While corporate finance is not renowned for diversity – and the many forms that can take – it is, without doubt, improving. Bringing greater diversity to a workplace is a journey and for Lucy Stapleton, UK deals leader at PwC, the focus today is on cognitive diversity, “because that takes into account all different types of diversity – be it gender, ethnicity or generational. We now have so many examples of where we get a better answer if we’re a bit more curious about other people’s thoughts and listen to other ways of thinking,” she says.
Creating a culture of cognitive diversity within a large professional services firm such as PwC is about being “genuinely receptive to others’ experiences and ideas. An echo chamber of ideas won’t make us more effective, successful or profitable. Different views and perspectives are critical to idea generation and innovation. So we work hard to achieve this by looking at a spectrum of places from where we recruit, the different backgrounds people have, their skills and experience.”
Stapleton heads up the Big Four firm’s transaction services (due diligence and forensics), corporate finance, business restructuring and forensics businesses. In total, the deals business includes about 200 partners and just over 2,000 staff.
PwC is recruiting across all four parts of its deals business, explains Stapleton – from school leavers through to experienced partner hires, and across all the different skill sets.
Within its commercial strategy service team, there’s an M&A function covering operational due diligence. “It’s a really interesting mix of individuals because we’ve got people who haven’t had the traditional start to their career for a Big Four firm. We have people from industry who’ve run manufacturing plants, providing insights that none of us could ever hope to share with our clients. It just adds to the mix. I truly believe it brings us much better insight and, as a result, we can offer better advice.”
Skill set
As an ACA herself, Stapleton remains a strong believer in the skill set that ICAEW’s core qualification gives staff. When she started, this would have been the standard ‘audit route to qualification’, then corporate finance and transaction services. But that’s now no longer the only way: PwC has a one-year project programme where graduates can experience different business units, including various forms of deals advisory. It’s also sponsoring technologists through university and, once they join the company, recommending the ACA qualification.
“A number have a great interest in that, which is really encouraging,” says Stapleton. “The combination of technology and the accountancy qualification is really compelling. It’s the future. It would make us so much more relevant to our clients because of the insights that can be harnessed from advanced analytics with the rigour of the accounting knowledge alongside it.”
The family business
Stapleton’s own journey began while studying history and economics at the University of Exeter. While there, she decided she wanted a professional qualification and weighed up accounting and law. Accountancy was in the family – her father and grandfather were accountants. She decided on the ACA route because she felt it would give her broader business experience that would allow her to keep her options open.
In 1993, she joined PwC’s audit group in London. She worked predominantly for financial services clients, such as Lloyds, and some unit trusts. But it wasn’t only about clients in the City – she also audited utility groups, car importers and John Lewis. “It was fantastic training, with a great peer group to have shared experiences and learn with,” she says. “It taught me how to build trusted relationships within teams and with clients to get audits done. It also taught me healthy professional scepticism. Those are two key skills.”
After first-time passes, she spent two years post-qualification in audit, but sometimes working on ‘special projects’ – the precursor to transactions as a separate service line.
The deeper analytical understanding of the businesses and their strategies was particularly interesting to her. In 1998, two weeks after PwC came into being following the merger of Price Waterhouse and Coopers & Lybrand, she moved to New York to join the deals team. Initially, there was some scepticism between the former Price Waterhouse and Coopers & Lybrand deals teams as “both felt they were the best”.
Stapleton arrived in the new role without links to either local firm before the merger and says she found herself able to work with everyone in a collaborative way. Her assignments in the US were focused mainly on deals with the big private equity houses, but she also worked on the privatisation of Ontario Power Generation. She returned to the UK in 2001 to join the London office’s transaction services team, which was by then well established.
She then built up her transaction services experience with pharma and life sciences businesses. One of the first assignments back in the UK was a strategic review for Roche. That led to the sale of its vitamins and fine chemicals businesses to Dutch chemicals company DSM for €2.25bn in 2003. She advised on the £1.9bn sale of Boots to Reckitt Benckiser in 2005. In 2008, she advised Roche on another disposal – of its consumer healthcare business to Bayer for €2.4bn. She then worked for Bayer on the disposal of some of those assets.
“I really liked the purpose behind those deals,” she says. “I understood why they were doing them – investing in new technologies and innovations to combat diseases. I enjoyed working with those businesses, but I recognised we didn’t have a healthcare team in the UK at the time. There was something of a merry-go-round in consumer healthcare then – there were a lot of deals and we could see more coming.”
Stapleton was tasked with building a team, starting with two people, including herself. The London team now has more than 100 people. “A huge part of my career – and my life – has been building out the healthcare team. It now works for private equity and the big corporates in the sector.” One such was AstraZeneca and she led a team working on its bid defence.
The consumer sector is another area in which Stapleton has worked on many deals. She advised Unilever on its €6.8bn disposal of its spreads business to KKR, completed at the end of 2017, and last year on its $5.1bn sale of its tea division to CVC. During the pandemic in 2020, she advised Coty on the sale of its hair products business, Wella, to KKR.
Since making partner in 2006, she has been UK pharmaceutical and life sciences leader, chief operating officer for deals and people leader for transaction services. She was promoted to UK deals leader in 2020.
Changing roles
Last year, about 40% of PwC’s new partners were female. In deals advisory, it was a little below that, according to Stapleton: “It takes a while for diversity to move through, but equally there’s more that we must do to address it. It’s something I’m personally incredibly motivated by - as the leader of this business and also as a mother of four, three of which are girls. Having a workplace with equal opportunities for all is not only the right thing to do, it’s also commercially sound. If I look at the younger generation of partners, we’ve got a much more balanced diversity profile. It really is changing with gender and ethnicity, which can be physically obvious, but we’re also focused on social mobility.”
PwC has had female partners in corporate finance for a long time, but they were low in number. One such was Pam Jackson, now CEO of Level 20, the not-for-profit organisation dedicated to improving gender diversity in the European private equity industry. She spent 36 years with PwC and was one of the founders of the firm’s private equity and corporate M&A business. She led the firm’s deals business in the Middle East between 2017 and 2019. In 2001, she set up PwC Female Partners and Directors network, which moved the firm’s diversity agenda forward.
“I think Level 20 is doing a really good job of trying to highlight the role females are playing in private equity and I love that this community exists and is championing senior female representation across the industry,” says Stapleton. “I’ve been fortunate to have many role models, mentors and sponsors. I certainly wouldn’t be where I am today without them and I don’t believe anyone would make partner – regardless of who they are – without some sort of mentor.”
Today, sponsorship and mentoring is more formalised at PwC “to ensure everyone feels confident to ask for it”.
Says Stapleton: “I’ve taken bits of different people I’ve worked with over the years and tried to emulate the strengths of those individuals.”
Staying positive
Last year set record levels for deal activity globally and in the UK. This year, in spite of very different challenges, there’s still a lot of optimism in the deals market, says Stapleton. “The war in Ukraine is hugely tragic. I was working with a team in Ukraine and hearing the day-to-day struggles of our teams out there brought things very close to home. We continue to stay focused on supporting our people and teams over there. The war has also highlighted some of the fragility we saw at the beginning of the year – supply-chain challenges and the inflation that has followed.”
However, she says business services and healthcare services remain very busy. Pricing will be an issue as investment committees are revisiting offers. “But there is such a strong private capital base in the UK compared with during the global financial crisis, when there was less money available to deploy. While the public markets are challenged, we’ve got a lot of private capital waiting to be deployed; private equity and corporate balance sheets are really well funded. We are sitting in a different place to 2008.”
At the beginning of the pandemic, the advice to clients was to draw down on revolving debt facilities, but a number of them are really well funded now and able to transform, and they are “using transactions as a way to transform and drive sustainable growth”, she says.
“Digital transformation and environmental, social and governance are encouraging businesses to get rid of parts of a portfolio that are either not so great, or they don’t want to be associated with as much going forward, which is driving deal flow. And sustainable growth comes to adjacencies and new geographies, so we’re definitely seeing corporates using transactions to help accelerate that transformation.”
Balancing act
PwC’s policy for office working is “at least two to three days a week”. It already had a flexible working policy, but the COVID-19 pandemic has seen it embrace hybrid working, which is flexed around a client and their expectations.
Pre-pandemic, Stapleton tried to work from home one day every couple of weeks. “I’d always feel slightly defensive about it and try to persuade people I was genuinely working. I’m the mum of four children, have a busy life and just occasionally working from home and being able to take them to school made a big difference to me. But now I think everyone recognises the mental and physical well-being benefits we can get from that.”