E&Y to Appoint Non-Executive Directors to Global Advisory Board

Ernst & Young announced that it will appoint four non-executive directors to its global advisory board after the summer. It will be the first time an accounting firm will have a board structure similar to those governing multinational companies.

The move comes after the U.K. Financial Services Authority issued a code this year that demanded accounting firms appoint non-executive directors for their U.K. businesses who would monitor the performance of managing executives, strategy and reputational risks. According to the Financial Times, E&Y is the first of the big four firms to announce plans for non-executive directors and the only one expected to exceed the UK audit code.

"Although the code technically applies only to our UK business, as a globally integrated organisation, we believe it is most appropriate for us to implement the code's provisions on a global basis also," Jim Turley, chairman and chief executive of E&Y, told the Guardian.

The four non-executives come from regulatory, business and academic backgrounds. The Global Advisory Council currently includes 36 partners and monitors the company’s performance and risks. It will also decide if E&Y auditors should blow the whistle on irregularities in client audits.

According to the Guardian, KPMG intends to recruit four independent directors to its European business around the end of September and PricewaterhouseCoopers plans at least three new appointments to its newly created third board, the public interest body, in the next few weeks. Deloitte is in the process of identifying three non-executive directors for its UK firm.