- EY has lost a contract to review Corrections’ procedures for dealing with sexual harassment complaints.
- The termination is in response to EY having to launch its own review, amid misconduct concerns from Fonterra about EY staff.
- Corrections will appoint a new provider to carry out the rest of the review.
Corrections has terminated a contract with corporate consultancy firm EY (formerly Ernst & Young) to carry out a review of its procedures for dealing with sexual harassment complaints, after EY was forced to launch its own misconduct review.
EY won a contract to carry out the Corrections review, instigated after allegations of inappropriate behaviour were made about several Corrections staff, some of whom held senior positions, a source told Stuff earlier this month.
But in March, Corrections sent EY a “please explain”, after reading on Stuff that a senior EY employee was promoted despite a complaint of sexual harassment against him, and after a review of workplace culture had been carried out.
Corrections received a detailed response from EY just over a week later.
Corrections has terminated a contract with consultancy firm EY to review its handling of sexual harassment complaintsSUNGMI KIM / STUFF
Corrections’ deputy chief executive – pae ora (healthy future), Juanita Ryan, said in a statement to Stuff that “at that time, we were satisfied with EY’s response to the specific questions we asked”.
“However, we were informed late Tuesday that EY would be commissioning a new independent review of behavioural misconduct complaints within their organisation.
“In light of this new information, we don’t believe it’s appropriate for us to continue to use EY’s services to conduct our own independent review into sexual harassment while at the same time they will be the subject of their own independent review.”
Ryan said Corrections met with EY on Wednesday to advise that its ongoing involvement with the review would be terminated.
How did it come to this?
Late last week Fonterra, EY’s biggest New Zealand client, confirmed to Stuff that it had contacted EY and requested that “any contractors subject to past or present investigations into misconduct be removed from Fonterra projects”.
The request came after an anonymous complainant raised concerns that “an EY contractor subject to complaints of misconduct may have been present in our premises”.
As well as asking for any implicated EY staff to stay away, Fonterra launched its own internal investigation.
Fonterra has banned some EY staff from its premises and launched an investigationRICKY WILSON / STUFF
On Monday evening, Stuff put questions to EY about Fonterra banning some EY staff from its premises, asking for its response including to concerns raised with Stuff about an “extraordinary drinking culture” involving EY staff on the Fonterra account.
On Tuesday morning, Stuff was leaked an internal EY email from Oceania talent leader Lauren Stanton, in which she said, “I know that it has been a challenging and confronting month for us all as we respond to reports of historical misconduct at EY New Zealand”.
She said EY would be launching a new review of misconduct complaints over the past five years.
In a statement later that day, EY managing partner Simon O’Connor confirmed the review and said EY’s partners and clients were also advised of it on Tuesday.
That’s when Corrections learned the company it had contracted to review its sexual harassment procedures was conducting a second review of its own misconduct procedures.
A previous review, described by O’Connor as “the most comprehensive review of workplace culture ever undertaken in the New Zealand professional services industry”, was released in July 2023.
Why the turnaround from Corrections?
When Corrections asked EY for the “please explain”, EY responded with a four page letter outlining why it believed it deserved to keep the Corrections contract. Corrections has released that letter, from O’Connor, and EY Engagement Partner Pip Best, to Stuff.
It explains that after the independent review by Elizabeth Broderick & Co, which explored bullying, sexual harassment, racism, psychological safety and the impact of workplace demands on the wellbeing of EY staff, the company realised that in some critical areas “we have fallen short of the standard EY people have a right to expect”.
The letter says EY had made “strong progress in addressing more than half of [the review’s] 27 recommendations”.
“Ultimately, our progress is measured in enhancing the lived experiences of our people. This is represented in the way we listen and respect our people of diverse backgrounds and experiences, the behaviour of our leaders, and in new initiatives to improve…psychological and physical safety.”
It stated that the departure of EY chair Braden Dickson in February “demonstrates our willingness to take action against individuals who don’t meet the high standards of conduct and behaviour that we expect from our people and partners”.
Former EY NZ chair Braden Dickson left the company in February after an investigation into an historical behavioural matterSTUFF
However, the events of this week have seen that reversed.
“It is really important to us that we get this review right to ensure we’re doing everything we can to prevent sexual harassment from happening in the workplace,” Ryan said.
“We will be appointing a new independent external provider to carry out the remainder of the review.”
In a statement on Wednesday night, O’Connor confirmed Corrections would “transition its sexual harassment review to another independent consultant”.
“We understand the Department of Corrections’ position and will support the department with its transition as it continues this important work.”
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