KPMG's leadership transition was initiated on June 5, after the decision by Eugene D. O'Kelly, 53, who has served as chairman and chief executive since 2002, to step down from that role in order to deal with a recent diagnosis of advanced stage cancer. Consistent with the U.S. firm's governance, deputy chairman Joseph Mauriello, 60, will also relinquish his position upon ratification of the new leadership team. Mauriello previously announced his intention to retire in 2006.
The firm's partnership agreement provides that the chairman and deputy chairman are elected jointly for a six-year term. Upon ratification, Flynn and Veihmeyer will serve until 2011. "This was unquestionably one of the most difficult career decisions of my life, but I knew that I was compelled to make a choice that was fair both to my family as well as the firm," O'Kelly told KPMG's 1,600 partners in a message today.
"I've concluded that I could not devote ample time to the demands of the firm while I was dealing with the time and energy that my recovery process will entail. I plan to remain a partner with KPMG," he said. "The KPMG LLP board of directors has chosen a strong new leadership team. I'm fully confident Tim Flynn and John Veihmeyer will continue the course that we have set over the last three years to guide the firm -- with a clear emphasis on 'performance with integrity' -- through one of the most challenging periods in the history of our profession," O'Kelly said.
Tim Flynn said, "As always, Gene O'Kelly acted with the utmost integrity. His choice to step down was obviously a very difficult and selfless decision. The thoughts and prayers of the entire KPMG family are with Gene and his family at this time. "We will pursue a path of meaningful change -- further building upon Gene's legacy of reform during a period of immense challenge for our profession and our firm. He brought about bold changes in KPMG's structure, culture and governance to meet these challenges," said Flynn. "We will rededicate ourselves to KPMG's three strategic priorities of quality, people and growth," said Veihmeyer. "We will continuously enhance quality through improving our risk architecture and further rebuilding professional credibility. KPMG will become a Partnership of Choice and an Employer of Choice by creating a rewarding environment for people to advance their careers."
During his tenure as chairman of the firm, O'Kelly is credited with bringing reforms aimed at restoring KPMG's professional credibility. One of his first actions involved separating risk management and quality oversight from the firm's business management activity to help ensure that its own risk management and quality functions were fully independent and objective. O'Kelly also initiated actions, beginning in 2002, reflecting significant changes in "tone at the top," particularly in the areas of organization and leadership, partner compensation, internal inspection program, client acceptance and continuance, independence, and communications from KPMG leadership to the firm. In addition, he succeeded in achieving resolution on a number of outstanding regulatory and legal matters for the U.S. firm.
Most recently, in January 2005, he brought U.S. District Judge Sven Erik Holmes to KPMG, in the newly created position of vice chair - legal affairs. Flynn said that the new leadership team would continue the reform moves that O'Kelly initiated. "As one of my first actions to further enhance the firm's governance, Judge Holmes' role will be elevated and he will report directly to me as chairman," Flynn said.
KPMG is dedicated to continuously improving audit quality, which is a strategic priority for the firm, by evolving the depth and breadth of its audits and through a structure, policies, and processes that continue to meet high levels of quality and integrity. KPMG fully understands the importance of strengthening the profession and the firm as it works toward fully restoring the public's trust in the capital markets, Flynn added.
Tim Flynn, 48, KPMG LLP chairman and chief executive, previously served as vice chair, Audit & Risk Advisory Services for KPMG LLP, and had operating responsibility for the firm's audit practice, as well as its risk advisory services and financial advisory services practices. Prior to that, he served as vice chair, human resources. He has also served as global managing partner - audit for KPMG International. As the global managing partner, he chaired the global audit steering group, and served as a member of the international executive team of KPMG International.
A 26-year veteran of KPMG, Flynn was elected to the partnership in 1988. Flynn is active as a member of the dean's advisory council within Villanova University's College of Commerce and Finance; the board of directors of the New York YMCA; and the finance committee at the Most Blessed Sacrament parish ( Franklin Lakes , N.J.). Flynn earned his bachelor's degree in accounting from The University of St. Thomas , St. Paul , Minnesota . He resides in Franklin Lakes , N.J., with his wife, Susan, and their two children, Laura and Tyler.
John Veihmeyer, 49, KPMG LLP deputy chairman and COO, was formerly the managing partner of KPMG's Washington , D.C. office as well as the mid-Atlantic area managing partner for Audit and Risk Advisory Services. In late 2003, he was elected to KPMG's board of directors and was named chairman of the KPMG Foundation. Veihmeyer joined KPMG in 1977 and was elected to the partnership in 1987. He previously served as the partner-in-charge of KPMG's audit practice in Washington/Baltimore and the lead SEC partner and professional practice partner for the mid-Atlantic area. He currently serves as the chair of the Cultural Alliance of Greater Washington , and serves on the Executive Committees of the Federal City Council and the Greater Washington Board of Trade. John is also a member of the board of trustees of Saint Mary's College in South Bend , Indiana .
Veihmeyer received his bachelor's degree in accounting from the University of Notre Dame. He is a member of the Maryland Association of Certified Public Accountants and the American Institute of CPA's. He lives in Potomac , Md. with his wife, Beth, and their three children, Bridget, Patrick, and Eileen.