Executive Board highlights, lessons learned and outlook

2023/2024 has been marked by continued geopolitical tensions, economic volatility, rapid digital transformation and an evolving ESG and regulatory agenda. This uncertainty has reshaped our clients’ investment decisions, leading to a tougher consultative market. Against this more challenging backdrop, we have pursued an ambitious strategic agenda. By investing in the opportunities around Generative AI and by fundamentally transforming the way we deliver our services to better support our clients, we hope to reshape the way we do our business over the next three years. We have started to integrate parts of our businesses across Europe and prepared the adoption of a global common storefront to organise our capabilities and go-to-market. Furthermore, the ongoing investigation into answer sharing continued throughout the year. Altogether, this has been a transformative year during which we have seen exceptional commitment and collaboration from our people and partners alike.

Five years ago, we set out to become more purpose-led, sustainable and inclusive. To become the market leader in the Netherlands, involved in the most impactful transformations and providing trustworthy audits, and a place for talent to develop. This year, we have expanded on this and sharpened our strategy for the upcoming years. Our direction has not changed, our ambition is simply bolder. We want to truly differentiate ourselves in the value we deliver to our clients, to be in a ‘category of one’. It’s why we are focused on leveraging our local strength while maximising our international potential and drive transformations using advanced technology and alliances. We aim to offer integrated propositions as our clients’ trusted long-term partner and innovate how we deliver value. This closely aligns with our Global and North South Europe (NSE) strategy, which focuses on greater integration to increase the impact of our services, drives quality outcomes, and improves our efficiency.

What will contribute to executing our strategic agenda is the global adoption of a common storefront, modernising and simplifying how we organise our capabilities and go to market. We are aligning our capabilities into four business units: ‘Audit & Assurance’, ‘Tax & Legal’, ‘Strategy, Risk & Transactions Advisory’ and ‘Technology & Transformation’. It will enable us to deliver more seamless integrated solutions to our clients across our offerings and geographies, to better support them in tackling the most complex challenges. It also emphasises the strength and resilience of our multidisciplinary model.

Embedded in our purpose-driven strategy is the conviction that we can make the largest societal impact through the work we do for our clients, both in audit and advisory. An example of this is the work we do with our Ministry of Defence and NATO to support them in preparing for a new reality. The threat landscape is fundamentally different compared to a few years ago, making it necessary for our national defence organisation to scale up to protect our values, equal rights and freedom. As part of the Dutch society, we feel both the obligation as well as the ambition to contribute to increasing the resilience of the Netherlands. We are doing so by working on optimising the digital and operational readiness of our defence force. 

We also maximise our societal impact by orchestrating change through collaboration within our ‘Future of’ themes, focused on specific societal challenges and the underlying drivers that create a more sustainable society. One of our ‘Future of’ themes is Energy, and this past year we launched the Energy Transition Monitor, which provides a comprehensive view on the current progress of the energy transition in the Netherlands. We have noted an increased focus on ESG and CSRD regulations as a prominent part of the agenda, both for our clients in audit and in advisory. Over the past year, our work has focused on providing reliable and transparent measurements, insights and reporting. We also support regulators to clarify guidelines and develop standards. Going forward, we increasingly focus on supporting our clients to identify actionable insights and the implementation of these actions, and to partner with our clients on large strategic sustainable transformations. An integrated approach to sustainability is essential, and our multidisciplinary model embeds sustainability expertise throughout our organisation to reinforce this.

Another strong focus is to remain at the cutting edge of new technology. We have been fully embracing the opportunities that Generative AI offers and helped our clients to explore and capture its value. This past year, we have set up AI competence centres and support our clients in moving past a proof of concept and approach Generative AI as a strategic transformation. This has strengthened our positioning as their long-term partner in GenAI, and in doing so, applying our ‘Trustworthy AI’ framework to make sure GenAI is used in an ethical and sustainable manner. This framework helps organisations to develop ethical safeguards across seven key dimensions (transparent and explainable, fair and impartial, robust and reliable, respect for privacy, safe and secure, and responsible and accountable). ​Besides being used in our work for clients, GenAI is also part of our own transformation agenda, and a key element in how we transform our own service delivery. Collaborating with our Global organisation, we have invested both in the development of several platforms as well as in our own people becoming fluent in using GenAI. Within Deloitte Netherlands, we have launched ‘Headstart’, our generative AI model that promotes responsible use of AI within our organisation. Privacy, information security and quality are guaranteed, making it safe to use. Headstart has been successfully adopted with a consistent use of the platform by approximately 5,000 colleagues each month across our organisation.

With regards to our broader strategic ambition within our North South Europe (NSE) firm, we have been on a journey to operate across our 30 NSE countries in a more integrated way. This year we have focused on simplifying and streamlining our operating model in specific cross-border businesses, such that we are better able to serve both our domestic and international clients, whilst adapting to changing markets and talent expectations.

Last year, in light of national and international events, the Dutch Authority for the Financial Markets (AFM) has requested insights from several Dutch audit firms, including Deloitte Netherlands, regarding improper answer sharing, their learning culture and behaviours. This request has initiated a comprehensive investigation into all mandatory internal and external learning activities of our Dutch organisation. The Steering Committee of this investigation is co‑chaired by the Chief Quality Officer and a Supervisory Board member. The investigation is driven with dedication by forensic specialists who are supported by colleagues across the firm and with the involvement of external experts to challenge and validate our approach. Given the nature and thoroughness of this investigation, the investigation is still ongoing. Since we prioritise the careful conduct of this investigation over speed, we expect it to be an important part of our agenda in Financial Year 2024/2025.

Preliminary findings from the investigation have indicated instances of misconduct within Deloitte Netherlands. In response, we have promptly commenced remedial actions and have already launched several initiatives aimed at enhancing our internal learning culture. We believe that facing the facts of the past and their consequences will help us learn, grow and improve. We emphasise that our shared value, serving with integrity, extends to how seriously we take professional development and related assessments. So our effort to elevate the professional learning environment is driven by a combination of the curiosity of our professionals and our commitment to integrity as a firm.

The internal investigation into answer sharing and the transformational strategic developments have required a solid investment of both time and resources, and this is reflected in our financial performance. Additionally, the challenging consultative market is evident in the revenue of our Consulting and Financial Advisory businesses.

We observe solid growth in Audit and Assurance, and while both our Risk Advisory and Tax & Legal businesses show growth, it is somewhat lower compared to 2022/2023. Overall, this resulted in a very moderate 2,5% growth of our total revenue compared to the previous financial year.

In Financial Year 2023/2024, we implemented a future readiness programme to address our cost base and support our profitable growth in the years to come, in line with our strategy of reshaping our current business. This programme has significantly contributed in keeping our profitability at a level comparable to that of 2022/2023. Profitable growth remains a key priority, as it enables us to further invest in the future of our firm, in the opportunity for and development of our people, and in the impact we can make on clients and society. 

In 2022/2023 we introduced the Engage for Change survey to help us measure employee experience and guide us in how we can make Deloitte a better place to work, grow, and thrive. With the high pace of change, we have asked a lot of our people in this past year, while we experienced continued pressure in the market and the need to be more cost-conscious. This was reflected in the results of the Engage for Change survey, as it affected our net promoter score and, albeit to a lesser extent, the employee engagement score. Although providing our people with meaningful work is an inherent part of our purpose, we noticed that people’s scores in our survey relating to this have slightly declined. Furthermore, the results also show a continuous positive trend in how employees perceived their well-being and the psychologically safe work environment at Deloitte. Additionally, we are confident that the opening of our Deloitte University in Paris will provide new, top-notch learning experiences for our people and enhance the building of strong relations across EMEA that will contribute to both personal and professional development. 

Besides making an impact through client work, we offer our people the opportunity to contribute to society through employee-led initiatives and Deloitte-wide priority programmes of our Deloitte Impact Foundation. For instance, we have strengthened our Foundation’s WorldClass programme over the past year by expanding our current collaboration with JINC to the Brainport region. This has increased the number of students we reach with our programmes focused on improving the equality of opportunity for vulnerable young people in education, especially in primary, secondary, and middle-level vocational education in the Netherlands.

Finally, we are very glad to share that Hans van der Noordaa has committed to a second term as Chairman of our Supervisory Board, with broad support from our partnership. We are also glad to have welcomed Corien Wortmann to the Supervisory Board as of May 27, 2024. We are confident that she is a strong addition to the Supervisory Board, as she brings a lot of experience. Corien Wortmann has succeeded Nienke Meijer in this role, and we want to take this opportunity to thank Nienke for her dedication and her valuable contribution as part of our Supervisory Board for the past seven years.

In 2023/2024, the composition of the Executive Board changed after Rob Bergmans decided to step down from his role as member of the Executive Board and to resign from Deloitte as a partner of the firm as a result of particular facts that emerged from the internal investigation into answer sharing. In February 2024, Harvey Christophers took over the role of Chief Quality Officer (CQO), on an interim basis due to his planned retirement in the summer of 2024. A thorough process has been started to nominate a successor for this role going forward.

Lessons learned

To fulfil our ambition to be a learning organisation, we reflected on our experience of the past year.

We are increasingly facing the complex puzzle of strategically planning for our future workforce and the required capabilities. We are responding to more fluctuating market demands and the subsequent variation in business models we deploy. This includes the continued transition towards further integration with our Global Delivery Network to improve the use of the depth and breadth of our global capabilities. At the same time, we expect technologies such as Generative AI to have a significant impact. All this is happening in the context of a challenging, locally shrinking labour market, where we see strong competition for key skills.

The pace of this change is substantial and has consequences for our talent base. We are carefully weighing dilemmas and trade-offs that we have faced in the past year and will continue to face in the upcoming year. Throughout these changes, we keep our people’s interest at heart: what makes their job interesting and meaningful, how can we incorporate more technology into our daily work, and how can we increase the positive aspects of the employee experience and minimise the negative aspects?

When it comes to the size of our local workforce, we do not anticipate our overall structural growth to be as fast as in previous years, because we will be leveraging the global power of our workforce to a greater extent and further integrate AI into the delivery of our client work. To continue to lead in the market, we will strengthen our local talent base by growing in certain expertise areas. At the same time, we will focus on improving the overall employee experience by supporting our people in their professional and personal development.

Diversity and inclusion are essential components of our talent focus. In the past years, the number of women in leadership positions has grown significantly. In the period from 2018/2019 to 2022/2023 the percentage of female partners increased to 22%, up from 10%. This past year, the number of female partners increased to 24%. However, we saw this positive trend gradually reaching a plateau, so we needed to approach this with renewed energy to continue the pace of transformation that we have achieved to date.

To be able to reach our target of 30% female partners in Financial Year 2026/2027 and promote more gender equality within the entire organisation, we must take a holistic approach. This approach is increasingly focused on building a solid pipeline to improve gender equality long-term, on providing women with opportunities and equal pay, and on creating an inclusive culture and psychologically safe work environment. This past year, we already refined the way we monitor gender representation, inclusion and psychological safety, through our Engage for Change survey, and we introduced Diversity Equality and Inclusion scorecards. This provided us with more detailed insights on a quarterly basis and allows for more targeted interventions.

Next to our focus on gender balance, we will continue our efforts on diversity, equity and inclusion in the areas of LGBTQ+, neurodiversity and cultural diversity.

Outlook

Overall, we expect an ongoing, high level of uncertainty, as the geopolitical tensions and economic volatility are likely to persist. As this will continue to influence our clients' investment decisions, the domestic advisory market will still be challenging. There are clear drivers for us in the medium term. The need for transformation, particularly in areas such as technology, sustainability and tax regulations, becomes more urgent for society at large and for our clients. 

We also see major opportunities in intensifying our collaboration across the EMEA region as we, as Deloitte Netherlands, are well-positioned to make the most of our scale while keeping our local roots strong. We expect this to provide us with more opportunities, from the clients we serve to the development of our people. Furthermore, our increased scale will enhance quality, operational excellence and will provide our clients with added value.

Finally, we hope to conclude our internal investigation into answer sharing in Financial Year 2024/2025, while actively focusing on enhancing our learning culture to foster an environment of integrity, and on our commitment to ongoing professional growth and open communication.

Hans Honig
Chief Executive Officer
Chairman of the Executive Board

Dagmar Enklaar
Chief Operations Officer
     

Harvey Christophers
Chief Quality Officer