Ernst & Young has named former Assistant Secretary of the Treasury Mark Weinberger as its next chairman and chief executive, replacing Jim Turley when he retires from the global audit and consulting firm in June 2013.
Weinberger, 50, currently sits on the company’s global executive board, the firm’s highest governing body, and heads its global tax practice. He co-founded District-based Washington Counsel, a tax lobbying firm that was bought by Ernst & Young in 2000.
Weinberger will step into his new role with extensive public policy experience, having served on the U.S. Social Security Advisory Board during the Clinton administration and worked at the Treasury under George W. Bush.
That insider knowledge of the government may come in handy as the auditing industry faces greater scrutiny from regulators in the aftermath of the global financial crisis.
Ernst & Young is battling a lawsuit filed by the New York attorney general in December 2010 for allegedly helping Lehman Brothers hide billions of dollars of liabilities. The company has vehemently denied the claim.
Analysts say the incoming chief executive will have to guide Ernst & Young through this tumultuous time and position the company to face heightened regulation. Capital Business recently spoke with Weinberger about his plans.
What is your vision for Ernst & Young?
One of the things I will focus on is empowering our 155,000-plus people around the world to continue to be relevant in this incredibly dynamic, economic and financial market uncertainty. We’ll help support our clients in working through that, work with regulators to help figure ways forward and grow our businesses. We are all in uncharted territory with what’s going on around the world and the regulatory environment. Being nimble and helping our clients navigate through that is going to be really important.
Are there any service offerings that you would like to further develop?
Assurance [auditing and accounting] remains the backbone of our firm; we want to continue to play an important role in the financial markets there. As increased transparency has been requested, increased diligence has been required by regulators and new requirements are enacted in various markets around the world, we need to continue to make sure we have the resources focused on that business.
Advisory is becoming very important to our clients as they navigate investing in emerging markets and dealing with all of the uncertainty. We’re helping them figure out how to improve performance, manage risk in new markets.
Tax [services] continues to be in high demand across the world. We are seeing the most prolific changes in tax laws as governments try to raise money to retire the debt that we all read about in Europe, the U.S. and elsewhere. We’re also seeing increased enforcement.
What lessons learned from your time in government will you apply in this new role?
Having to take difficult positions publicly, you learn to deal with all sides of an issue, listen to everybody to make an informed decision. Trying to get anything through the government bureaucracy, you really learn how to work with and influence people, pull them in and make them a part of the process. That thinking will carry over into my new job.
Increasingly the government and the private sector are intertwined. We’re seeing more regulatory activism, more of the effect of regulation on our clients post the downturn. And understanding why and how regulations are made, and having that mind-set, adds to my long history in the private sector.
Now that the head of Ernst & Young will be based in Washington, what impact will that have on the global structure of the company?
D.C. has incredible importance in our profession because the SEC (Securities and Exchange Commission) is here, the IRS is here and PCAOB (Public Company Accounting Oversight Board) is here.
I don’t believe where the chairman sits is going to change the direction of a firm. We have a great commitment to this area; we have a huge employment [base] through Maryland, Virginia and Washington, and we will continue to have that. I will continue to spend time with regulators here, but I will be in Hong Kong with their regulators, and in London and all around the world.