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Ernst &Young
Global review 2010
Chairman’s letter 2
Chairman’s Q&A 4
01 Globalization 7
02 People 19
03 Entrepreneurship 29
Chairman’s letter
2
Global review 2010 Chairman’s letter
The past year has been one of recovery Positioned against these trends are some
James S. Turley and readjustment for the global economy — important advantages that Ernst & Young
recovery from the worst recession in decades, has as an organization. We are recognized
Chairman and Chief Executive Officer and readjustment of the relationships between as the most globally integrated professional
Ernst & Young
developed and emerging economies, between services organization — in our mindset, actions
the public and private sectors, and between and structure. We are building and fostering
global institutions and nation states. the leading people culture in our profession.
And we have the leading brand and reputation
The strong recovery we’ve seen in the
with entrepreneurs all over the world. These
emerging markets has contrasted with a
are strengths that we have cultivated for
weaker one across the developed world,
years, and that will serve us extremely well
accelerating a long-term shift in economic
in the decades to come.
power from west to east and from north
to south. Governments, central banks and Our long-term focus on the trends that
regulators looked for ways to stimulate and will be shaping the world means that, as
support their domestic economies. And the the recovery takes hold, we are uniquely
unprecedented cooperation between countries positioned to provide quality services for our
in the depth of the crisis has come under strain clients. Two years on from the worst global
from national pressures. downturn in decades, Ernst & Young’s financial
performance held steady and, encouragingly,
Our increasingly complex and interconnected
was much stronger in the second half of the
world requires businesses to be more global,
financial year. This performance is testament to
more accepting and understanding of diverse
the efforts of our 141,000 people, and I want to
points of view, and more focused on what
thank them for working tirelessly for our clients
really matters in the post-crisis world. This
and colleagues while always demonstrating
is occurring at the same time as sweeping
their unwavering commitment to quality.
demographic changes continue to impact the
world. The teams we will each be part of in
years to come will be much more diverse than
those same teams may have been a short time
ago — diverse in terms of gender, ethnicity,
nationality, religion, generation and many
other characteristics.
3
Global review 2010
Chairman’s Q&A
Jim, you spend a lot of your time speaking economic output, more than half of global
with business leaders around the world. economic growth, and they are bouncing back
Are they confident about global economic from the downturn much more quickly than
recovery? the developed world. Continued changes in
As the recovery takes hold, people I speak to demographics mean this trend will continue
say they’d have hoped that recovery would be for decades. The G-20 is much more
more definite everywhere around the world, representative of this changed world than the
but there are some bright spots. Different G-7 or G-8, and so it’s right that it has become
parts of the world are recovering at different such an important forum for cooperation.
speeds — the confidence in the emerging
The G-20 leaders have called for a single set
markets is strong and justified by both their
of high-quality accounting standards around
recovery and their growth prospects. And
the world. Are we any closer to achieving it?
there’s a slowly growing sense of optimism
Yes and no, but I remain optimistic.
in the developed economies, too.
Convergence of IFRS and US GAAP is an
However, business leaders think that some
important objective on the path to realizing
major risks remain. The first of these risks
the goal of a single set of high-quality
is that the international cooperation that we
accounting standards used around the
saw during the crisis fractures and countries
globe — an effort we continue to endorse
become protectionist. We are seeing
without reservation.
evidence of this in the global dispute over
currency intervention. A second risk is that Under the leadership of Sir David Tweedie
entrepreneurs stay on the sidelines, when and Bob Herz, the IASB and FASB have
they are vital to creating the jobs that are made great strides towards realizing the
badly needed in many developed economies. goal. And, we welcome the appointment
And a third risk is that the global economy is of Hans Hoogervorst and Ian Mackintosh
knocked backward by a sovereign debt crisis. as IASB Chairman and Vice Chairman
respectively, and of Leslie Seidman as
Apart from focusing on the economy,
Acting Chairman of the FASB. But much
what are business leaders focused on now?
work — and much uncertainty — remains.
The thing that I’m hearing a lot of discussion
and debate around is how companies should The Boards have an ambitious timetable
prepare for, mitigate or otherwise manage and, perhaps more importantly, they have
low-probability but high-impact risks. not been able to agree on some important
Events this year such as the oil spill in the areas like financial instruments. Both the
Gulf of Mexico showed just how significant IASB and the FASB feel pressure from the
these risks can be. Traditionally management G-20 to complete their joint projects
and boards have probably spent more time expeditiously. And the IASB feels the added
focusing on their higher-probability risks. pressure of certain countries that are set to
That’s important, but I think the focus is adopt IFRS in the near future. But these
shifting now to encompass a broader view pressures cannot lead to a sacrifice in the
of all risks, even those thought to be very delivery of improved, high-quality and
unlikely to occur. operational accounting standards.
One of the results of the downturn is that the Progress on the joint projects also is an
G-20 seems to have emerged as an important important consideration for the US Securities
body for global economic and regulatory and Exchange Commission (SEC) as it decides
coordination. What is your view on that? whether to commit to a date — or dates —
I think this is one of the most important certain to require US companies to adopt IFRS.
changes, or at least it reflects one of the most We hope that taking the time that is necessary
important changes, that has occurred in the to develop improved, high-quality standards in
past several years. The downturn has really so many important areas will not significantly
accelerated the shifts in economic power to affect the SEC in continued progress toward
the emerging markets. This year the emerging making an adoption decision. However, we
markets will account for nearly half of world are at a critical juncture for all parties.
4
Global review 2010 Chairman’s Q&A
Here is the thing, though. When I talk to a lot. If the “Enron-era” crisis was
people in the US, I make it really clear to characterized by countless restatements of
them that I can’t see any advantage for the accounts, then this crisis has certainly not
US to operate by a different set of rules than been. In fact, the profession feels pretty good
those that are followed in most of the rest about the role it played in helping ensure the
of the world. I don’t believe that benefits fair presentation of accounts.
the US economy, the US capital markets
That said, I think there are some very
or US investors. So that is why I remain
legitimate questions the world is wrestling
optimistic about IFRS becoming the single
with now. If you have few if any financial
set of high-quality, global accounting and
restatements, yet you still have the crisis
financial reporting standards.
we just experienced, then people rightly ask
Because of rising budget deficits, how relevant historical financial information
governments around the world are searching really is. So the issue becomes a discussion
for revenue while, at the same time, they around what information investors need to
are competing for scarce jobs and capital. make the right decisions. Do they need more
In this complex tax environment, how are forward-looking information, more on key
clients responding? performance indicators? Do they need more
Clients are definitely getting the message information about judgments, estimates
that tax is more important from both a and accounting policies?
strategic and a risk management perspective.
This is clearly not just an issue for the
In response, C-suite executives, audit
profession. It’s something that our regulators
committees and company boards are
and investors around the world are starting to
increasingly including tax risk management
discuss as we all try to prevent a replay of this
as part of overall corporate governance.
crisis in the future.
Last year, the US Commissioner of Internal
So what do you think the auditor’s
Revenue, echoing a sentiment increasingly
responsibility should be?
shared by tax administrators around the
We have a proactive responsibility to make
globe, said that companies need to view tax
sure that we comply with auditing standards
as an issue that gets appropriate vetting at
and that the clients we serve are complying
board level, because complicated business
with the requisite accounting standards.
transactions raise complex tax issues and
So the first and most important responsibility
because tax is one of the biggest expenses
is to act diligently and professionally in
on the income statement. Transparency is
compliance with standards, and have clients
the new watchword of corporate governance.
do the same. Where the application of those
All of this is occurring in a time of substantial
standards would result in something that is not
revenue needs for most governments in
“true and fair”, then we should figure out how
the world and, therefore, increased
to discuss this with regulators, discuss this in
enforcement activity.
a more open way with audit committees, and
Audit committees are also responding by figure out the next steps to take.
expanding their focus from tax compliance
Regulators also want to figure out whether
issues to tax risk management. One
and how auditors should work more closely
consequence of the new enforcement era is
with prudential supervisors. The UK Financial
that tax administrators expect corporate
Reporting Council and Financial Services
boards to understand the outcomes of their
Authority issued a white paper talking
business tax strategies in their role as
specifically about that and this type of
corporate stewards. This underscores the
discussion is also included in the recently
importance for clients to have open and
issued EU green paper on the auditing
regular communications, especially between
profession. What role should auditors who
the tax function and the C-suite. We are seeing
serve financial institutions have in talking
leading companies implementing more
to different regulators? That’s a discussion
effective communications frameworks to
that’s going to take place over the next year.
ensure tax issues are brought to the attention
of the audit committee and full board. How do you feel about how Ernst & Young is
doing right now?
As a result of the financial crisis, some
One of the things that I’m always interested
people have asked, “Where were the
in is how others see Ernst & Young. I travel
auditors?” How do you respond to that?
all over the world, and what I hear about our
The first thing I’d say is that it’s important
organization is remarkably consistent around
to contrast the last two crises we’ve been
the globe. There are three things, really.
through. The crisis at the beginning of this
decade had a large number of financial First, when others look at the profession,
restatements, so you could rightly call it an what they say is that Ernst & Young is by far
accounting and auditing crisis. The crisis the most global — the most global in mindset,
that we’re emerging from now was really an governance, structure and actions. And I hear
economic crisis. It was about credit bubbles, this consistently whether I’m talking with
property bubbles, and asset values changing clients, regulators, students or whomever.
5
Global review 2010 Chairman’s Q&A
Second, I hear that Ernst & Young has a inclusive organization; having the most
leading people culture — a culture that’s built robust learning and development framework;
on our values that permeate the organization and offering the most engaging environment
around the world. When people look at us in which to build a career.
globally, this is the place they want to be.
If we attract and retain the best people —
Third, I hear we have the best brand in and invest in them — then we will deliver the
working with entrepreneurs — working with best results for our clients. Our aim is to be
business people who are really driving things an organization comprised of highly skilled,
in the marketplace. Part of that comes from highly motivated and highly engaged people
our Entrepreneur Of The Year program, but who believe Ernst & Young is the best
the biggest part of it comes from our organization for them and feel excited and
decades-long commitment to having a great proud to work here.
client portfolio in strategic growth markets
Advisory was one of your growth areas
and emerging economies.
this year. Why are you building your
When people talk about us this way I feel like Advisory services again?
we’re getting it right — that these advantages The downturn created greater demands
we have, and that people see us as having, among our client base for risk management,
position us perfectly for continued success, operational efficiency and sustainable
the way the world is today and the way it will performance-improvement services.
be in the future. Such demands provide an opportunity for
our profession and our organization to be
We’ve won some well-known audit clients
at the forefront in stabilizing and revitalizing
over the past couple of years, many of whom
the world’s leading organizations through
have cited our globalized structure and
these difficult times.
focus on traditional services as a key factor
in their decision to appoint us. We’ve gained We have a very focused Advisory strategy.
global household names such as Siemens, It’s around transactions, risk and performance
Eni, Danone, Enel — subject to shareholder improvement closely related to our traditional
approval, Fiat Industrial and United Airlines. services. We have chosen to focus our
And we’ve won a lot of great projects with investments in our traditional and related
non-audit clients, too, ranging from Barclays services and not pursue investment and
to Vale. I think these new clients and growth in the large information technology
engagements prove that our global structure systems integration and outsourcing space.
is a point of difference that resonates strongly
Finally, what do you feel your most
in the market.
important role at Ernst & Young is?
So I feel great about how we’re doing, although For me, the answer to this question doesn’t
every day we have to commit ourselves to be change. In my eyes, the most important
better. I’m not satisfied — nor are any of our thing I can do is to ensure the people of
people — when regulators find things around Ernst & Young have a personal sense of
the world in our engagements that they wish what is right and what is wrong, and of what
we had done differently. Quality in Everything is expected of them. And, most importantly,
We Do is what we are all about. that all our people have a deep belief that
nothing is more important than their own
How have you managed to achieve as
personal integrity and commitment to
much as you have done in terms of global
quality. If anyone or anything makes
integration when it seems as if other
them uncomfortable, at a client or within
similar organizations have struggled?
Ernst & Young, I want them to know that it is
There are probably lots of reasons, but what
not just okay for them to object, or raise their
stands out in my mind is the trust we have
hand, or ask for assistance: it is their personal
built over the years. This is trust among
and professional obligation to do so.
partners of our practices, trust across
borders, respect for different opinions and That is why, just as in previous years, I spend
perspectives and a teaming culture that most of my time traveling to our offices,
pervades the entire organization. visiting our people — speaking with them and
our clients. Because getting our people to
Why do you think Ernst & Young’s people
truly understand our expectations of them,
culture is so special?
and truly believe in our commitment to them,
Every culture is unique — it can’t be replicated.
doesn’t happen just by email or voicemail.
At Ernst & Young we aspire to have a leading
Meeting our people where they live, and
people culture everywhere in the world.
seeing each other face to face, is the only way.
To achieve this, we invest in being the most
6
Globalization
7
Global review 2010
Globalization
8
Americas EMEIA Asia-Pacific Japan
Our Americas Area was formed We created our EMEIA Area in Our newest-formed Area, which Our Japan Area employs more
in 2006. It comprises 29 countries 2008, bringing together 67,000 brings together 26,000 people than 7,000 professionals and
and nearly 41,000 people. people from 90 countries across across 20 countries, was created works with many of Japan’s
The workplace culture of the Europe, the Middle East, India and in 2010 through the integration best-known companies across
Americas Area is regularly Africa. It was a groundbreaking of our former Oceania and Far the financial, manufacturing and
recognized by organizations move, as many assumed that it East Areas. The Asia-Pacific electronics sectors. It also acts
such as the Great Place to Work was impossible for an organization region is the world’s most dynamic as the hub for our Japan Business
Institute and Universum, which such as ours to take such a big economy. We believe that much Services network — nearly 350
frequently place Ernst & Young step. Creating EMEIA cemented of our clients’ and our own future Japanese-speaking professionals
near the top of their lists for our reputation as the most globally growth will come from the region based in 60 cities around the
countries across the region. integrated organization in our field. and our Asia-Pacific Area will globe who serve Japanese
enable us to better serve clients clients operating overseas.
looking to invest in or grow
across the region.
9
Global review 2010 Globalization
At Ernst & Young, we have long thought that globalization is one of the
defining issues of our time. Our response has been to transform our Globalization index
We engaged the Economist
organization so that we keep in step with the changing needs of our clients Intelligence Unit to create an
and our people. Our clients need integrated, cross-border service and the annual globalization index and
same high quality wherever they do business around the world. Our people released Redrawing the map:
globalization and the changing
want to build careers in an organization that’s global in its outlook and world of business at the
inclusive in its approach. World Economic Forum, 2010.
We asked 520 senior business
We’re not merely a loose collection of national practices. We are the most executives for their views on
globally integrated professional services organization in our mindset, the impact of globalization.
The key findings were:
actions and structure. And at the heart of our highly integrated organization
• The rise of the emerging
are the 141,000 people who comprise Ernst & Young.
markets has changed the game
and outlook for businesses
Our global mindset
As our world has become more interconnected, the people we work with, • Companies are still planning
international expansion
and for, come from a diverse range of backgrounds and cultures. We want to despite the downturn
recruit and develop a workforce that mirrors the world we live in and has the
• Successful companies
skills and mindset to work effectively across any borders. require culturally diverse
management teams
To support them and help foster the global mindset needed to work
• Innovations developed in
in cross-border and cross-cultural teams, we encourage international one country are not always
assignments among our member firms and promote an inclusive work commercially viable in others
culture that respects diversity. The success of our integration efforts as • Businesses must engage with
we’ve moved from a country-focused organization to a more integrated, governments and other policy
makers on issues such as trade,
global one is a testament to the global actions of our people.
protectionism and regulation
Our global actions www.ey.com/globalization
Global integration means we can respond faster than our competitors.
We can access the right people and assemble broader, more experienced
teams, wherever the client is based, to deliver seamless service worldwide.
We can consistently negotiate everywhere, execute everywhere and
mobilize resources everywhere.
We can invest on a global basis, also. This was the fourth year of our
US$1 billion investment initiative. Underlining the shift in global economic
power, much of that investment has been earmarked for emerging markets
and the program exceeded expectations, with more than US$1.2 billion
ultimately invested.
By acting globally we deliver better, more consistent quality. The UK Audit
Firm Governance Code, which came into effect in 2010 and applies to our
UK business, stipulated bringing in Independent Non Executives (INEs).
We decided to also implement this requirement at a global level as well as
naming the INEs to our Global Advisory Council, our main global oversight
body. This was part of our commitment to achieving the highest quality
standards, worldwide.
10
Cross-border connections
At Xerox Corporation, executives are however, as the team introduced new subject
frequently called on to take new leadership matter specialists to enhance the service we
roles that require them to relocate provide Xerox. As a result of this commitment,
internationally. So, they expect to work Xerox engaged us on a variety of information
with a professional services organization technology, process improvement, tax
that has as global an outlook as they do. and transaction advisory services projects
throughout EMEIA and North America.
“This means our international client service
team has to be constantly in touch with one A recent Xerox acquisition provided us with
another to share insights and ideas,” says a great opportunity to demonstrate our due
Dan Kaplan, Ernst & Young Global Client diligence services and our ability to assist
Service Partner for Xerox. “We’ve built trusted during post-acquisition integration.
relationships throughout Xerox’s global
“Xerox assembled an internal transition
organization by understanding their business
team that planned and executed a smooth
imperatives and issues, and demonstrating
integration of two complementary but
how we can best help Xerox management
different businesses,” says Dan. “We provided
overcome the challenges they face.”
insights around transactions, tax, valuation,
Ernst & Young has provided global internal human capital and information technology.
audit outsourcing services to Xerox since 2001. Our ability to listen and work with their team
Our relationship has expanded in recent years, was just as important as what we had to say.”
11
“Our global structure means we have broad
and a shared commitment to quality.”
geographic reach, central accountability
Reaching new heights
12
Global review 2010 Globalization
13
“The diversity of our team — in terms of
global approach were really recognized.”
culture, skills and location — and our
14
Global trading, global teaming
“Japanese trading companies — or ‘sogo shosha’ “These companies need us to match their
as they are known in Japan — are complex global footprint and global outlook as well as
but nimble organizations,” explains Shinichi deep industry experience across their diverse
Saito, Ernst & Young’s Global Client Service range of interests. In the case of one client, we
Partner for one of the best known of these support its global operations in more than 50
companies. “They are highly diversified and countries, through dedicated teams all around
highly globalized — often earning most of their the world. It works across many different
revenue overseas — although their structure is sectors, so our Global Industry Centers in Oil
uniquely Japanese. Their outstanding feature & Gas, Mining & Metals, Power & Utilities and
is that they can quickly adapt their business others are vital to the services we provide,”
models to match the changing global business says Saito. “Drawing on them, on our Japan
environment,” he continues. Business Services network and on our other
service-line professionals, within a day we can
Many of these trading companies span a
put together the right team for any project,
wide range of industries — from fashion to
anywhere in the world, which will provide the
infrastructure to mineral resources to energy
client with the same high level of service they
— and create economies of scale by linking
would receive in Tokyo.”
together functions such as logistics, financing
and equity investment, and marketing across
businesses and borders. So serving such clients
effectively requires the right team and mindset.
15
“Our team is highly integrated and that
is what makes a difference.”
Thinking beyond borders
16
Global review 2010 Globalization
17
Global review 2010 Globalization
Companies are looking to our Tax practice for help with tax advisory and
reporting, as well as tax risk management. The combination of our strong
network of tax professionals, market-leading insights and global focus and
integration enables us to address the interconnected needs of our clients’
global operations. In addition, our deep industry and geographic experience
positions us well to better understand their businesses, focus on their needs
and provide exceptional client service to help them achieve their goals.
Transaction Advisory Services
We help clients make better decisions about how to strategically manage
capital and transactions. In today’s globalized world, effectively managing
capital is challenging. We are seeing more complex transaction structures
involving a broader range of buyers, demanding financing arrangements
and a greater need to maximize cash release than in the recent past. As a
result, more rigorous capital management is more important than ever.
That is why in 2009, we repositioned our Transaction Advisory Services
practice around our clients’ most pressing issue — capital. We have aligned
ourselves to our clients’ capital agenda — helping them raise, invest,
optimize and preserve their capital. This broader positioning enables us to
articulate the value we can add beyond our historic focus on transactions
and complements the services we offer in Assurance, Tax and Advisory.
Advisory
Over the past few years we have invested in building our Advisory capabilities
and attracting talented Advisory professionals to join Ernst & Young
around the world. Today, Advisory is one of our fastest-growing service
lines and, with nearly 20,000 advisory professionals in over 140 countries,
it is one of the broadest global advisory networks of any professional
services organization.
The changing economic environment has created greater demands for
risk management, operational efficiency and sustainable performance-
improvement services. In response to client demand and the changing
economic environment, we have repositioned our capabilities in the area
where we believe we can make the most impact and where organizations
need the most help.
We have focused our Advisory strategy around transactions, risk and
performance improvement — areas closely related to our traditional
services. Through our skills and objectivity, we help our clients stabilize
and revitalize their organizations and bring stability and confidence to
their many stakeholders.
18
People
19
Global review 2010
People
20
“Being flexible can open up new worlds
of opportunity.”
Distance learning
21
Global review 2010 People
Inclusiveness
As our clients become more global and expand into new markets, they
expect us to be equally diverse. We have a strong commitment to bringing
together the right teams for our clients from across our global organization.
These teams match our clients’ needs in terms of knowledge, skills and
cultural background.
Diverse teams are also proven to stimulate innovation and new ways of
problem solving. But they need an inclusive culture to help them function at
their best. Inclusiveness is all about making the diverse mix work. It’s about
equity and opportunity — making sure that differences are celebrated so
that talented people from any background can rise to the top, and ensuring A selection of our awards
that opportunities to develop and advance are available for all from day one.
Around the world, our people
Making sure that all our people’s voices are heard and valued not only helps culture is recognized by external
attract and retain the best people, but also it helps get better answers for organizations with prestigious
awards and accolades.
our clients and our organization. These include:
As the most globally integrated organization in our field, we encourage a CAREERS & the disABLED
magazine
global mindset in all of our people. We have made good progress on diversity Top 50 Employers, 2010 Readers’
and inclusiveness in recent years and we want to accelerate that progress. Choice, USA
Our leaders are accountable for delivery — for setting goals, developing DiversityInc
actions and monitoring results, and for engaging clients around diversity Top 50 Companies for Diversity,
and inclusiveness issues. USA, 2010
Employer Branding Awards
Excellence in Training Award,
India, 2009
Equal Opportunity for Women in
the Workplace Agency (EOWA)
EOWA Employer of Choice for
Women list, Australia, 2010
Fortune
100 Best Companies to Work For,
2010
Great Place to Work Institute
Best Workplaces in Canada, 2010
Great Place to Work Institute
Mexico
Best Companies to Work for
Women in Mexico, 2009
HR Alliance Awards
Best University Recruitment
Program in Germany, 2009
Progressive Employers
of Canada List, 2010
Stonewall Top 100 Employers
The Workplace Equality Index,
UK, 2010
Universum Group
Third in World’s Most Attractive
Employers — Global Top 50
Rankings, 2010
Working Mother
100 Best Companies, USA, 2010
22
“Getting people with different perspectives
perform their best.”
People tend to spark off each other and
together can deliver great results for clients.
Team bonding
23
“As a mentor, it’s important not only
the ups and the downs.”
share your own experiences — both
to show understanding, but also to
Rewarding relationships
24
Global review 2010 People
Development
A work culture that focuses on people has to have personal development
at its heart. Our commitment to developing people helps build an engaging
and positive workplace that’s stimulating and rewarding. This way, we can
build the skills and knowledge we need to develop and retain the talented
people who will drive our future success and deliver a differentiated
relationship and service for our clients.
Our global learning and development framework is called EYU. It was
launched globally several years ago, and we continue to integrate it
throughout our business. EYU gives our people broader experiences and
empowers them to take ownership of their careers. It is designed for all
of our people and can be tailored to both individual and business needs
through learning, experience and coaching.
Learning — A global curriculum has been developed and implemented to
deliver consistent learning across our four Areas and service lines. We are
investing in improving the system to better balance virtual and classroom
learning.
We have re-engineered our milestone programs to combine networking and
career development opportunities from joining to retirement. We mark the
critical junctures in our people’s careers with events and special coaching
programs held around the world for interns, new employees, new managers
and new partners. We are currently making our induction program more
consistent around the world. In financial year 2010 more than 10,000
people attended “Welcome to EY” and in 2011 around 30,000 new joiners
are expected to attend.
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Global review 2010 People
Our global learning curriculum has two primary objectives: first, to build
general business skills and acumen, and second, to constantly refresh and
enhance technical skills across our service lines to drive excellent client
relationships and service.
There are currently more than 16,000 courses on our learning and
performance management system, EY Leads. Over the 2010 financial year,
our people undertook more than six million hours of learning and completed
over 700,000 courses. EY Leads not only delivers learning, but also is used
to validate that people have had the technical training they require from a
regulatory perspective across our global organization.
Experience — We know that the most enriching and career-enhancing
experiences are gained on the job, and we recognize this as a formal part
of our career development framework. We are committed to helping our
people get the experiences they need, and our service lines plan assignments
in ways that not only give our clients high-quality service, but also provide
our people with the best experiences for their career development.
Career mobility is an important part of this commitment. We encourage and
support cross-border and cross-service-line placements through our Global
Exchange Program and Area-wide initiatives, such as our EMEIA Area’s New
Horizons program. Mobility helps people develop an inclusive mindset and
thrive in an increasingly global market, while matching our clients’ needs.
Our values
We also encourage our people to use their professional skills to give back to
their communities. Their communities not only benefit from their insights Who we are:
and talents, but also our people benefit in their careers and their lives — often People who demonstrate integrity,
enhancing their leadership, communication or project-management skills. respect and teaming
People with energy, enthusiasm
Coaching — Coaching is about authentic conversations between people and the courage to lead
at all levels throughout our organization — stretching from daily informal People who build relationships
on-the-job coaching to project feedback to periodic formal performance based on doing the right thing
reviews. We are improving our global tools and processes to provide
robust and focused feedback and mentoring. We have also increased
our investment in formal coaching. For example, we have launched
new partner-transition coaching programs and have communities of
coaching champions who facilitate programs and give feedback to
leadership on coaching.
26
“Use your experience and influence to make a
people doing extraordinary things.”
difference. You’ll get to meet extraordinary
Leading with our values
27
Global review 2010 People
Engagement
Workplace engagement — how people think, act and feel about their work —
has long been recognized as a powerful indicator and driver of productivity,
commercial success and employee retention. Its importance has been
amplified by the downturn and its impact on motivation.
We want our people to feel enthused by their work, their colleagues and our
organization, and to be comfortable in an organization that gives them the
flexibility they need to achieve their professional and personal aspirations.
We focus our efforts around engagement on three core elements:
conversation, choices and celebration.
Conversation — This is about listening to our people and engaging in open
and authentic dialogue at all levels of our organization. Our Global People
Survey is one of the ways in which we listen to our people. It helps us to
identify those areas where we are getting it right, and those areas where
we need to try harder — across all aspects of our business. The survey is
conducted every other year and tens of thousands of our people worldwide
take part.
Choices — The need for flexibility in the modern workplace is becoming
more pronounced as a result of business cycles or the multiple demands
of work, family and community that 21st -century workers face. We have
always supported flexible working arrangements, and our long-term aim
is to support and develop a flexible workforce that is responsive to the
needs of our clients and the needs of our organization while, at the same
time, motivating our people by offering choices in how, when and where
they work.
Celebration — Celebration is about reward and recognition. Our Chairman’s
Values Award program is a very important example of one way we
recognize people who bring their energy and dedication to work to make
a difference to their clients and the wider community. This year our annual
Chairman’s Values Award attracted more than 2,600 nominations from
across Ernst & Young. The awards celebrate those people who live our
values to the full.
28
Entrepreneurship
29
Global review 2010
Entrepreneurship
Entrepreneurs make a difference. They not only have great ideas, but also
the drive to make them a reality. They use their fresh thinking and hard work
to create positive social change — bringing new concepts and products to
market, and creating jobs and wealth.
Globalization has empowered entrepreneurs. They thrive in high-risk and
high-reward environments — where creativity, innovation and flexibility can
bring real advantage and disrupt established players. Today, entrepreneurs
start out global because the internet and the opening up of international
markets has eroded the importance of a single home market. As a group,
entrepreneurs represent the best hope of creating sustained economic
growth around the world.
In developed economies where growth is still fragile, entrepreneurs have
a vital role to play in helping to turn the corner. Entrepreneurship will, over
the long run, do far more to create sustainable job growth and fuel economic
recovery than government stimulus. By constantly challenging the status
quo, entrepreneurs will create new jobs and even new markets.
In the emerging markets, entrepreneurship has an equally important role
in propelling future growth. As these economies modernize and become
more efficient and their state-owned enterprises privatize, entrepreneurship
and foreign direct investment play vital roles in creating employment.
30
Creating a Better Place
“People don’t realize how big this charged batteries for depleted ones in less time
transformation is going to be,” says Gil Forer, than it takes to fill a car with gasoline, allow
Ernst & Young’s Global Cleantech Leader. EVs to match the extended range of internal
“Moving to a more resource-efficient and combustion cars. Better Place has created
low-carbon economy — enabled by cleantech a new business model as well. It separates
— represents a new industrial revolution, ownership of the battery from the EV and uses
one that governments, multinationals and a service-based model to make EVs affordable.
start-ups will all play big roles in advancing.” By combining this technology and business
To help understand the direction the cleantech model, Better Place has created a scalable,
revolution is heading, the Global Cleantech low-cost solution that could reduce the
Center hosts regular “Cleantech Ignition” dependency on oil and drastically cut the
sessions that convene leading players in the world’s CO² emissions, while reducing the
evolving ecosystem for in-depth discussions. cost of driving to just pennies per mile.
One of the pioneers of cleantech is Israeli- “Better Place is an early-stage company
American entrepreneur Shai Agassi, whose that has the potential to change the world,”
bold vision of zero-emission transportation explains Gil. “Companies such as Better Place
led him to found electric vehicle (EV) choose to work with us because they recognize
company Better Place in 2007. Agassi’s vision our long experience with emerging high-growth
encompasses not only EVs, but also, critically, businesses, and understand the role we’re
the network of charge spots, battery-switch playing in fostering cleantech insight-based
stations, software and services that support discussion and debate.”
them. The switch stations, which exchange
31
From garages to greatness
“Our first meeting with Google was over lunch world’s best-known IT firms for more than
at an Indian restaurant in Silicon Valley, back 20 years and with well-known internet giants
in 1999, just before they received their first for more than 10, and today we’re working
venture-capital backing,” explains Dave Cabral, with the next generation of technology
Ernst & Young’s Global Client Service Partner leaders. We recognize the potential in these
for Google. “Five people were there from high-growth companies and provide the help
Google and, at the time, those were the only they need to achieve it.
five people who worked there. By the following
“Today, Google is one of our biggest global
year they’d grown to 20 employees and we did
clients — but we were just as interested in
their first audit.”
working with them when they were five guys
Through the years Ernst & Young has helped we were eating some papadums with,” says
Google pass many of its milestones, including Dave. “Because whether a client is big or
strategic investments, its initial public offering small we only know one way to serve them —
and acquisitions. the very best we can.”
Many of our largest clients have been served
by us from their earliest stages. We’ve been
working with many of our technology clients
since long before they became household
names. We have worked with some of the
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Global review 2010 Entrepreneurship
33
Global review 2010 Entrepreneurship
34
Delivering healthy returns
“Pharmaceuticals is probably not the first FTSE 250 Index. Since 2006, we have provided
sector that comes to mind when people Hikma’s group internal audit function across
think about business in the Middle East, but its 12 worldwide locations. And we have
it has a strong and growing presence,” says performed due diligence and valuations work
Waddah Barkawi, Ernst & Young’s Global Client on Hikma’s acquisitions and advised on the
Service Partner for Amman-based Hikma company’s supply chains and strategy.
Pharmaceuticals. Hikma, which was named
“With its operations across the Middle East,
Ernst & Young Middle East Entrepreneur Of
North Africa, the United States and Europe,
The Year in 2007, was founded by entrepreneur
Hikma has true global impact,” explains Waddah.
Samih Darwazah in 1978. Since then, it has
“Our global reach, our strong relationship
grown from just two products and sales of
and our understanding of entrepreneurial
US$150,000 to 4,000 products and sales
companies allow us to provide the kind of
of more than US$600 million across 49
service that Hikma deserves and demands.”
countries last year.
Ernst & Young has worked with Hikma on a
variety of projects over the years. In 2004, we
reviewed internal controls in the run up to the
company’s 2005 listing on the London Stock
Exchange, where it is a member of the
35
Global review 2010 Entrepreneurship
36
Global review 2010 Entrepreneurship
Cleantech
The world’s resources and natural environment are under unprecedented
pressure from population growth and increased consumption by an
emergent middle class. Resulting higher energy and commodity prices,
and concerns around climate change and energy security, are pressuring
companies and governments to transform to a more resource-efficient,
lower-carbon economy.
This transformation is being enabled by clean technology innovation.
Much progress has been made in cleantech in recent years, as evidenced by
increased private and public sector investment, the creation of new market
leaders, supportive new policies and regulations and a robust pipeline of
innovation in both technology and business models. In 2010, total worldwide
investments in clean energy are estimated at more than US$175 billion.
And its impact will only continue to grow. Many governments view cleantech
as an important source of job creation and have deployed cleantech
strategies to drive growth and competitive advantage by stimulating an
innovation-based economy.
Our Global Cleantech Center, one of our 16 global industry centers, helps
cleantech companies, corporations and governments to make the most
of opportunities and realize the benefits of cleantech in this transforming
world. As part of our commitment to this sector, each year we host a global
series of cleantech roundtables called ignition sessions. These bring
together key stakeholders including innovators, corporations, investors,
utilities, government and non-governmental organizations to discuss
cleantech issues. This year’s sessions, held in Munich, Shanghai and Silicon
Valley, focused on the consumer, supply chain and infrastructure issues
that need to be addressed to move electric vehicles from vision to reality.
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Global review 2010 Entrepreneurship
38
World of opportunity
“Entrepreneurs drive economic growth “Thinking about the entrepreneurs that I’ve
and social change,” says Greg Ericksen, met over the years and what’s changed and
Ernst & Young’s Global Vice Chair — Strategic what’s stayed the same, I think what’s changed
Growth Markets. “They create jobs and markets is that entrepreneurs today have more global
and their innovations enrich lives. But they opportunities than they did just 10 years ago,”
often don’t get the recognition they deserve. Greg adds. “Information technology,
We started Entrepreneur Of The Year and World globalization and the rise of the emerging
Entrepreneur Of The Year to celebrate their markets have been good for all businesses,
positive contribution and inspire others.” but have been especially good for
entrepreneurs. They have the speed and
Greg has been involved with our Entrepreneur
agility to take advantage of the opportunities
Of The Year program from its beginnings in the
that these changes have presented.
United States in 1986. He led its international
expansion and founded World Entrepreneur “What’s stayed the same is the entrepreneurs
Of The Year — the only global award for themselves. Entrepreneurs are still carving
entrepreneurs. World Entrepreneur Of The out their own success. They’ve got passion,
Year celebrated its 10th anniversary this year. vision, resilience and single-minded
In that time, Greg has met over 300 World determination. These timeless traits are
Entrepreneur Of The Year finalists — all of what make these entrepreneurs and their
whom have won Entrepreneur Of The Year companies exceptional.”
in their home countries.
39
Global review 2010 Entrepreneurship
40
Facts and figures
41
Global review 2010 Facts and figures
% change
% change
Revenue by service line US$ millions FY10 FY09 US$ local currency
US$ millions
Total Total
21,255 21,440
12,354 12,385
Audit clients Audit clients
Ernst & Young is not a global corporate
structure where ownership, legal control,
or profits are consolidated at a central
parent entity. The financial information
presented here represents combined,
not consolidated, revenues, eliminates
inter-firm billings and includes expenses
billed to clients.
8,901 9,055
Non-audit Non-audit
clients clients
FY10 FY09
42
Global review 2010 Facts and figures
% of companies served by Ernst & Young % of companies served by Ernst & Young
57 %
26 %
26%
Non-audit clients1 Audit clients
34%
Audit clients
Non-audit clients1
43
Global review 2010 Facts and figures
Offices worldwide
Americas EMEIA
8,373 9,551
1—100
101—500
40,318 67,771
1,501—3,000
3,000+
44
Global review 2010 Facts and figures
Global Executive
46
Global review 2010 Facts and figures
47
Global review 2010 Facts and figures
48
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