The coronavirus pandemic and its unpredictable consequences were necessarily the central theme of the firm’s 2019/2020 report. At the time, there was cautious optimism, fuelled by positive reports about possible vaccines, which offered the prospect of society returning to normal from the summer of 2021. While the optimism about vaccines proved justified, we underestimated the persistence of the virus. Consequently, both within the KPMG organisation and in its contacts with the outside world, the past year was again significantly affected by the pandemic.
Given the severity of the virus, the Supervisory Board is pleased with the Board of Management’s extraordinary efforts to do whatever they could to support employees in their changed working conditions.
The Supervisory Board is also pleased that KPMG’s long-term strategy has not been negatively influenced by the consequences of the pandemic. On the contrary, the focus on public trust, in a society where mistrust seems to be the trend, is more important than ever. In today’s uncertain world, providing trust is vital. The accountant, whose very job is to provide assurance, can be a beacon of trust. To achieve this, the accountant's reliability must be beyond doubt. The accountant must also be in tune with developments in society.
Ensuring reliability requires an uncompromising focus on quality. The Supervisory Board pays significant attention to this issue through our Audit Quality Committee, comprising all Supervisory Board members. It is gratifying to note that, over the past year, measures of quality have improved considerably.
KPMG's advisory branch can also look back on a good year. Strong growth in engagements - despite the economic contraction resulting from the pandemic - had a highly positive impact on both revenue and results. In these uncertain times, it appears that KPMG’s knowledge and advisory skills are greatly appreciated.
The huge developments in digitalisation present an enormous challenge for the business community in general, and this includes consultancy organisations like KPMG. Of course, digitalisation requires major investments in people and knowledge. The Supervisory Board strongly supports the Board of Management in its ambitions not only to retain but also to strengthen KPMG’s leading position through additional substantial investments in this area. Clearly, that these efforts must be continued in the coming year.
One challenge on the horizon, both for Assurance and Advisory, is a lack of staff. The 'love for talent' will play an extremely important role in the coming years as KPMG seeks to strengthen and expand its market position. This is why the firm’s approach to diversity and inclusion is one of the most important items on the Supervisory Board's agenda. The Supervisory Board notes that – although more work is needed – KPMG has made genuine progress with diversity in recent years.
Effective governance is a prerequisite for any company - all the more so for a partner organisation such as KPMG. The partner-owners who form a cooperative, the Board of Management, Supervisory Board, Works Council and KPMG International, are all extremely important for the optimal functioning of the company. Each of these bodies has its own role and responsibility. Maintaining a proper balance - and keeping a well-honed, critical eye on each other - are important conditions for success. The Supervisory Board is pleased to note that there is ample critical capacity and trust within the current governance. The Supervisory Board considers monitoring this to be one of its most important tasks.
The Supervisory Board is therefore grateful for its many contacts, over the past year, with all the 'players' in KPMG’s governance. Generally, consultations were held in a transparent and accessible manner against the background of a shared vision on the firm’s present and future.
In the past year, both Harry van Dorenmalen and René Steenvoorden came to their end of their mandates on the Supervisory Board. The Supervisory Board is grateful for their commitment to KPMG. Roger van Boxtel, who joined the Supervisory Board in June, became my successor as Chair from the beginning of December 2021.
The new year will again pose many challenges. It is still unclear how long the pandemic will continue to affect society. Partly because of this, there is significant uncertainty about economic developments. It is therefore pleasing that KPMG has strengthened its position both internally and externally during the past year in an exceptionally difficult climate, thanks to the enormous efforts of all its employees. The Supervisory Board would like to express its great appreciation to all who have contributed to this.
Bernard Wientjes, departing chair of the Supervisory Board