameworks were sufficient, but that
there was room for improvement.

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The following recommendations were made and implemented:

● Reassessing the criteria underpinning partner and staff annual appraisals, with a
stronger focus on risk and quality metrics;
● Expanding the number of quality reviews undertaken annually;
● More frequent engagement with the ATO;
● Reassessing the thresholds for when a matter is referred to our Tax Policy Panel;
and
● Bringing independent member(s) on to the Tax Policy Panel to provide more
independent thinking when discussing complex tax matters.

Further, the review included a recommendation that we work with other large tax
advisory firms to draft and implement Adviser Principles that would provide sound
guidance and best practice for large market tax advisers providing complex tax advice.

Following a comprehensive consultation exercise, together with the other large tax
advisory firms, we drafted and implemented the ‘The Australian Tax Advisory Firm
Governance Best Practice Principles’. These principles require that we publish an
annual statement confirming that we have reasonable confidence that our policy and
procedures, which facilitate compliance with the Principles, are operating effectively.
The summary findings from this report were shared with the ATO.

We have since commissioned an updated review by Bruce Quigley of the design

effectiveness of our tax governance and internal control framework which will
commence in August 2023.

17. How many formal complaints of bullying, if any, have been made in the past year,
and in the past five years?

FY23 FY22 FY21 FY20 FY19

12 6 3 16 5
Sourced from our internal case management system

18. How many formal complaints of sexual harassment, if any, have been made in
the past year, and in the past five years?

FY23 FY22 FY21 FY20 FY19

19 8 5 4 65
Sourced from our internal case management system

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19. How many formal complaints of discrimination, if any, have been made in the
past year, and in the past five years?

FY23 FY22 FY21 FY20 FY19

6 0 1 4 3
Sourced from our internal case management system

20. Over the last 5 years, how many complaints about bullying, sexual harassment,
discrimination or employment related issues have been heard by external bodies
e.g. Fair Work Commission, Human Rights Commission or Employee
Ombudsman?

Based on our enquiries, we are aware of two matters relating to discrimination and
employment related issues that have been heard by the Federal Circuit Court and
Federal Court in the past five years. Of these two matters, one matter was determined
by the Federal Circuit Court and the other matter was settled before determination.

21. How many nondisclosure agreements and/or separation arrangements have

been finalised by the entity in the past year, and in the past five years? Please
distinguish NDAs from other arrangements.
1. How many have involved:
i. Sexual harassment,
ii. Bullying, and/or
iii. Discrimination?
2. How many have resulted in the involved party or parties exiting the entity?
3. Please provide details of the amount of any payments made by individual
case.

PwC has over 10,000 partners and staff members across Australia3. Based on our
enquiries, we are aware of 119 separation arrangements (“Arrangements”) that have
been entered into in the past five years.

On the face of the Arrangements, there have been:

i. two incidents of sexual harassment;
ii. six incidents of bullying; and
iii. five incidents of discrimination.

The vast majority of the Arrangements (including those not listed above) related to
performance related issues.

3
PwC’s FY22 Transparency Report:
https://www.pwc.com.au/about-us/firmwide-transparency-report.html#key-metrics

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All of the Arrangements involve a party exiting the firm, including circumstances where
an individual has resigned of their own volition.

Based on the information collated, the range of payments made with respect to each
of the Arrangements range from $3,286.71 to $331,282.00.

In providing this response, we have not included arrangements in relation to

separation arrangements relating to termination of employment by reason of
redundancy.

In addition, in providing this response, we have not included non-disclosure

agreements (NDAs) entered into for the purposes of internal projects.

Appropriate use of government information, conflicts of interest

22. How does your organisation define conflict of interest?

As outlined in our PwC Code of Conduct, conflicts can take many forms. We advise
partners and staff to consult when the following kinds of situations arise:

● There are PwC or personal interests, which could impact, or could be perceived
as impacting, our objectivity in doing what is best for our client(s).
● When PwC and a client are on opposite sides of the same matter.
● When we are asked to do work for one client which may be seen to be against
the interests of another client.

Our policies, together with our Code of Conduct, set out PwC’s expectations, and the
rules and principles governing our conduct and people. Our policy on conflicts of
interest sets out PwC personnel obligations to identify and address potential conflicts of
interests and sensitive situations before accepting or starting work on a new client or
engagement; and throughout the life of the engagement.

Please refer to our submission to this Inquiry4, specifically pages 5-8 which outlines in
more detail the measures we have in place with regard to conflicts of interest, including
annual training.

In addition, our response to previous Questions on Notice dated 2 June 20235, outlines
further details on our conflicts and confidentiality training.

4
https://www.aph.gov.au/Parliamentary Business/Committees/Senate/Finance and Public
Administration/Consultingservices/Submissions
5
https://www.aph.gov.au/Parliamentary Business/Committees/Senate/Finance and Public
Administration/Consultingservices/Additional Documents

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23. What protections exist to ensure that there is no conflict in people’s use of
government information? What specific safeguards are in place?

Please refer to our submission to this Inquiry, specifically pages 5-8.

24. What consequences are in place for the misuse of confidential government
information?

Please refer to our submission to this Inquiry, specifically page 9.

25. How many disciplinary actions have been taken in relation to conflicts of interest
and/or the misuse of government information in the past 5 years? Past 1 year?

Based on our enquiries, we are aware that the firm has taken action in relation to two
matters involving conflicts of interest and/or the misuse of government information in
the past five years, including the Tax Practitioners Board matter in which disciplinary
action was taken this year. The other matter occurred in 2018.

Tax Practitioners Board matter

Our investigation, carried out with the assistance of external legal counsel, into the
handling of confidential treasury information and the discharge of professional or
ethical responsibilities is near its conclusion.

As part of PwC Australia’s broader efforts to address the firm’s culture, governance
and accountability, the scope of the investigation was expanded to review partners and
staff with connections to the TPB matter, who may have violated our professional,
ethical or leadership standards.

As a result of the investigation, eight partners have exited or are in the process of
being removed from the partnership. We have named these partners in a press
release dated 3 July 2023.

These findings are in addition to the four partners who have previously left the firm
having been found to have shared confidential information.

Of the partners and staff who were named in the 2 June Senate submission, the vast
majority, including all of those who are still working at the firm, have not been found to
have disseminated confidential government information.

We expect that the investigation will conclude shortly and we will be happy to provide
further details to the Committee at that time.

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26. Have any conflicts of interest surfaced within your organisation in the past 5
years? If so, how were they dealt with and what were the consequences?

Managing conflicts of interest is a fundamental expectation of how we do business. We

deal with each matter individually based on our Conflicts of Interest policy.

In line with our policy, the identification and assessment of potential conflicts of interest
is undertaken prior to commencing an engagement through an Authorisation for
Services system.

Risk factors taken into account when assessing whether conflicts are likely to exist
include:

● Type of product or service offerings, for example, working on due diligence for a
merger or acquisition;
● Whether a third party is involved in the engagement. Through the risk
assessment process, where a third party is identified as being involved in the
engagement, e.g. sharing of deliverables to a regulator or legal counsel; and
● Any other special provisions the engagement team have identified, for example a
known sensitive client situation.

If conflict risks are identified, the Conflicts team provides advice on the acceptability of
an engagement, and the course of action that needs to be taken. In many instances we
will decline an engagement.

Additional controls that can be put in place to mitigate risks include:

● Keeping individuals away from specific floors or workstations (‘ethical walls’);

● Disclosure to engaging parties; and
● Application of internal IT and physical security measures to prevent unauthorised
personnel from accessing confidential information, such as password protected
files accessible to the engagement team members only.

We may also obtain consent from a client to undertake specific work.

In addition to controls that we may apply, in our experience, clients may also implement
additional controls. For Government and APS client engagements, this can often
include measures such as binding our firm to exclusivity agreements or probity plans
and oversight by a client appointed probity officer.

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27. How many staff have been seconded or equivalent into the state or federal
government in the past 5 years, past 1 year?

At this time, we do not maintain consolidated records relating to secondments into state
or federal government departments or agencies. Partners and staff are seconded from
time to time into state or federal government departments or agencies. All secondment
requests are assessed against our Secondments Policy which includes consideration
of the potential for conflicts of interest.

JobKeeper

28. How much, if any, JobKeeper payments in total did your organisation receive
and retain?

PwC Australia received no JobKeeper payments.

Political Donations

29. Where are political donations to the major parties sourced from within the
entity?

Payments of this nature are sourced from general expenditure across the firm. There is
no single budget or source.

30. Is an annual amount budgeted specifically for such political donations? If so,
how much was budgeted for this in 2022/23?

No.

31. Political donations/expenditure may take the form of direct donations,

memberships and sponsorship of related associations and conferences. Please
provide details of all expenditure of this nature by category for 2022/23.

Our political donations for FY23 total $353,949 which is split by category in the table
below. At this stage, our end of financial year reconciliations are yet to be finalised. On
this basis, the information included below is an estimate.

All political donations will be disclosed to the Australian Electoral Commission (AEC) in
line with our regulatory requirements and be made public on the AEC Transparency
Register.

From FY24 PwC Australia will no longer make political donations.

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Category Total
Memberships and sponsorship of related associations and conferences $236,347
Direct donations / in kind donations` $117,601
Total $353,949

32. Who and at what level are decisions made about political donations (as above),
how they are directed and how much is donated?

The previous process has been that all political donations must be approved by the
Head of Reputation (Director level). As stated above, from FY24 PwC Australia will no
longer make political donations.

Please contact me if you would like to discuss our responses.

Yours sincerely,

Kristin Stubbins
Acting Chief Executive, PwC Australia

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Appendix A - Partnership agreement

17
Appendix B - Personal Financial Investments

18
 PERSONAL FINANCIAL INVESTMENT

This policy sets out relevant principles when partners are considering financial interest
investments and clarifies that individual partner investments are not permitted alongside firm
investments. The firm may change or replace this policy from time to time at its discretion.

Grandfathering

Any change does not have retrospective effect in relation to partner personal investments made
prior to the date of the change. For clarity, any partner personal investments alongside firmwide
equity investments that have been made prior to the date of this policy, shall not be increased
from the date of this policy. This policy refers to other firm policies but does not change any
other policy, including any independence policy.

Financial Interests

Financial interests include shares, equities or other securities, loan or debt instruments, and
rights to acquire any of them including options or warrants. A reference below to an investment
in an entity includes holding any financial interest issued by or in relation to the entity.

Investments

An investment to which this policy applies includes an investment by a partner and the partner’s
family members, and investments made directly or indirectly e.g. through companies, trusts or
funds.

1. Individual investments where the firm is not an investor, and is not considering an investment
or providing services to the entity in exchange for equity/a potential future investment.

1.1. When considering this type of financial interest investment these principles apply:

a) Review the Investments Register held by the Equity Investment Council (refer link) to check
whether the firm is currently an investor, is considering making an investment in the relevant
entity, or is providing services to the entity in exchange for equity/a potential future investment. If
so, the individual investment is not permitted.

b) Consider if, by making the investment, you would create a personal interest that could conflict
with your ability to perform any role that you are required to perform for or on behalf of the firm
in an impartial and objective manner. If you are not sure, disclose it to a member of the
Executive Board/your reporting partner together with the Independence Office and ask them to
confirm whether you can proceed to invest. The matters which you must consider include the
nature of your role, your position in the chain of command, any external positions you may have
and the materiality of your proposed investment.

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c) Comply with the rules about investments in clients and their related entities (section 5 of the
independence policy in particular sections 5.3 - 5.4, 5.7 - 5.11 and 5.14). Pre-clear the
investment in Checkpoint to ensure it is a permitted investment for you.

d) If you are providing services to a client to which the investment relates (either directly or
indirectly) you must not have a material financial interest in that client, unless this is permitted
under the independence policy (see section 5.3 of the independence policy).

e) Comply with insider trading laws - see our Insider Trading policy.

f) As outlined in section 5 of the independence policy , ensure you are able to exit the
investment in 7 days. You will need to exit if an independence issue arises, for example if the
firm begins to audit the entity or if the entity becomes a related entity of another audit client.

g) Record the investment in your Checkpoint portfolio within 14 days of acquisition.

Personal Investments

2. Where the firm makes known to partners that an opportunity for personal investment exists,
including through dissemination of details of the offering/arranging briefings, but the firm itself is
not an investor.

2.1. Responsibilities of the partner who is/whose team is

disseminating information/arranging briefings about the offering:

a. Check CES to ensure the investment is not restricted (i.e. it is not an audit client or related
entity, or otherwise restricted).

b. Check with the Equity Investment Council that the firm is not currently an investor, or
considering becoming an investor, or providing services in exchange for equity/a potential future
investment.

c. Obtain the Chief Risk Officer’s approval for the dissemination of information to partners about
the opportunity.

d. Any information disseminated to partners must make clear the firm is not providing a
recommendation about the investment, and must set out a reminder to partners of each
principle in Part 1.1 items a.-g. above.

e. The opportunity must be offered to all partners, not just some partners.

f. Information about the opportunity must not be disseminated unless there are more than 20
non-PwC investors at the time when partners will invest. PwC partners are collectively not
permitted to acquire more than 19% of the investment offering.

2.2. Responsibilities of the partners who wish to invest:

2
a. Individual partners to apply each principle in Part 1.1 items a.-g. above.

Where the firm is, or considering to be, an investor in an entity/opportunity

3. Where the firm is already an investor in an entity/opportunity, or is considering investing, or is

providing services in exchange for equity/a potential future investment – can individual partners
also invest in the entity/opportunity?

3.1. Individual partners are not permitted to invest if the firm is already an investor in an entity, is
considering investing in the entity, or is providing services to the entity in exchange for equity/a
potential future investment.

3.2. If an individual partner is an investor in an entity/opportunity and the firm notifies the partner
of its decision to invest in the same entity or opportunity, or to provide services to the entity in
exchange for equity/a potential future investment, the partner must dispose of the relevant
financial interest as soon as practicable and no more than 14 days after the notification. If
disposal of the financial interest is not practicable, or is not practicable within the required time
period, the Equity Investment Council will consult with the partner and determine in its discretion
the terms of the disposal or any other action to be taken regarding investment in the
entity/opportunity.

More Questions?

Visit our Independence Office Australia page

This policy came into effect on 15 April 2019

3
Appendix C - Number of PwC partners in each of the
income bands6

Number of Number of
Band individuals Band individuals
0k to 50k 14 2250k to 2300k 6
50k to 100k 14 2300k to 2350k 1
100k to 150k 12 2350k to 2400k 0
150k to 200k 19 2400k to 2450k 3
200k to 250k 13 2450k to 2500k 1
250k to 300k 13 2500k to 2550k 0
300k to 350k 5 2550k to 2600k 1
350k to 400k 46 2600k to 2650k 0
400k to 450k 25 2650k to 2700k 1
450k to 500k 28 2700k to 2750k 1
500k to 550k 33 2750k to 2800k 2
550k to 600k 43 2800k to 2850k 0
600k to 650k 18 2850k to 2900k 0
650k to 700k 45 2900k to 2950k 0
700k to 750k 23 2950k to 3000k 0
750k to 800k 48 3000k to 3050k 0
800k to 850k 24 3050k to 3100k 5
850k to 900k 49 3100k to 3150k 0
900k to 950k 15 3150k to 3200k 0
950k to 1000k 59 3200k to 3250k 1
1000k to 1050k 14 3250k to 3300k 0
1050k to 1100k 27 3300k to 3350k 0
1100k to 1150k 36 3350k to 3400k 0
1150k to 1200k 5 3400k to 3450k 1
1200k to 1250k 20 3450k to 3500k 0
1250k to 1300k 28 3500k to 3550k 0
1300k to 1350k 12 3550k to 3600k 0

6
Please note that to avoid duplication, these increments have been analysed in $49,999.99 increments.
Therefore, the first category is $0-$49,999.99 and the second category is $50,000-$99,999.99 and so forth.

19
 Number of Number of
Band individuals Band individuals
1350k to 1400k 11 3600k to 3650k 0
1400k to 1450k 18 3650k to 3700k 0
1450k to 1500k 8 3700k to 3750k 0
1500k to 1550k 11 3750k to 3800k 0
1550k to 1600k 7 3800k to 3850k 0
1600k to 1650k 20 3850k to 3900k 0
1650k to 1700k 2 3900k to 3950k 0
1700k to 1750k 8 3950k to 4000k 0
1750k to 1800k 1 4000k to 4050k 0
1800k to 1850k 16 4050k to 4100k 0
1850k to 1900k 0 4100k to 4150k 0
1900k to 1950k 4 4150k to 4200k 0
1950k to 2000k 19 4200k to 4250k 0
2000k to 2050k 2 4250k to 4300k 0
2050k to 2100k 0 4300k to 4350k 0
2100k to 2150k 3 4350k to 4400k 0
2150k to 2200k 8 4400k to 4450k 0
2200k to 2250k 0 4450k to 4500k 1

20
Appendix D - Partner Consequence Management
Framework

21
Partner Consequence Management Framework

Having robust, transparent and consistent practices for managing consequences of non-compliance with our
policies and codes is a critical element to ensuring the conduct of all Partners is aligned with our purpose and
values.

1. Overview

The purpose of this Framework is to set out the process and to provide guidance in relation to the firm’s
response to partner conduct that does not align with the firm’s values or purpose.

Our Code of Conduct is our core set of shared values, and sets out a common framework around how we are
expected to behave and do the right thing. The Code also describes the expectations of our conduct, a key
element of which is that we abide by applicable laws and regulations.

2. Consequence Management Principles

The principles to be applied in the application of the Framework are to be:

● fair, reasonable and proportionate, while taking into consideration individual circumstances
and any other relevant factors
● applied consistently; and
● transparent.

3. Framework process

Where a partner grievance is raised the Partner Grievance Policy applies.

The Head of Partnership and/or the Chief Risk Officer (CRO) are to be advised as soon as reasonably
practicable of any other matters where there may have been partner conduct that is not consistent with the
firm’s Code or its values.

In consultation with the Chief Strategy Risk and Reputation Officer, the CRO and the Ethics and Business
Conduct Leader, the Head of Partnership, will determine whether the matter should be:

(a) investigated by the relevant Business Unit Leader or their delegate, before referral to any of Management,
the People and Ethical Conduct Panel (PEC), the Chief Strategy Risk and Reputation Officer, the CRO, Ethics
and Business Conduct Leader, or the Chief Diversity and Inclusion Officer; or

(b) referred directly to any of Management or the PEC Panel for investigation, consideration and determination
as required.

4. Factors to consider

Where a decision has been reached as a result of the application of the process under this Framework that a
Partner’s conduct does not align with the firm’s values or purpose, those charged with responsibility under the
Framework for determining an outcome should take into account a range of matters, including the following:

● The nature and severity of the conduct, including if applicable, relative culpability;
● The compliance history of the Partner;
● The experience and seniority of the Partner;
● Health and/or wellness issues;
● Cultural safety;
● The Partner’s response to the incident including whether it was reported on a timely basis and
whether the Partner has cooperated in relation to any investigation of consideration of the
conduct as part of the Framework process;

1
 ● Consistency in relation to other outcomes that have resulted from the application of the
Framework; and
● Any industry or other appropriate guidance in relation to outcomes for conduct of the kind that
is the subject of consideration under the Framework.

5. Guide on possible outcomes

Following an investigation, Appendix 1 outlines a number of possible outcomes that may be considered. If an
outcome relates to recommendations that impact the application of the Firm’s PEIS policy, the Chair of the
PEIS committee should be informed about that determination.

6. Key Contacts

Please refer any questions on any aspect of this policy to the Partnership Partner, your Business Risk Partner
or the CRO.

2
Appendix 1: Consequence Table

Explanation Examples Potential Consequence

Category 1 - Serious misconduct, non-compliance or failures (not including risk or quality

matters that may arise in the delivery of professional services) likely to result in a significant
adverse impact on our brand, clients, people or other network firms.

Deliberate, ● Dishonesty or intentional ● Referral by Management of the

reckless or misconduct matter to the Governance Board for
potentially ● Unlawful discrimination, the potential exercise of its powers
unlawful harassment or bullying of suspension or mandatory
conduct or ● Misuse of client retirement.
conduct that information, including ● The making of recommendations to
has the breaches of impact the application of the Firm’s
potential, for a confidentiality, or using PEIS policy (for instance to impact
significant the information to derive a adversely Partner responsibility
adverse impact personal benefit, or any ratings, performance ratings)
including on our misuse that directly ● Removal from leadership roles
brand, clients, impacts a client’s safety ● Requirement for remedial training
people or other or the security of their ● Imposition of a supervisory and/or
network firms data and systems reporting regime
● Wilful or reckless
disregard of duties and
responsibilities
● Repeated or ongoing
instances of
non-compliance

Category 2 - Misconduct or non-compliance that demonstrates a lack of reasonable care (not

including risk or quality matters that may arise in the delivery of professional services) but
which has the potential to adversely impact on our upon brand, clients, people and other
network firms

Conduct or ● Failing to act with ● The making of recommendations to

behaviour reasonable care in impact the application of the Firm’s
demonstrating a engaging with the Firm’s PEIS policy (for instance to impact
lack of clients or people or adversely Partner responsibility
reasonable care, meeting the Firm’s ratings, performance ratings)
with potential for internal requirements (for ● Removal from leadership roles
impact on the instance in relation to ● Requirement for remedial training
Firm’s brand, training requirements) but ● Imposition of a supervisory and/or
clients, other not including in the reporting regime
network firms or delivery of professional ● Apology, warning, counselling
our people services.
● Repeated category 3
breaches or failures

Category 3 - Misconduct or non-compliance (not including risk or quality matters that may arise
in the delivery of professional services) that is unlikely to adversely impact our brand, clients,
people or other network firms

Misconduct or ● Potential breach of ● Informal discussion (1:1) with a

non-compliance standards where there is warning
that is unlikely to an opportunity for the ● Counselling
have an person to remediate the ● Coaching & Development plan
adverse impact matter. ● Remedial training program

3
on our brand, ● Inadvertent and minor
clients, breach of the code of
other network conduct
firms or people ● A one-off low level
process breakdown
● Administrative mistakes
or errors
● Reassignment of responsibilities
with possible RR or FSPI
adjustment.
● Increased supervision or work/file
reviews
4
Appendix E - Staff consequence management policies

22
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+ What is a breach?

A breach is any act, or failure to act, which is contrary to your obligations to PwC
Australia. These include those outlined within your employment agreement, the
Code [https://www.pwc.com.au/about-us/code-of-conduct.html] , the Values and
Behaviours [https://www.pwc.com/gx/en/abouUpurpose-and-values.html] , our
Network Standards, Engagement [https:// policyhub.pwcinternal.com/Home] and
Workplace [https://policies.aap.pwcinternal.com/home-new/] policies and other
obligations and responsibilities outlined to you during the course of your
employment.

Refer to Appendix 1 for examples of breaches and possible consequences.

+ Consequence Management Principles

Action under this Policy is underpinned by principles to be:

• Fair, reasonable and proportionate, while taking into consideration individual

circumstances and any other relevant factors, including an employee's personal,
mental and cultural well being.
• Timely
• Unbiased, objective and consistent, applying the appropriate perspective and
level of expertise.

+ What happens when a possible breach is identified?

In consultation with the relevant Business Leader, HC Business Partners and

Business Risk Partners as appropriate:

1. Category 1 matters are overseen by the People and Ethical Conduct Panel
which will make any decisions on consequences.

2. Each Business/Function is responsible for addressing Category 2 & 3 breaches

and for determining any consequences.
 + What do I do if I have breached a Policy?

You can self report a potential breach by speaking to your partner, team leader or a
People & Culture team member, or you can make a report on line or by phone via
the PwC Ethics Helpline
[https://secu re.ethicspoint.eu/domain/media/en/gui/105406/index.html] . This may
be considered favourably in determining the response or consequence.

+ What factors are considered during the breach investigation process?

Where it is determined that the relevant behaviour does not align with the Code,
the Values and Behaviours, an employee's obligations under their employment
agreement, or constitutes a breach of one or more policies (including the policies
of PwC Australia or the PwC Network), those responsible for determining an
outcome/consequence should take into account a range of matters, including but
not limited to the following:

• Whether the breach was self reported

• The nature and severity of the conduct breach, including if applicable, relative
culpability
• The compliance history of the employee
• The experience and seniority of the employee
• Physical or Psychological health and/or wellness matters
• Cultural safety considerations
• The individual's response to the circumstances including whether it was reported
on a timely basis and whether the individual has cooperated in relation to any
investigation or consideration of the conduct as part of the relevant Policy
process.
• Consistency in relation to other outcomes that have resulted from the application
of the relevant Policy.
• Any previous penalties that may have been applied
• Any industry or other appropriate guidance in relation to outcomes for conduct of
the kind that is the subject of consideration under the relevant Policies
• Any additional information that might be considered relevant.

Appendix 1

Categories of Breaches and Potential Consequences

Category 1 - Serious misconduct, non-compliance or failures (not including in the
delivery of professional services) likely to impact adversely and significantly upon
brand, clients, other network firms or our people

Explanation Examples Potential Consequences*

Deliberate, reckless or • Dishonest or misleading conduct, • Termination of

potentially unlawful or intentional misconduct employment

conduct or conduct that • Discrimination, harassment or • Redeployment or

has the potential for a bullying demotion, which may

serious impact • Misuse of client information, result in duties reducing or

including on our brand, induding breaches of changing, and which may

confidentiality, or using the
clients, other network
information to derive a personal
firms or our people
benefit, or any misuse that
directly impacts a client's safety
or the security of their data and
systems
• Wilful or reckless disregard of
duties and responsibilities
• Repeated or ongoing instances
of non-compliance the Code, the
Values and Behaviours, or with
PwC Australia or Network
policies and standards
also result in reduction in
remuneration to reflect the
level to which
redeployment or demotion
occurs
• Written or verbal warning
• Impact on performance
rating including impact tier
reduction, and/or impact
on promotion opportunities
• Removal from leadership
roles
• Requirement for remedial
training
• Imposition of a supervisory
and/or reporting regime
• Apology, warning,
counselling

Category 2 - Misconduct or non-compliance that demonstrates a lack of reasonable care

(not including in the delivery of professional services) but which has the potential to
impact adversely upon brand, clients, other network firms or our people

Explanation Examples Potential Consequences*

Conduct or behaviour • Failing to act with reasonable • Redeployment or

demonstrating a lack of care in engaging with the Firm's demotion, which may
reasonable care, with clients or people or failing to result in duties reducing or

potential for impact on meet the Firm's policy changing, and which may

the Firm's brand, requirements (for instance in also result in reduction in

clients, other network relation to training requirements remuneration to reflect the

e.g. Essential IQ) but not level to which
firms or our people
induding in the delivery of redeployment or demotion
professional services. occurs
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