EY has come under fire from its own workforce for allowing a partner to retain his job after sexually harassing a junior female colleague on a company ski trip, according to reports.
The accounting giant told staff it would do more to tackle inappropriate behaviour, following the case of Neil Hutt, a transactions partner who resigned on Friday, in a company-wide webcast on Tuesday, according to the Financial Times, which first reported the news.
UK chair of EY Hywell Ball reportedly also announced the establishment of a new ethics oversight committee on Tuesday which, although independent, he would chair.
The Big Four firm suffered “a particularly difficult week” Ball admitted in an email to staff, according to the Financial Times. Following the publication of a disciplinary hearing’s findings, which in July found Hutt guilty of misconduct, EY has been under “intense internal and external scrutiny.”
But the company’s efforts may have backfired. Some EY staff reportedly called the webcast “cringeworthy,” “complete hot air,” and said it demonstrated “how disconnected [EY’s leadership] are from reality,” according to the Financial Times. Some suggested the latest announcements by the accountancy were only made because of of the pressure of publicity.
Hutt, who was employed by EY for 16 years, was found to have behaved in an “obscene and aggressive” manner, by a disciplinary hearing into the 51-year-old’s behaviour at an annual company trip in January 2019.
He made a series of lewd comments to a female junior colleague including interrupting a conversation during lunch to tell her: “What are you doing this afternoon? Because I’m going to **** you. And then I’m going to **** [another colleague].”
“I’ll be bashing you from behind this afternoon,” Hutt told the female trainee.
EY described the incident as “serious” and handed Hutt a £75,000 fine, but stopped short of striking him off even after the UK’s professional body for accountants in July found Hutt guilty of misconduct.
His comments to the junior female colleague “amounted to an abuse of his position and power,” said Rosalind Wright QC, who chaired the disciplinary tribunal, in a judgement published this month.
But the Institute of Chartered Accountants in England and Wales (ICAEW) ultimately deemed there would be no risk of Hutt repeating his behaviour and fined him £11,900 without removing him from the professional register.
After an internal company investigation in which Hutt said he had “taken a joke too far,” EY allowed Hutt to stay in his position after he agreed to attend training on diversity and inclusiveness.
The female trainee described the internal investigation process, which took place one month after the incident, as “uncomfortable and embarrassing” as she was forced to repeat Hutt’s remarks to senior EY colleagues.
The investigation panel were told “increasing rumours around the office had left her feeling isolated and publicity about the incident had significantly increased her embarrassment and shame to the extent she had found it difficult coming into work.”
“As the ICAEW notes this was a serious incident which we investigated thoroughly and resulted in EY imposing sanctions,” an EY spokesperson said last week in a statement.
The accounting giant has since reportedly said it will review its disciplinary process and sanctions for staff and partners, and set up an anonymous feedback channel.
But it is not the first time the Big Four firm has hit headlines for its handling of sexual harassment cases.
An ex-EY partner in the firm’s North Carolina offices, Karen Ward, filed a complaint in 2018 accusing a former boss of sexually harassing her by complimenting her breasts, asking her to join him at strip clubs and texting her at 2am to meet for drinks during a work trip. She was dismissed by EY and in 2019 Ward claimed she had been forced to spend $185,000 just to have her case heard in court, but EY denied the allegation and said Ward was separated from the company after they decided to close the small real estate investment banking advisory practice she had been leading.