The KPMG audit leaks scandal has produced a second crisis, and this one belongs to Allens.
This is a reputation management failure that started long before anything was published. It started with a decision. Allens married their reputation to KPMG’s.
Any senior communications adviser looking at this brief should have seen the bear trap: a whistleblower matter, a client already under parliamentary scrutiny, the PwC scandal still reverberating, and an investigation scoped and controlled by a subcommittee of the firm under investigation. The reputational risk to Allens was obvious.
The decision to proceed on those terms is where the damage began.
Four Fails.
By then the damage was compounded. The committee, the media, and the public had drawn the obvious inference: what needs to be hidden probably should be seen.
What would your board do if its own external review was exposed as having been scoped to produce the answer it wanted?
Our Advice:
The author – Peter Wilkinson
The first question we ask our client: “What outcome do you want? If the answer is “We want to do the minimum we can get away with”, walk away. If the answer is, “We want to make sure we do what is right” or “We want to come out of this with a good reputation’, stay.
I like clarity, especially if there are board directors and the executive involved, lots of agendas. Moreso if it’s clear heads may roll. Strong and honest conversations up front matter.
Objectives:
An objective for each stakeholder in this case. We have a duty of care to the whistleblower, the accused, staff, clients, and the company. There’s also the board, regulators, the senators, media, and social. It doesn’t change the research but it does the writing.
Start Work:
The investigation: We use lawyers in many situations, for instance, sexual abuse allegations. People can confide in a lawyer what will never be revealed. An organisation needs to know the legal position of the victim, the accused, other staff, the CEO, and the company. We often ask that an executive summary be written, in case high-level information needs to be released.
From then it’s reputation management: Trust = Truth + Transparency + Traceability. Allens’ project report failed on all three. It didn’t pursue the full truth beyond the accounts of those under scrutiny. It tried to stay hidden. And when parliament supplied the traceability, the report’s limitations became the story.
The legal profession has long traded on a distinction between “external” and “independent.” Most of the public conflates the two. Not here.
Allens didn’t create KPMG’s misconduct. But it gave KPMG the document it used for months to hide it. That makes Project Magenta not just a legal product but a reputational instrument. Both firms carry the damage.
The question for every consultant doing this kind of work: if the report you’re writing were made public tomorrow, would it read as an exercise in managing the client’s exposure?”
If the answer is uncomfortable, the scope needs to change before the work begins. And if the client won’t accept that, you walk away.
