Wednesday, April 10, 2013
There is no greater danger than when an employee breaches the fundamental trust a company must maintain with customers. It is especially threatening when the company is defined by that trust. This is the challenge facing KPMG, the international accounting firm, who just fired a partner and gave up two audit clients because the partner was leaking client information to a stock trader. One can hear the gnashing of teeth among other partners who would not think or ever consider doing such a thing. Confidentiality is at the heart of public accounting. That one would breach it is as serious as a lawyer divulging client secrets. KPMG now has a public relations nightmare, which it will have to handle over the coming days. It has done the right thing in dismissing the partner and publicly condemning his actions. The only question is how quickly it acted once it became aware of what was happening. It will be to the firm's credit if it moved at once. It will also be to the partnership's benefit if it conducts a communications campaign internally to reinforce its commitment to client confidentiality. And, it owes its former audit clients a make-good for the withdrawn work. One person can create chaos with acts of stupidity.