EY has extended the tenure of its UK boss Hywel Ball, allowing him to work beyond the firm’s mandatory retirement age of 60 and launch a cull of its executive leadership just weeks after the collapse of a plan to split its global business in two.
Ball’s future had been cast into doubt after his backing of EY’s failed attempt to split its audit and consulting divisions globally. The UK board decided to extend his tenure before the plan, codenamed Project Everest, unravelled last month, people at the firm told the Financial Times.
EY declined to confirm the period of the extension and its board has the power to lengthen Ball’s stay again in future. Ball, who turned 60 in August, would normally be required to retire at the end of its current financial year on June 30, under EY’s partnership agreement.
Instead, after almost three years in the role Ball announced sweeping management changes last week, telling partners he would shrink the executive leadership team from 13 to eight. Two women who ran against him to lead the firm in 2020 are among those leaving the team.
A person familiar with the changes said they signalled the “next stage” of EY’s UK strategy, with another adding that there was no sign of Ball heading for the exit.
Unlike his UK counterparts at the other Big Four firms, Ball’s appointment was not subject to a specific term length. However, a lengthy stay in the top job would be a surprise to some at EY, where many believed he would have a relatively short tenure when he was appointed in 2020, said former partners and staff.
The former head of audit was seen as a safe pair of hands to steer EY through regulatory upheaval as the UK accounting watchdog pushed firms to improve their auditing and reduce conflicts of interest, they said.
Ball also had the backing of EY’s global bosses, who had a direct role in appointing him. But their future has been thrown into doubt by the implosion of Project Everest. Global chair Carmine Di Sibio’s own tenure was extended beyond the usual retirement age before Everest collapsed so he could see the project to its conclusion.
In a note to partners sent last week and seen by the FT, Ball signalled that the UK management overhaul was a “start” and one of the people with knowledge of the matter said he “will be making more changes”.
Ball has pointed internally to the UK firm’s strong financial performance under his tenure, telling partners to expect “strong double-digit growth” in its current financial year.
In his note, he said partners, who earned an average of £803,000 last year, wanted “to simplify the business . . . facilitate more time for partners to serve our clients and drive profitable growth”.
He and financial services head Anna Anthony pledged to partners last month to cut costs and tackle “inefficiencies”, admitting that Everest’s failure risked damaging EY’s brand.
The changes are likely to be welcomed by some partners, who have long complained about the number of partners in internal management positions, who do not generate revenue by working for clients. “You’re working hard every day for a bunch of people that don’t do very much,” said one former partner.
The most high-profile departures from the leadership team will be head of client service Alison Kay and chief operating officer Lynn Rattigan.
Both women lost out to Ball in the race to succeed Steve Varley as senior partner in 2020, said people with knowledge of the contest.
Kay was seen as a potential successor to Ball, having been placed in a powerful, newly created role after failing to secure the top job. She will move to a role in EY EMEIA.
The heads of legal, talent and risk will be among those leaving the executive team and instead report to the slimmed-down executive every three months. Steve Ivermee, UK head of strategy and transactions, one of EY’s four service lines, is set to be replaced by the start of July.
All of the people leaving the leadership team will remain at the firm.
EY said that “partner tenures are regularly extended in the UK and across the global network for a variety of reasons including client delivery and leadership responsibilities”. About 10 partners each year were allowed to carry on working after reaching the age of 60, said one of the people at the firm.