When Julie Boland was picked last year to head EY’s US business, partners hoped she would end a period of infighting that had culminated in the exit of her sharp-elbowed predecessor, Kelly Grier.
Boland was “Switzerland”, they joked, a neutral party with a reputation for consensus-building and an almost preternatural niceness of the kind found only in the US Midwest.
Yet Boland now finds herself in the middle of what one former partner calls a “civil war”, having pulled the plug this week on a year-long project to spin-off the Big Four accounting firm’s consulting business.
The break-up of the 390,000-person firm would have been the biggest upheaval in the accounting industry since the collapse of Enron auditor Arthur Andersen in 2002.
The aborted split consumed tens of thousands of hours of work and $600mn of partners’ money. Dubbed Project Everest, it was pushed by EY’s global leadership under chief executive Carmine Di Sibio and backed in principle by Boland herself. But Everest failed to find support among crucial players on the US leadership team, which opted to abandon the plan before 13,000 partners around the globe could have their say.
Di Sibio championed the split as a way of liberating both sides of the business from conflict-of-interest rules that prevent consultants from selling many of their services to the firm’s audit clients. Given EY operates as a global network of member firms, the planning required months of negotiations between the heads of its countries and business lines about how the operations, and the spoils, should be divided. Any split would then have needed approval on a country-by-country basis.
The end of Project Everest — and partners’ hopes of a windfall from the IPO of the consulting business — has unleashed a period of recrimination and acrimony. Partners furious at Boland are split between those who blame her for allowing the project to get so far and others who are livid that she failed to win over opponents and see it through.
“There’s a way to lead by building consensus,” said one person who has worked with her, “and there’s a way to use consensus as an excuse not to lead.”
For others, the eleventh hour decision to shoot down Project Everest said a lot about Boland’s leadership qualities, given that she was set to be elevated to global head of EY if the split went ahead. “That speaks volumes about the fact that she cares about the institution much more than she cares about her personal title,” said one senior partner.
Boland, 56, knows her EY history. Her father, Jim Boland, spent 34 years at the firm, becoming a senior partner in Ohio and a member of its US management before going on to run the Cleveland Cavaliers basketball franchise.
But his daughter did not immediately follow him into EY. She began an accounting career at PwC and then spent seven years in investment banking at Goldman Sachs and JPMorgan, including in London, before returning to Cleveland to take on chief financial officer roles. She only joined EY in 2010 and was promoted to Cleveland managing partner just four years later before stepping up to lead the US Central region in 2018.
Last year she became only the second woman to lead the US business, which accounts for 40 per cent of EY’s $45bn revenues. Grier had quit after clashing with Di Sibio over the extent of the US firm’s influence over the international operations and the size of the fee the American business pays to the global HQ.
Grier’s exit was so acrimonious that by the time Boland was elected to succeed her as US boss Grier had not attended regular global executive meetings for several months.
Relations between the US firm and the rest of the global network may be even lower now. The frustration of Everest’s proponents is not just that the US firm appeared to backtrack on a September agreement to put the break-up to partner votes but that it did so after driving a very hard bargain throughout negotiations.
“We’ve made every concession they’ve asked for,” said an exasperated senior partner outside the US, who blamed the U-turn on Boland’s “compunction to seek unanimity” among the US leadership. “There’s just a lot of indecisiveness: a little bit of who’s influenced her last, who’s had the last session with her.”
In an interview with the Financial Times last month after she called a “pause” to planning for Everest, Boland denied she had been inconsistent. “There’s a North Star that we’ve really been trying to achieve,” she said, adding the deal should happen only if it resulted in “two inspirational, purpose-led organisations”.
Ultimately, too many doubted that the audit-focused side of the business would be strong enough.
Unanimity on the 16-strong US executive committee proved elusive, and such was the toxic atmosphere Boland ultimately decided the ballot should be anonymous, with votes submitted to a lawyer. The exact split has not been revealed, but Project Everest did not achieve the two-thirds majority needed on the committee.
“Given the strategic importance of the US member firm to Project Everest, we are stopping work on the project,” Di Sibio and the global executive announced, tersely, on Tuesday.
Boland retains supporters on both sides of EY’s divide between consultants and accountants, including among senior partners who have worked closely with her through Project Everest.
Di Sibio wanted “to create a sense of momentum and have the momentum to be able to carry through any doubts [about the break-up]”, said one. “And it is fair to say that is a different approach to Julie’s, whose was to say, ‘this makes sense but we need to go through a process’.”
Boland is now trying to set the firm on a new course, promising US governance changes, a cost-cutting programme and investments in audit quality, but details remain to be fleshed out. After Boland addressed US partners in a webcast on Thursday, commenters on the private EY partner chat site Fishbowl were largely unimpressed. Some called her performance “robotic”; one thread debated whether the whole executive committee should be fired, or just Boland.
Some of the retired partners who had counselled the US executive committee have leapt to her defence. Steve Howe, who ran the US business for 12 years until 2018, former global bosses Bill Kimsey and Phil Laskawy and ex-global executive John Ferraro sent a joint statement to the FT, arguing that the right outcome had been reached.
“Julie Boland has been patient, courageous and fact-based in leading the US executive committee to its rejection of Project Everest, given its obvious and multiple challenges which could not be overcome.”
Focus will soon shift to whether Boland can strengthen her position and achieve the healing EY had needed since Grier’s exit, or whether too much damage has been done to her standing among partners. While it became clear this week that Di Sibio lost the power struggle over Project Everest, it is not yet clear that Boland has won.
