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Network arrangements

EY is a global leader in assurance, tax, transaction and advisory services. Worldwide, 231,000 people in member firms in more than 150 countries share a commitment to building a better working world, united by shared values and an unwavering commitment to quality, integrity and professional skepticism. In today’s global market, EY’s integrated approach is particularly important in the delivery of high-quality multinational audits, which can span multiple jurisdictions.

EY’s central entity, EYG, coordinates the member firms and promotes cooperation among them. EYG does not provide services, but its objectives include the promotion of exceptional, high-quality client service by member firms worldwide.

Each member firm is a legally distinct entity. Their obligations and responsibilities are governed by the regulations of EYG and various other agreements.

The structure and principal bodies of the global organization during the year ended 30 June 2016 are described below. They reflect the principle that EY, as a global organization, has one shared strategy.

EY streamlined its operating model by creating the Executive and the Regions. The Executive includes the Global Executive (GE), its committees and teams, and the leadership of the four Areas. This streamlined structure allows EY to further enhance its global scale and the delivery of consistent exceptional client service worldwide, with the Executive responsible for one global approach to strategy, quality, risk management, business planning, investments and priorities.

At the same time, this operating model allows for greater stakeholder focus in the 28 Regions, permitting member firms to build stronger relationships with clients and others in each country and be more responsive to local needs.

Global Governance Council
The Global Governance Council (GGC) is the main oversight body of EYG. It comprises one or more representatives from each Region, other member firm partners as at-large representatives and six independent non-executives (INEs). The Regional representatives, who otherwise do not hold senior management roles, are elected by their RPFs for a three-year term, with provisions for one successive reappointment. The GGC advises EYG on policies, strategies and the public interest aspects of their decision-making. The approval of the GGC is required for a number of significant matters that could affect EY. Independent non-executives

Independent non-executives (INEs) are appointed from outside EY and bring the global organization, and the GGC, the significant benefit of their varied perspectives and views. The INEs also form a majority of the Public Interest Sub-Committee of the GGC, which addresses public interest matters including stakeholder dialogue. The INEs are nominated by a dedicated committee.

Global Executive
The GE brings together EY’s leadership functions, services and geographies. It is chaired by the Chairman and CEO of EYG and includes its Global Managing Partners of Client Service and Business Enablement; the Area Managing Partners; the global functional leadership for Talent and Finance; the leaders of the global service lines — Assurance, Advisory, Tax and Transaction Advisory Services; the Global Leader for Public Policy; and one EYG member firm partner on rotation.

The GE also includes the Chair of the Global Accounts Committee and the Chair of the Emerging Markets Committee, as well as a representative from the emerging markets practices.

The GE and the GGC approve nominations for the Chairman and CEO of EYG, and ratify appointments of the Global Managing Partners. The GE also approves appointments of Global Vice Chairs. The GGC ratifies the appointments of any Global Vice Chair who serves as a member of the GE. Furthermore, the GE appoints Area Managing Partners and approves appointments of Regional Managing Partners. The appointments of the Area Managing Partners are subject to ratification by the GGC.

The GE’s responsibilities include the promotion of global objectives and the development, approval and, where relevant, implementation of:
  • Global strategies and plans
  • Common standards, methodologies and policies to be promoted within member firms
  • People initiatives, including criteria and processes for admission, evaluation, development, reward and retirement of partners
  • Quality improvement and protection programs
  • Proposals regarding regulatory matters and public policy
  • Policies and guidance relating to member firms’ service of international clients, business development, markets and branding
  • EY’s development funds and investment priorities
  • EYG’s annual financial reports and budgets
  • GGC recommendations
  • Any other proposal that supports the global objectives
It also has the power to mediate and adjudicate disputes between member firms.

GE committees
Established by the GE and bringing together representatives from the four Areas, the GE committees are responsible for making recommendations to the GE. There are committees for Global Markets and Investments, Global Accounts, Emerging Markets, Talent, Risk Management, Assurance, Advisory, Tax, and Transaction Advisory Services, and there is the Global Audit Committee.

Global Practice Group
This group brings together the members of the GE, GE committees and Regional leaders. The Global Practice Group seeks to promote a common understanding of EY’s strategic objectives and consistency of execution across the organization.

EYG member firms
Under the regulations of EYG, member firms commit themselves to pursue EY’s objectives, such as the provision of high-quality service worldwide. To that end, the member firms undertake to implement the global strategies and plans, and to maintain the prescribed scope of service capability. They are required to comply with common standards, methodologies and policies, including those regarding audit methodology, quality and risk management, independence, knowledge sharing, human resources, and technology.

Above all, EYG member firms commit to conducting their professional practices in accordance with applicable professional and ethical standards and all applicable requirements of law. This commitment to integrity and doing the right thing is underpinned by EY’s Global Code of Conduct and EY’s values.

Besides adopting the regulations of EYG, member firms enter into several other agreements covering aspects of their membership in the EY organization such as the right and obligation to use the EY name and the sharing of knowledge.

Member firms are subject to reviews that evaluate their adherence to EYG requirements and policies governing issues such as independence, quality and risk management, audit methodology and human resources. As necessary, special focus reviews are performed to address situations or concerns as they arise. Member firms unable to meet the quality commitments and other EYG membership requirements may be subject to separation from the EY organization.