The board of directors of KPMG LLP, the audit, tax and advisory firm, elected Timothy P. Flynn, 48, as chairman and chief executive, and John B. Veihmeyer, 49, as deputy chairman and COO.
The election is subject to ratification by the partnership in a vote expected to be completed by Friday, June 10.
Flynn, 48, previously served as vice chair, Audit & Risk Advisory Services for KPMG LLP, and had operating responsibility for the firm's audit practice, as well as its risk advisory services and financial advisory services practices. Prior to that, he served as vice chair, human resources. He has also served as global managing partner – audit for KPMG International. As the global managing partner, he chaired the global audit steering group, and served as a member of the international executive team of KPMG International.
Veihmeyer previously served as the partner-in-charge of KPMG's audit practice in Washington/Baltimore and the lead SEC partner and professional practice partner for the mid-Atlantic area.
KPMG's leadership transition was initiated on June 5, after the decision by Eugene D. O'Kelly, 53, who has served as chairman and chief executive since 2002, to step down from that role in order to deal with a recent diagnosis of advanced stage cancer.
Consistent with the U.S. firm's governance, deputy chairman Joseph Mauriello, 60, will also relinquish his position upon ratification of the new leadership team. Mauriello previously announced his intention to retire in 2006. The firm's partnership agreement provides that the chairman and deputy chairman are elected jointly for a six-year term. Upon ratification, Flynn and Veihmeyer will serve until 2011.
“This was unquestionably one of the most difficult career decisions of my life, but I knew that I was compelled to make a choice that was fair both to my family as well as the firm,” O'Kelly told KPMG's 1,600 partners in a message Wednesday.
“I've concluded that I could not devote ample time to the demands of the firm while I was dealing with the time and energy that my recovery process will entail. I plan to remain a partner with KPMG,” he said.
During his tenure as chairman of the firm, O'Kelly is credited with bringing reforms aimed at restoring KPMG's professional credibility. One of his first actions involved separating risk management and quality oversight from the firm's business management activity to help ensure that its own risk management and quality functions were fully independent and objective.
Flynn said that the new leadership team would continue the reform moves that O'Kelly initiated. “As one of my first actions to further enhance the firm's governance, Judge Holmes' role will be elevated and he will report directly to me as chairman,” Flynn said. KPMG fully understands the importance of strengthening the profession and the firm as it works toward fully restoring the public's trust in the capital markets, he added.
KPMG's future includes “further rebuilding professional credibility,” said Veihmeyer, and to continue to strive to be an “employer of choice.”
KPMG is dedicated to continuously improving audit quality, which is a strategic priority for the firm, by evolving the depth and breadth of its audits and through a structure, policies, and processes that continue to meet high levels of quality and integrity.
© 2005 SmartPros Ltd. All Rights Reserved. Reprinted with permission.