For Timothy P. Flynn, chairman of the global accounting firm KPMG, ethics and integrity are not just boilerplate language in the company mission statement.
Flynn, who was on campus as part of The 2007 Wharton Ethics and Leadership speaker series, became CEO of KPMG's U.S. partnership in 2005, just as former partners were being indicted for allegedly creating $2.5 billion in fraudulent tax shelters. "When I took over, it was a very challenging time for the firm," he said. "There was a very real possibility that the tax situation could threaten our very existence."
Flynn had to calm clients, regulators and employees, but he said the initial step was to confront the problem. "We had to make a lot of tough decisions, but first we had to admit we had people who did things that were wrong." The firm settled a government charge against it for $456 million. Three former partners and an outside KPMG lawyer are set to stand trial in the case in U.S. District Court in New York next year. Charges against 13 other partners were dropped after a judge ruled that prosecutors interfered with their right to counsel. The government is appealing that decision.
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