4. Governance impacts

4.1 Quality of services

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Impacts

High quality audit and advisory services are imperative to our licence to operate. Without high levels of quality, we would be unable to make an impact on our clients and society. To this end, Quality of services is an important focus area in our Connect for Impact strategy.  

Providing social trust by delivering high quality services is crucial for the functioning of reliable economic and social ecosystems, such as financial markets. Hence, our quality ambitions are closely linked to SDG16 (Peace, justice and strong institutions) and are part and parcel of our Connect for Impact strategy. Failure to deliver high quality services to our clients can lead to major economic damage and fines and ultimately, to a loss of social trust in our firm.

We believe the path to undisputed leadership in quality is through high consistent quality of our service delivery, our people and of our unique and integrated transformation solutions. The only way to create this is through differentiation. Differentiating on quality goes beyond technical quality and asks for unique propositions delivered in Deloitte’s own unmatched multidisciplinary model. Through our client work we want to have a tangible impact on the key societal challenges in the Netherlands. The societal challenges are translated in the ‘Future of’ themes. We build multidisciplinary products and services around the ‘Future of’ themes through which we are able to bring our combined knowledge to the market and make impact.

To be leading in quality also presents an opportunity. By being known for high quality services, we are able to generate more business and become a preferred supplier of professional services to our clients. This is also instrumental for maintaining and protecting our Deloitte Brand.

Governance

Our ambition to be the undisputed leader in professional services goes beyond mere volume of our business and includes to be leading in audit and advisory quality, the impact we make, and the position we have in the minds of our clients, stakeholders and people.

We have an overarching system of quality control that is currently being enhanced through the implementation of the international quality management standard ISQM1. In addition, we have established a differentiated model around our central commitment to quality that has enabled our success. To achieve our business aspiration to become the undisputed leader and really differentiate on quality, we have initiatives across the different elements of our quality model. Progress on these initiatives is being measured based on a set of (strategic) KPIs.

Activities in 2022/2023

We continued to build trust in the financial reporting ecosystem by being at the forefront of Audit and using Deloitte’s broad and deep advisory expertise in increasing the relevance of our audits, for example in ESG, cyber, fraud, continuity, non-financial information and analytics. The developments around ESG bring many challenges to our clients, both in audit and our advisory business. In the near future, new legislation will bring more external reporting requirements for many companies, and audit requirements are increasing on this kind of information. We are constantly preparing to be able to help our clients to comply with new regulatory requirements.

For our Advisory Businesses, MDM is and remains the preferred strategy for serving clients, bringing together unrivalled breadth of capabilities and increasing seamless collaboration across all businesses to provide unique propositions across our designated growth platforms. It is a top priority to deliver the quality that both clients and society expect from us in these large and complex end-to-end transformation engagements. In order to guarantee the quality on these complex transformation engagements we have an active monitoring programme in place where periodic in-flight reviews are performed during engagement performance and additional risk mitigation is taken if needed. In this year we have further strengthened the monitoring of high risk engagements, to make sure that the proper measures are taken to ensure these engagements deliver the quality that is expected. Besides that, we closely measure and monitor the client satisfaction scores.

It all comes down to Connect for impact, our call to action and an essential part of the success of our Deloitte strategy. This is more than connecting with clients, partners or suppliers. It also means the connection between our people. At many of our large clients, we provided services from more than one business line. To further improve our collaboration, we are moving towards an allocation system that stimulates collaboration between service lines, implemented enhanced training of our Lead Client Service Partners and their account teams, and further increased collaboration between service lines through our MDM platforms.

To strengthen partner career management and development, we have rolled out the Partner Life Cycle programme. This programme targets career stages and role/succession development and is catered to fit personal needs. We provide necessary and optional learnings, conversations and guidance to grow into, and successfully transition to different partner roles.

Results

Progress on our initiatives is being measured based on a set of (strategic) KPIs (see page 2).

Public policy

Deloitte NL has a centrally coordinated public policy programme in place that supports our organisation in the execution of our strategy and protecting, preserving, and enhancing the Deloitte brand and reputation. With our Public Policy programme, we aim to influence policy developments that could affect our business. Additionally the Public Policy team participates in policy discussions focused on some of today’s most important socio-economic challenges, helping to inform the policy debate and bring clarity to the interconnected challenges facing the world.

We have comprehensive relationship management plans in place for key stakeholders such as NBA, Kwartiermakers, and Members of Parliament and Cabinet. Last year, the Public Policy team focused on engaging with political stakeholders on key themes such as work, financial health, digital and sustainability. Our key policy focus areas include reporting of Environmental, Social and Governance (ESG) information , underscoring diversity equity and inclusion, measuring social progress, and informing the future of regulation in an era of exponential technological advancement, including artificial intelligence. By sharing our knowledge, insights and vision on current and societal issues, we want to take our responsibility and contribute to a strong and sustainable economic future.

We also continued our active stakeholder engagement in relation to Tax and Audit, strengthening relationships with members of parliament. In addition, we maintained an open dialogue on the future of the audit with Kwartiermakers, NBA and regulators. Besides maintaining strong relationships with our key stakeholders, we play an active role in the working groups from the NBA / Kwartiermakers.

4.2 Ethics and integrity

Impacts

Ethics and integrity are deeply embedded in Deloitte’s culture. Our ethics programme works to build trust in our professions and among our professionals, strengthen our reputation and relationships with stakeholders, minimise ethical risk, and help all of our people make the best professional choices.

Deloitte Shared Values

Our NSE Code of Conduct sets out our DTTL Shared Values and Global Principles of Business Conduct. These are critical to our reputation and continued success, and are embedded in everything we do: how we serve clients, how we direct our businesses, how we work together and how we contribute to society. Fundamentally, the reputation of our firm rests on the personal ethics of every Deloitter.

Governance

There is an appointed Ethics Leader in the Netherlands, who is responsible for helping our professionals and leaders in our firm to understand what is expected of them, ensuring that they comply, and seeing that there are appropriate consequences for ethical lapses. The Ethics Leader helps our leaders to set an ethical tone at the top and to build a culture of integrity. Communication is key to building a consultative and “speak up” culture.

The Ethics team consists of an appointed Ethics Leader, a Deputy Ethics Officer, five confidential counsellors and two Ethics Team members. The Ethics Leader is supported by the Deputy Ethics Officer, who also assists the NSE Ethics Leader in delivering a consistent ethics strategy within NSE. The independent investigator collaborates with the Ethics Leader and Deputy Ethics Officer in the field of incident management on regular request. The team of three internal confidential counsellors (‘vertrouwenspersonen’) has recently been expanded by two external confidential counsellors. The confidential counsellors are tasked with being the first point of contact for reporters, guidance during the process and aftercare, and have a duty of confidentiality according to the law. Two ethics team members are mainly responsible for creating awareness through training and communication around ethics within the organisation to enhance our Speak Up culture.

Employees, suppliers, business relationships, and other parties can also file a report - if they wish anonymously - using Deloitte Speak Up, our 24/7 system that is run by an independent party.

Twelve ethics ambassadors (partners and directors) in our businesses help to broaden the scope of the ethics programme, reaching out to all partners and Deloitte professionals, acting as linking pin between the business and the ethics team, and promoting our core values at a business level. On a periodic basis, the NL Ethics Leader reports on ethics issues and trends and the progress on the ethics programme to the NL Executive Board and NL Supervisory Board.

Activities in 2022/2023

In 2022/2023, the ethics team started training all directors in ethical leadership by facilitating the in-person Masterclass Ethical Leadership. Purpose of the training is to emphasise the importance of setting an ethical tone at the top and building and maintaining a culture of integrity in their new leadership role. Newly promoted partners have attended - or will attend - the ‘Leading with Integrity workshop’, an interactive two-hour session that is delivered across the Deloitte network to all our partners around the world to help them drive consistency in the way they lead and build our Deloitte culture. Furthermore we organised dialogue sessions within our offices to facilitate the conversation with our partners and employees about ethical and unethical behaviour, what we expect from each other and the channels to report concerns.

From June to September 2022, we measured the effectiveness of the ethics programme through our annual voluntary ethics survey. 22% of our partners and employees across businesses responded to the survey.

The survey results show the following trends compared to previous surveys:

• Our people find Deloitte an ethical place to work and have more trust in our investigation process;

• The awareness of almost all ethics programme elements increased;

• More misconduct has been observed/experienced and also an increased number of people did not speak up;

• An increased number of people do feel that most reports were addressed and have less fear & experience of retaliation;​

• The belief that ethical leadership as a subject is recognised increased noticeably.​

Results

Although the survey results turned out that an increased number of people who observed or experienced misconduct did not speak up, we see a strong increase in the number of reported incidents in 2022/2023 related to previous years (a total of 135 in 2022/2023, compared to a total of 94 in 2021/2022 and 64 during 2020/2021). We cannot be sure about the exact explanation, but we believe that the increased number of ethics awareness sessions within Deloitte, mainly organised in the period from September 2022 – May 2023, combined with the media attention for unethical behaviour in our society, contributed to the willingness of our people to consult. We assume that returning to the office after COVID and associated informal meetings with colleagues and our growing organisation also generates an increased number of incidents.

Table 12: Incidents: number of reported occurrence

Related to last year, we see a strong uptick in the number of reported incidents in 2022/2023 (+40%), in particular the number of cases related to sexual harassment, and respect and fair treatment has increased. There can be several plausible reasons for this. Our growing organisation, the media attention for unethical behaviour in our society, and returning to the office after COVID and associated informal meetings with colleagues, are all believed to contribute to an increased number of reports. Furthermore, the continuous attention for ethics and integrity in the business through communication and various awareness sessions, are likely to have a positive effect on the willingness of our people to consult.

In 2022/2023, no incidents of corruption were reported through our internal reporting systems. In parallel, no legal cases were brought forward implicating Deloitte in any (alleged) incident of corruption.

Going forward

Our Ethics Operational Plan 2023/2024 has been updated, based on the number and nature of the ethics incidents and results of our ethics survey (see above). Main priorities are:

• We need to further stimulate our Leaders to be role models for integrity and we have to facilitate our Leaders to put ethics regularly on the agenda and to address unethical behaviour directly;

• We have to ongoingly create trust in our reporting process and mitigate (the risk of) retaliation;

• We must continue creating awareness of our ethics programme and reinforce a strong “speak-up” culture.​

Anti-corruption

Anti-Corruption has always been part of Deloitte’s ethical principles. We are against corruption in all its forms and want to contribute to good governance, economic development, and the improvement of social welfare wherever we do business. ​​Anti-Corruption is fully implemented in our policies, procedures and guidelines. Next to the global policies, Deloitte Netherlands also has to comply with the NSE Anti-Bribery and Corruption policy and applicable legislation.

The Anti-Corruption programme strategy and objectives are determined by our Anti-Corruption Committee and the progress of our operational plan is regularly discussed within this committee. Members of this Committee are all subject matter experts and relevant stakeholders of the Anti-Corruption programme. Together with our Reputation & Risk Leader, the Committee is responsible for actively overseeing the Anti-Corruption programme.

In 2022/2023, we have further enhanced the collaboration within the three financial crime pillars being anti-corruption, anti money laundering and sanctions/trade controls.

Our fully implemented and comprehensive Anti-Corruption Framework consists of seven different elements that mitigate the risk of corruption within Deloitte and supports our employees and partners with guidelines to report corruption if needed. These elements include: Governance, Policies, procedures and guidelines, Training & communications, Risk assessment, Testing & monitoring, Third party due diligence, Consultation, and Incident response and investigations, for which we have the ethics reporting channels in place.

We have launched the Financial Crime e-learning in October 2022 in order to remind our partners and employees of expectations related to anti-corruption and financial crime compliance, how to identify potential corruption and financial crime risks, and how to address these risks.

4.3 Data security

Impacts

Companies gather a considerable amount of data. Making sure that data is safe, is an onerous task. We use the data from our clients to deliver our services and support them in more inclusive and responsive decision-making. Our clients will only trust us with their data if they are convinced that their data is secure with us. The prevention of data leakage is therefore a top priority as data leaks can harm our clients, and our reputation as a trusted business partner, and lead to significant monetary fines and loss of turnover. 

Apart from being a risk, data security is also an opportunity for us. We help our clients with their digital transformations and have developed services to identify and manage their data, infrastructure and cyber risks, and keep their systems free from unwanted interference.

Governance

In order to safeguard and address Deloitte’s privacy compliance, strategy and governance, a privacy policy is implemented and a dedicated Privacy Office that is part of the Reputation & Risk Leadership Office is in place. The Privacy Office is – among other responsibilities – tasked with examining privacy aspects of processes and systems through our internal Data Privacy Impact Assessment (DPIA). In addition, Deloitte has selected Privacy and Cyber Champions both within our business and in our Support Organisation. These champions are trained to be the first line of defence in the organisation concerning privacy and confidentiality aspects that arise within the business. By making use of Privacy and Cyber Champions, Deloitte creates privacy and security awareness within the organisation. Having the Privacy and Cyber Champions as the first line, the Privacy Office as the second line, the Data Protection Officer as the third line of defence, and a robust internal audit Member Firm standard programme in place, enables Deloitte to operate in a privacy and GDPR compliant manner. Lastly, Deloitte organises a quarterly “Privacy committee” in which multiple key topics regarding privacy and confidentiality are discussed at a high level. Examples are the privacy strategy, trends and other possible attention points.

New Global tools and vendors go through an extensive Data Risk Assessment Service (DRAS) to provide NSE privacy and confidentiality Subject Matter Experts (SMEs) all the information needed for their approval or non-approval. Local software tools and vendors are assessed through the Global Technology Operating Model (GTOM) process, meaning all relevant SMEs will review the application in one meeting from a privacy, security and IT perspective. This way Deloitte only cooperates with vendors that ensure the same level of data protection and confidentiality as Deloitte.

New Assets that Deloitte develops for clients go through the Certify to Sell process which also includes privacy, confidentiality and security assessments. Moreover, to ensure employees operate in a privacy and confidentiality minded manner, privacy and security awareness is at the top of Deloitte’s training agenda. This is reflected in the “Secure the Future” privacy & security training that all employees must complete.

Deloitte Group Support Center is ISO 27001:2013 certified. Conformity with this standard means that we have put an information security management system (ISMS) in place to manage risks related to the security of data owned or handled by Deloitte, and that this system repects all the best practices and principles enshrined in this International Standard.

Deloitte follows a well-defined data breach procedure in order to adequately address any data breach.

Activities and results in 2022/2023

In 2022, we became ISO 22301 certified.  This is the international standard for Business Continuity Management (BCM). This framework helps us to prevent, prepare for, react and recover from disruptive incidents.

Despite our efforts, in 2022/2023, 60 incidents were internally reported of which 33 concerned personal data incdidents. We received no complaints regarding breaches of client privacy or loss of customer data. In two instances, we notified personal data breaches to the supervisory authority in conformity with the legal requirements of the ‘Wet meldplicht datalekken’ (Law on mandatory reporting of data leaks).

4.4 Innovation

Deloitte has always taken innovation seriously. To help our clients to stay at the forefront of innovation, even in 2007 Deloitte Netherlands had set up its separate, central Innovation department. Over the past years, innovation has grown in importance and our innovation professionals work in multiple teams to help Deloitte and our clients to innovate. We believe that innovation starts with insight and seeing challenges in a new way. We believe that our expertise breadth and scale, combined with passion for business challenges, make a powerful combination that help our clients to stay ahead of change, at the same time as creating an impact that matters.

Deloitte Center for the Edge

Deloitte Center for the Edge partners with CEOs and senior executives to make sense of and profit from emerging opportunities on the edge of business and technology. We actively initiate dialogue between business leaders in a small and safe setting and help leaders understand the fundamental changes shaping the world, navigate the short-term challenges and identify long-term opportunities. Center for the Edge, anchored in Silicon Valley with teams in Australia and Europe, conducts original research and develops substantive points of view, organises exclusive sessions, and leverages an ecosystem of partners for new corporate growth.

Deloitte Monitor Innovation

Through a combination of design, strategy, social science, and technology, Monitor Deloitte works to unearth new opportunities and drive transformational growth for our clients. We help our clients to set innovation strategy, design, build, and launch innovations while becoming better innovators. We do this by using applied design methods to ensure people are always at the centre of every solution.

Deloitte Greenhouse

Deloitte Greenhouse is an innovative environment that changes the way Deloitte clients solve their business challenges. By taking participants outside of their everyday environments, Greenhouse LAB sessions disrupt conventional thinking, spur creativity, bring about new perspectives, and lead to tangible solutions.

Deloitte Innovation B.V.

Inspired by fast shifting client needs, and the need for new knowledge and skills, Deloitte set up its Innovation department in 2007. Back then Deloitte Innovation B.V. was mostly known for accelerating and incubating new corporate ventures within Deloitte. Today, however, besides offering diverse programmes and incubating new businesses, Deloitte Innovation focuses on building new knowledge and capabilities in the fields of Artificial Intelligence , Blockchain  and Quantum Computing .

Activities in 2022/2023

Over the last year we have seen an unprecedented rise in technologies that are changing the way we work and interact. To advise and support our clients to navigate in this fast-paced digital landscape, it is essential that Deloitte stays at the forefront of technological advancements. To achieve this, we have performed many activities of which we provide some examples below:

• Via the ‘School for Innovation’, we trained hundreds of colleagues on innovative topics like artificial intelligence, blockchain, virtual/augmented reality and Quantum Computing. 

• Our successful "Masters of Digitalism’ campaign enticed more than 900 colleagues to explore the possibilities of Generative Artificial Intelligence, leading to a whopping 23.000 digital creations.

• Our article on quantum & crypto became one of the best-read articles on Deloitte online.

• We funded multiple teams to develop new (high-tech) offerings and assets. We professionalised our Asset Engineering team to build more, and better assets, and our Asset Support team helps new assets to conquer (global) markets faster.

• On a more local level we trained Group Support colleagues in Robot Process Automation (RPA) to build dozens of admin (ro)bots that aim to reduce workload and improve quality. And ‘Toolbox’ became the place for colleagues to find the best software tools available. 

• And finally, we opened an ultramodern TV Studio with professional crew, to improve the (hybrid) interaction with our clients and colleagues, and to make a lasting impact that matters.