KPMG: a professional approach to community involvement
August 01, 1998
The BITC Awards for Excellence in June saw one company, KPMG, sweep the board, carrying off four separate awards. Not one of the ‘high street’ companies usually known for community involvement, winning the awards was the fruit of a concerted effort over the last three years to professionalise the firm’s approach to community investment.
KPMG has grown rapidly since the mid 1980s, and now employs nearly 9,000 staff in the UK with an annual turnover of some three quarters of a billion pounds from audit, accountancy, tax advice, corporate finance, corporate recovery and management consulting. KPMG’s global mission – with communities as one of the principal stakeholders – is “to turn knowledge into value for the benefit of its clients, its people and its communities”.
Unlike other professional service firms, KPMG publishes a full set of audited financial accounts for the 570 strong partnership practice in the UK and has incorporated the audit practice as a PLC. But the firm is still a partnership, with no separation between ownership and management. This closeness is an important factor in KPMG’s approach to the community.
Community programme
The crop of BITC awards is a good pointer to the main areas of the community programme: two were won in the Aim High education section (for teacher development and scale of activity in Wales), with another two for excellence (Investing in Employees and Investing in People in the Community). In addition, KPMG was runner up in the Company of the Year category, actually won by Whitbread.
The total community commitment is valued at £1.7 million, with £500,000 as a direct charitable contribution and the balance in other support for projects, mainly staff time donated. Flagship volunteering activities include:
Partners in Leadership, the head teacher mentoring programme, originally piloted by KPMG in 1995 and now with 100 companies providing 500 mentors nationally;
Roots & Wings for secondary school pupil mentoring and primary school reading skills;
Prince’s Youth Business Trust mentors to help young people with their start-up business ideas;
individual staff volunteering, for example through ABSA’s Business in the Arts and BITC’s Chartered Accountants in the Community schemes, both for management committee members;
team challenges, with around 15 a year, thought to be the largest company programme in the UK.
In addition, staff undertake development assignments – short-term projects mainly in paid time – to carry out specific community tasks as a skills and training opportunity.
Employee involvement
Professional service firms are essentially ‘people businesses’, so employee involvement must be a strong element of any programme that goes beyond cash donations. KPMG’s range of activities allows staff at all levels to participate – senior managers and partners tend towards head teacher mentoring and newly qualified professionals to PYBT, while pupil mentoring and reading skills activities achieve a good mix of staff across all grades.
The need to account for chargeable client time in professional service firms can hinder ad hoc employee involvement. An innovation by KPMG aims to overcome this: the Community Bank allows staff to charge up to two hours a month to a special code, taken at times agreed with the work team. Mainly used by junior and support staff, it sends an important signal from the firm’s leadership to line managers and indeed to staff themselves.
Human resource management is increasingly being integrated in the community programme. Already developed are opportunities for career development and skills enhancement and close collaboration has now started with the HR equal opportunities specialists.
Give As You Earn was recently relaunched, with a big effort achieving a 10% take-up rate in the south region (expansion nationally is planned for 1999). Led by an advisory Charities Committee of staff, donations to the staff charity fund are matched pound-for-pound. The periodic beneficiary is chosen by all employees using an Intranet voting system. The current effort is fundraising for Children Nationwide to buy a neonatal intensive care cot for King’s College Hospital, London.
Programme management
Around three years ago, partners decided to introduce an element of structure and formality to community activities, which until then had been undertaken largely ad hoc. As a pilot in London and the south (which represent two thirds of firm’s UK business), a full-time community affairs director was appointed to head a new Community Broking Service. This is consciously presented as an in-house intermediary between the firm and community organisations. As such, it explicitly aims to benefit the community as part of its purpose, not the firm alone.
Today it has a staff of three, headed by James Forte, who had spent more than 10 years in the business, first in executive search and recruitment and then account management. He reports both to Michael Fowle, a senior partner who until recently led KPMG’s south region, and to the UK chairman, Mike Rake (from October). He was previously chief operating officer and is a keen proponent of corporate social responsibility. He will take a close interest in the development of the Community Broking Service, as the lessons of the pilot in the south are examined and management for the rest of UK reviewed.
James Forte also has an informal role to spread practice around Europe and KPMG is supporting a new initiative to develop best practice in employee community involvement on the continent.
Business benefits
Many companies explicitly cite business benefit as the main motivation for their community involvement. Partly this is driven by their need to justify expenditure to absentee shareholders (or at least to the sceptical City analysts who advise the institutions). For KPMG as a partnership, the motivation is more philanthropic – most partners are conscious that the firm is a powerhouse of highly educated, very skilled and comparatively well paid people; they feel a sense of responsibility to contribute to wider society.
Previously this was expressed in a commitment to City and professional charities, but now there is an understanding that no major business can succeed without a clear view of its responsibilities to the world around. Leaving it to individual initiative is no longer enough; the firm itself must invest time and money in an organised approach.
That means the choice of what is done (as distinct from why) does have a clear ‘business benefit’ rationale, focused on supporting staff, building their skills and following their interests. The chosen priorities of education and enterprise, selected after a formal staff survey, are relevant to the firm, useful for staff and good for the wider economy in which KPMG seeks to prosper.
Challenges
For the future, the top priority is to achieve closer integration with business: acceptance of the intellectual case for community involvement among the firm’s senior leadership is only a necessary step towards convincing ‘front-line’ managers of the relevance where pressure to meet client needs is pre-eminent. At the same time, organised activity must spread out to rest of UK, sharing best practice between offices to achieve a cohesive and consistent approach, in line with the firm’s values.
The second priority is to achieve better measurement of the programme’s impact, internally and externally. Already a database for managing and keeping track of individual staff assignments and involvement activity is in place and KPMG takes part in the Bruce Naughton Wade Index. It is now studying how to apply the London Benchmarking Group input/output model.
A longer term issue is the link with the whole question of social and ethical accountability. Already the Risk Management Service – a growing business unit based on financial and treasury risk – is expanding into environment and social issues. KPMG assisted in preparing performance indicators for The Body Shop’s second social and ethical accountability report and has verified parts of Shell’s recent ‘report to society’. As it increasingly becomes the norm for all major businesses to have a verified social report, firms like KPMG will need staff who understand the complexities of companies’ role in society, based on first hand experience. The Community Broking Service could yet yield a big dividend on the partners’ charitable investment.
Benchmarks
KPMG
Chairman: Mike Rake (from 1.10.98)
Chief operating officer: Gary Williams
Turnover: ?726.4 million
Partnership profit before tax: ?36.1 million
Employees: 8,944
Year end: September 30, 1997
Community contribution: ?1.7 million
Percentage of profit available to partners: 1.2%
Per head of staff: ?190
Policy focus: volunteering and development assignments to support education, employment and enterprise
Flagship projects:
1. Partners in Leadership – head teacher mentoring
2. PYBT, pupil and other mentoring
3. Give As You Earn
Employee involvement: in addition to the Community Bank, match funding is offered to the staff charity fund
Management: unit of three, reporting to UK chairman
Contact: James Forte, Director, Community Broking Service
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