Global review 2010

Ernst &Young
Global review 2010

Chairman’s letter 2
Chairman’s Q&A 4

01 Globalization 7

02 People 19

03 Entrepreneurship 29

Facts and figures 41

 Global review 2010

Chairman’s letter

“Our increasingly complex and interconnected

world requires businesses to be more global,
more accepting and understanding of diverse
points of view, and more focused on what really
matters in the post-crisis world.”

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Global review 2010 Chairman’s letter

The past year has been one of recovery Positioned against these trends are some
James S. Turley and readjustment for the global economy — important advantages that Ernst & Young
recovery from the worst recession in decades, has as an organization. We are recognized
Chairman and Chief Executive Officer and readjustment of the relationships between as the most globally integrated professional
Ernst & Young
developed and emerging economies, between services organization — in our mindset, actions
the public and private sectors, and between and structure. We are building and fostering
global institutions and nation states. the leading people culture in our profession.
And we have the leading brand and reputation
The strong recovery we’ve seen in the
with entrepreneurs all over the world. These
emerging markets has contrasted with a
are strengths that we have cultivated for
weaker one across the developed world,
years, and that will serve us extremely well
accelerating a long-term shift in economic
in the decades to come.
power from west to east and from north
to south. Governments, central banks and Our long-term focus on the trends that
regulators looked for ways to stimulate and will be shaping the world means that, as
support their domestic economies. And the the recovery takes hold, we are uniquely
unprecedented cooperation between countries positioned to provide quality services for our
in the depth of the crisis has come under strain clients. Two years on from the worst global
from national pressures. downturn in decades, Ernst & Young’s financial
performance held steady and, encouragingly,
Our increasingly complex and interconnected
was much stronger in the second half of the
world requires businesses to be more global,
financial year. This performance is testament to
more accepting and understanding of diverse
the efforts of our 141,000 people, and I want to
points of view, and more focused on what
thank them for working tirelessly for our clients
really matters in the post-crisis world. This
and colleagues while always demonstrating
is occurring at the same time as sweeping
their unwavering commitment to quality.
demographic changes continue to impact the
world. The teams we will each be part of in
years to come will be much more diverse than
those same teams may have been a short time
ago — diverse in terms of gender, ethnicity,
nationality, religion, generation and many
other characteristics.

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Global review 2010
Chairman’s Q&A
Jim, you spend a lot of your time speaking
with business leaders around the world.
Are they confident about global economic
recovery?
As the recovery takes hold, people I speak to
say they’d have hoped that recovery would be
more definite everywhere around the world,
but there are some bright spots. Different
parts of the world are recovering at different
speeds — the confidence in the emerging
markets is strong and justified by both their
recovery and their growth prospects. And
there’s a slowly growing sense of optimism
in the developed economies, too.
However, business leaders think that some
major risks remain. The first of these risks
is that the international cooperation that we
saw during the crisis fractures and countries
become protectionist. We are seeing
evidence of this in the global dispute over
currency intervention. A second risk is that
entrepreneurs stay on the sidelines, when
they are vital to creating the jobs that are
badly needed in many developed economies.
And a third risk is that the global economy is
knocked backward by a sovereign debt crisis.
Apart from focusing on the economy,
what are business leaders focused on now?
The thing that I’m hearing a lot of discussion
and debate around is how companies should
prepare for, mitigate or otherwise manage
low-probability but high-impact risks.
Events this year such as the oil spill in the
Gulf of Mexico showed just how significant
these risks can be. Traditionally management
and boards have probably spent more time
focusing on their higher-probability risks.
That’s important, but I think the focus is
shifting now to encompass a broader view
of all risks, even those thought to be very
unlikely to occur.
One of the results of the downturn is that the
G-20 seems to have emerged as an important
body for global economic and regulatory
coordination. What is your view on that?
I think this is one of the most important
changes, or at least it reflects one of the most
important changes, that has occurred in the
past several years. The downturn has really
accelerated the shifts in economic power to
the emerging markets. This year the emerging
markets will account for nearly half of world
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economic output, more than half of global
economic growth, and they are bouncing back
from the downturn much more quickly than
the developed world. Continued changes in
demographics mean this trend will continue
for decades. The G-20 is much more
representative of this changed world than the
G-7 or G-8, and so it’s right that it has become
such an important forum for cooperation.
The G-20 leaders have called for a single set
of high-quality accounting standards around
the world. Are we any closer to achieving it?
Yes and no, but I remain optimistic.
Convergence of IFRS and US GAAP is an
important objective on the path to realizing
the goal of a single set of high-quality
accounting standards used around the
globe — an effort we continue to endorse
without reservation.
Under the leadership of Sir David Tweedie
and Bob Herz, the IASB and FASB have
made great strides towards realizing the
goal. And, we welcome the appointment
of Hans Hoogervorst and Ian Mackintosh
as IASB Chairman and Vice Chairman
respectively, and of Leslie Seidman as
Acting Chairman of the FASB. But much
work — and much uncertainty — remains.
The Boards have an ambitious timetable
and, perhaps more importantly, they have
not been able to agree on some important
areas like financial instruments. Both the
IASB and the FASB feel pressure from the
G-20 to complete their joint projects
expeditiously. And the IASB feels the added
pressure of certain countries that are set to
adopt IFRS in the near future. But these
pressures cannot lead to a sacrifice in the
delivery of improved, high-quality and
operational accounting standards.
Progress on the joint projects also is an
important consideration for the US Securities
and Exchange Commission (SEC) as it decides
whether to commit to a date — or dates —
certain to require US companies to adopt IFRS.
We hope that taking the time that is necessary
to develop improved, high-quality standards in
so many important areas will not significantly
affect the SEC in continued progress toward
making an adoption decision. However, we
are at a critical juncture for all parties.
Global review 2010 Chairman’s Q&A

Here is the thing, though. When I talk to a lot. If the “Enron-era” crisis was
people in the US, I make it really clear to characterized by countless restatements of
them that I can’t see any advantage for the accounts, then this crisis has certainly not
US to operate by a different set of rules than been. In fact, the profession feels pretty good
those that are followed in most of the rest about the role it played in helping ensure the
of the world. I don’t believe that benefits fair presentation of accounts.
the US economy, the US capital markets
That said, I think there are some very
or US investors. So that is why I remain
legitimate questions the world is wrestling
optimistic about IFRS becoming the single
with now. If you have few if any financial
set of high-quality, global accounting and
restatements, yet you still have the crisis
financial reporting standards.
we just experienced, then people rightly ask
Because of rising budget deficits, how relevant historical financial information
governments around the world are searching really is. So the issue becomes a discussion
for revenue while, at the same time, they around what information investors need to
are competing for scarce jobs and capital. make the right decisions. Do they need more
In this complex tax environment, how are forward-looking information, more on key
clients responding? performance indicators? Do they need more
Clients are definitely getting the message information about judgments, estimates
that tax is more important from both a and accounting policies?
strategic and a risk management perspective.
This is clearly not just an issue for the
In response, C-suite executives, audit
profession. It’s something that our regulators
committees and company boards are
and investors around the world are starting to
increasingly including tax risk management
discuss as we all try to prevent a replay of this
as part of overall corporate governance.
crisis in the future.
Last year, the US Commissioner of Internal
So what do you think the auditor’s
Revenue, echoing a sentiment increasingly
responsibility should be?
shared by tax administrators around the
We have a proactive responsibility to make
globe, said that companies need to view tax
sure that we comply with auditing standards
as an issue that gets appropriate vetting at
and that the clients we serve are complying
board level, because complicated business
with the requisite accounting standards.
transactions raise complex tax issues and
So the first and most important responsibility
because tax is one of the biggest expenses
is to act diligently and professionally in
on the income statement. Transparency is
compliance with standards, and have clients
the new watchword of corporate governance.
do the same. Where the application of those
All of this is occurring in a time of substantial
standards would result in something that is not
revenue needs for most governments in
“true and fair”, then we should figure out how
the world and, therefore, increased
to discuss this with regulators, discuss this in
enforcement activity.
a more open way with audit committees, and
Audit committees are also responding by figure out the next steps to take.
expanding their focus from tax compliance
Regulators also want to figure out whether
issues to tax risk management. One
and how auditors should work more closely
consequence of the new enforcement era is
with prudential supervisors. The UK Financial
that tax administrators expect corporate
Reporting Council and Financial Services
boards to understand the outcomes of their
Authority issued a white paper talking
business tax strategies in their role as
specifically about that and this type of
corporate stewards. This underscores the
discussion is also included in the recently
importance for clients to have open and
issued EU green paper on the auditing
regular communications, especially between
profession. What role should auditors who
the tax function and the C-suite. We are seeing
serve financial institutions have in talking
leading companies implementing more
to different regulators? That’s a discussion
effective communications frameworks to
that’s going to take place over the next year.
ensure tax issues are brought to the attention
of the audit committee and full board. How do you feel about how Ernst & Young is
doing right now?
As a result of the financial crisis, some
One of the things that I’m always interested
people have asked, “Where were the
in is how others see Ernst & Young. I travel
auditors?” How do you respond to that?
all over the world, and what I hear about our
The first thing I’d say is that it’s important
organization is remarkably consistent around
to contrast the last two crises we’ve been
the globe. There are three things, really.
through. The crisis at the beginning of this
decade had a large number of financial First, when others look at the profession,
restatements, so you could rightly call it an what they say is that Ernst & Young is by far
accounting and auditing crisis. The crisis the most global — the most global in mindset,
that we’re emerging from now was really an governance, structure and actions. And I hear
economic crisis. It was about credit bubbles, this consistently whether I’m talking with
property bubbles, and asset values changing clients, regulators, students or whomever.

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Global review 2010 Chairman’s Q&A
Second, I hear that Ernst & Young has a
leading people culture — a culture that’s built
on our values that permeate the organization
around the world. When people look at us
globally, this is the place they want to be.
Third, I hear we have the best brand in
working with entrepreneurs — working with
business people who are really driving things
in the marketplace. Part of that comes from
our Entrepreneur Of The Year program, but
the biggest part of it comes from our
decades-long commitment to having a great
client portfolio in strategic growth markets
and emerging economies.
When people talk about us this way I feel like
we’re getting it right — that these advantages
we have, and that people see us as having,
position us perfectly for continued success,
the way the world is today and the way it will
be in the future.
We’ve won some well-known audit clients
over the past couple of years, many of whom
have cited our globalized structure and
focus on traditional services as a key factor
in their decision to appoint us. We’ve gained
global household names such as Siemens,
Eni, Danone, Enel — subject to shareholder
approval, Fiat Industrial and United Airlines.
And we’ve won a lot of great projects with
non-audit clients, too, ranging from Barclays
to Vale. I think these new clients and
engagements prove that our global structure
is a point of difference that resonates strongly
in the market.
So I feel great about how we’re doing, although
every day we have to commit ourselves to be
better. I’m not satisfied — nor are any of our
people — when regulators find things around
the world in our engagements that they wish
we had done differently. Quality in Everything
We Do is what we are all about.
How have you managed to achieve as
much as you have done in terms of global
integration when it seems as if other
similar organizations have struggled?
There are probably lots of reasons, but what
stands out in my mind is the trust we have
built over the years. This is trust among
partners of our practices, trust across
borders, respect for different opinions and
perspectives and a teaming culture that
pervades the entire organization.
Why do you think Ernst & Young’s people
culture is so special?
Every culture is unique — it can’t be replicated.
At Ernst & Young we aspire to have a leading
people culture everywhere in the world.
To achieve this, we invest in being the most
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inclusive organization; having the most
robust learning and development framework;
and offering the most engaging environment
in which to build a career.
If we attract and retain the best people —
and invest in them — then we will deliver the
best results for our clients. Our aim is to be
an organization comprised of highly skilled,
highly motivated and highly engaged people
who believe Ernst & Young is the best
organization for them and feel excited and
proud to work here.
Advisory was one of your growth areas
this year. Why are you building your
Advisory services again?
The downturn created greater demands
among our client base for risk management,
operational efficiency and sustainable
performance-improvement services.
Such demands provide an opportunity for
our profession and our organization to be
at the forefront in stabilizing and revitalizing
the world’s leading organizations through
these difficult times.
We have a very focused Advisory strategy.
It’s around transactions, risk and performance
improvement closely related to our traditional
services. We have chosen to focus our
investments in our traditional and related
services and not pursue investment and
growth in the large information technology
systems integration and outsourcing space.
Finally, what do you feel your most
important role at Ernst & Young is?
For me, the answer to this question doesn’t
change. In my eyes, the most important
thing I can do is to ensure the people of
Ernst & Young have a personal sense of
what is right and what is wrong, and of what
is expected of them. And, most importantly,
that all our people have a deep belief that
nothing is more important than their own
personal integrity and commitment to
quality. If anyone or anything makes
them uncomfortable, at a client or within
Ernst & Young, I want them to know that it is
not just okay for them to object, or raise their
hand, or ask for assistance: it is their personal
and professional obligation to do so.
That is why, just as in previous years, I spend
most of my time traveling to our offices,
visiting our people — speaking with them and
our clients. Because getting our people to
truly understand our expectations of them,
and truly believe in our commitment to them,
doesn’t happen just by email or voicemail.
Meeting our people where they live, and
seeing each other face to face, is the only way.
Globalization

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 Global review 2010

Globalization

“Globalization is one of the defining issues

of our time. Our response has been to
transform our organization so that we
keep in step with the changing needs of
our clients and our people.”

Globalization is shaping our world: it’s expanding horizons as trade,

technology and investment increasingly connect countries and companies
around the globe; and it’s compressing time and distance as people and
products move — and ideas spread — faster than ever before.
Globalization magnifies opportunity and risk. It opens up new markets
and creates opportunities for innovation. And it provides access to new
sources of capital and wider pools of skilled employees. But at the same
time, globalization has increased complexity. As organizations navigate
new markets or encounter new competitors, the demands on them multiply.
The recent financial crisis brought home just how interconnected and
interdependent the world has become. It also emphasized two forces
of globalization: the shifts in demographics and capital that are shaping
the global economy and society as a whole. These trends will increasingly
impact markets, competition and recruitment for us and our clients.

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Americas
Our Americas Area was formed
in 2006. It comprises 29 countries
and nearly 41,000 people.
The workplace culture of the
Americas Area is regularly
recognized by organizations
such as the Great Place to Work
Institute and Universum, which
frequently place Ernst & Young
near the top of their lists for
countries across the region.
EMEIA
We created our EMEIA Area in
2008, bringing together 67,000
people from 90 countries across
Europe, the Middle East, India and
Africa. It was a groundbreaking
move, as many assumed that it
was impossible for an organization
such as ours to take such a big
step. Creating EMEIA cemented
our reputation as the most globally
integrated organization in our field.
Asia-Pacific
Our newest-formed Area, which
brings together 26,000 people
across 20 countries, was created
in 2010 through the integration
of our former Oceania and Far
East Areas. The Asia-Pacific
region is the world’s most dynamic
economy. We believe that much
of our clients’ and our own future
growth will come from the region
and our Asia-Pacific Area will
enable us to better serve clients
looking to invest in or grow
across the region.
Japan
Our Japan Area employs more
than 7,000 professionals and
works with many of Japan’s
best-known companies across
the financial, manufacturing and
electronics sectors. It also acts
as the hub for our Japan Business
Services network — nearly 350
Japanese-speaking professionals
based in 60 cities around the
globe who serve Japanese
clients operating overseas.
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Global review 2010 Globalization

At Ernst & Young, we have long thought that globalization is one of the
defining issues of our time. Our response has been to transform our Globalization index
We engaged the Economist
organization so that we keep in step with the changing needs of our clients Intelligence Unit to create an
and our people. Our clients need integrated, cross-border service and the annual globalization index and
same high quality wherever they do business around the world. Our people released Redrawing the map:
globalization and the changing
want to build careers in an organization that’s global in its outlook and world of business at the
inclusive in its approach. World Economic Forum, 2010.
We asked 520 senior business
We’re not merely a loose collection of national practices. We are the most executives for their views on
globally integrated professional services organization in our mindset, the impact of globalization.
The key findings were:
actions and structure. And at the heart of our highly integrated organization
• The rise of the emerging
are the 141,000 people who comprise Ernst & Young.
markets has changed the game
and outlook for businesses
Our global mindset
As our world has become more interconnected, the people we work with, • Companies are still planning
international expansion
and for, come from a diverse range of backgrounds and cultures. We want to despite the downturn
recruit and develop a workforce that mirrors the world we live in and has the
• Successful companies
skills and mindset to work effectively across any borders. require culturally diverse
management teams
To support them and help foster the global mindset needed to work
• Innovations developed in
in cross-border and cross-cultural teams, we encourage international one country are not always
assignments among our member firms and promote an inclusive work commercially viable in others
culture that respects diversity. The success of our integration efforts as • Businesses must engage with
we’ve moved from a country-focused organization to a more integrated, governments and other policy
makers on issues such as trade,
global one is a testament to the global actions of our people.
protectionism and regulation
Our global actions www.ey.com/globalization
Global integration means we can respond faster than our competitors.
We can access the right people and assemble broader, more experienced
teams, wherever the client is based, to deliver seamless service worldwide.
We can consistently negotiate everywhere, execute everywhere and
mobilize resources everywhere.
We can invest on a global basis, also. This was the fourth year of our
US$1 billion investment initiative. Underlining the shift in global economic
power, much of that investment has been earmarked for emerging markets
and the program exceeded expectations, with more than US$1.2 billion
ultimately invested.
By acting globally we deliver better, more consistent quality. The UK Audit
Firm Governance Code, which came into effect in 2010 and applies to our
UK business, stipulated bringing in Independent Non Executives (INEs).
We decided to also implement this requirement at a global level as well as
naming the INEs to our Global Advisory Council, our main global oversight
body. This was part of our commitment to achieving the highest quality
standards, worldwide.

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 Cross-border connections
At Xerox Corporation, executives are
frequently called on to take new leadership
roles that require them to relocate
internationally. So, they expect to work
with a professional services organization
that has as global an outlook as they do.
“This means our international client service
team has to be constantly in touch with one
another to share insights and ideas,” says
Dan Kaplan, Ernst & Young Global Client
Service Partner for Xerox. “We’ve built trusted
relationships throughout Xerox’s global
organization by understanding their business
imperatives and issues, and demonstrating
how we can best help Xerox management
overcome the challenges they face.”
Ernst & Young has provided global internal
audit outsourcing services to Xerox since 2001.
Our relationship has expanded in recent years,
“They expect to work with a professional
services organization that has as global
an outlook as they do.”
however, as the team introduced new subject
matter specialists to enhance the service we
provide Xerox. As a result of this commitment,
Xerox engaged us on a variety of information
technology, process improvement, tax
and transaction advisory services projects
throughout EMEIA and North America.
A recent Xerox acquisition provided us with
a great opportunity to demonstrate our due
diligence services and our ability to assist
during post-acquisition integration.
“Xerox assembled an internal transition
team that planned and executed a smooth
integration of two complementary but
different businesses,” says Dan. “We provided
insights around transactions, tax, valuation,
human capital and information technology.
Our ability to listen and work with their team
was just as important as what we had to say.”
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 “Our global structure means we have broad
and a shared commitment to quality.”
geographic reach, central accountability
Reaching new heights

“When Boeing’s new 787 Dreamliner made

its international debut at the Farnborough
International Airshow 2010, we worked with
Boeing to ensure their key people were in
the UK to leverage the opportunity,” says
James Egan, Leader, Ernst & Young’s Global
Immigration practice. “It was a high-profile
event and the right people needed to be there.”
Boeing is the world’s largest aerospace
company with operations in 70 countries.
We support them with strategic advice on
immigration issues, as well as processing
and tracking visas and work permits for
international assignees in nearly 60 countries.
Our global business immigration network is the
largest of its kind, with offices in 90 countries
offering a wide range of immigration services.
“The increased globalization we’ve seen
in recent years means more workers are
moving around than ever before. It’s vital
that international assignments are managed
carefully. If there are issues with work permits
or visas, then it can lead to losing a contract,
losing money or a damaged reputation.
Companies like Boeing understand these
risks and clearly wish to make sure they
avoid them,” explains James.
“When looking for a global immigration
provider, Boeing selected us. Our focus
has been to provide consistent quality,
responsiveness and thoroughness. What
makes us different from many providers is
that we are not reliant on third-party vendors.
Our global structure means we have broad
geographic reach, central accountability
and a shared commitment to quality.”

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Global review 2010 Globalization

Our global approach strengthens our ability to establish and execute on

global policies and practices that raise the bar for service quality. Our range
of global tools and processes supports our people in evaluating, accepting
and serving the right clients with the right services. These tools include
GTAC, our Global Tool for client Acceptance and Continuance, and SORT,
our Service Offering Reference Tool, which allows people to assess quickly
which services can be delivered to our audit and non-audit clients.
Across the world, our member firms are complying with the requirement
of the EU 8th Directive that statutory auditors of EU public interest entities
publish an annual transparency report. As strong advocates of transparency,
we have extended this by publishing a global report that provides an overview
of our global governance and quality standards. You can read this report at
www.ey.com/transparencyreport.
Our global structure
At Ernst & Young we have a global structure that is unique in our profession
and can best meet the demands of today’s and tomorrow’s business. We
have one strong global leadership team that sets one single global strategy
and agenda. To ensure we are efficient and effective, we have organized our
legal entities into similarly sized business units in terms of both people and
revenue. These business units, almost all of which are purposely not single
countries, are grouped into geographic Areas across the Americas; Europe,
Middle East, India and Africa; Asia-Pacific; and Japan. Each business unit’s
leadership team works directly with their Area and global leaders to ensure
flawless execution. This structure is streamlined — it allows us to make
decisions quickly, and ensures that we execute our strategy and provide
high-quality service wherever in the world our clients do business.
Over the past year, we’ve been working hard to globalize the support
functions shared by our four geographic Areas and our global center.
We are creating cost savings by reducing duplication and creating
efficiencies of scale and, at the same time, are increasing effectiveness
by improving service consistency. In our financial year 2010, globalizing
IT services and procurement has resulted in savings of hundreds of millions
of dollars. Generating these cost savings creates more opportunity to invest
in market-facing activities and broaden our service offerings. The ultimate
aim of creating shared global services, however, is to support our client
teams and global integration efforts. Globalized support functions help
build a global mindset and underpin our global structure. They also develop
a consistent, customer-centric approach to internal service, which mirrors
the way we serve our clients.

13
 “The diversity of our team — in terms of
global approach were really recognized.”
culture, skills and location — and our

Making tax less taxing

“Collaboration between teams from member

firms of Ernst & Young’s Asia-Pacific and Europe,
Middle East, India and Africa (EMEIA) Areas was
crucial to help us succeed with this engagement.
And the diversity of our team — in terms of
culture, skills and location — and our global
approach were really recognized by Lenovo,”
says Alice Chan-Loeb, Ernst & Young’s Global
Client Service Partner for the computer giant.
Since its acquisition of IBM’s PC business
in 2005, Lenovo had engaged a number of
corporate income tax compliance service
providers. Following a two-day workshop
in Beijing, Ernst & Young developed a fully
automated system that will make Lenovo’s
corporate income tax compliance and
reporting more efficient.
“Colleagues from many countries came
together with professionals from our EMEIA
Tax Center to look closely at how Lenovo’s
tax, accounting and IT functions interacted
with each other and their service providers.
This new automated system will improve
processes as well as the quality of the data
Lenovo uses for tax compliance and reporting.
Most importantly, it will also help Lenovo’s
tax team free up time for other critical tasks
such as planning,” says Alice.

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 Global trading, global teaming
“Japanese trading companies — or ‘sogo shosha’
as they are known in Japan — are complex
but nimble organizations,” explains Shinichi
Saito, Ernst & Young’s Global Client Service
Partner for one of the best known of these
companies. “They are highly diversified and
highly globalized — often earning most of their
revenue overseas — although their structure is
uniquely Japanese. Their outstanding feature
is that they can quickly adapt their business
models to match the changing global business
environment,” he continues.
Many of these trading companies span a
wide range of industries — from fashion to
infrastructure to mineral resources to energy
— and create economies of scale by linking
together functions such as logistics, financing
and equity investment, and marketing across
businesses and borders. So serving such clients
effectively requires the right team and mindset.
“These companies need us to match their
global footprint and global outlook.”
“These companies need us to match their
global footprint and global outlook as well as
deep industry experience across their diverse
range of interests. In the case of one client, we
support its global operations in more than 50
countries, through dedicated teams all around
the world. It works across many different
sectors, so our Global Industry Centers in Oil
& Gas, Mining & Metals, Power & Utilities and
others are vital to the services we provide,”
says Saito. “Drawing on them, on our Japan
Business Services network and on our other
service-line professionals, within a day we can
put together the right team for any project,
anywhere in the world, which will provide the
client with the same high level of service they
would receive in Tokyo.”
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 “Our team is highly integrated and that
is what makes a difference.”
Thinking beyond borders

“Thinking beyond borders and service silos is

vital to working with the European Commission,”
says Inge Boets, Ernst & Young’s Global Client
Service Partner for the EU. “While
commissioners for the 27 EU member states
are based in Brussels, the EC’s 25,000 civil
servants work in multiple countries. The unique
structure of Ernst & Young’s Europe, Middle
East, India and Africa (EMEIA) Area makes
it possible to draw on several hundred
government and public sector professionals
from countries around the world, providing
high-quality service to the EC.”
Since 2007, Ernst & Young has been servicing
Audit Framework Contracts for the EC.
An Audit Framework Contract is an agreement
with an audit firm that sets out terms and
conditions under which specific audits can be
launched. It’s a way for the EC to rationalize
and harmonize relationships with professional
services firms. Ernst & Young currently manages
five Audit Framework Contracts and has been
working closely with the EC to improve the
quality of audits, guidance and training — the
three pillars of Audit Framework Contracts.
“In 2008, we created a special pool of audit
team leaders from across multiple countries.
It’s always a challenge when you bring together
people from different countries, but the
mindset and motivation of our people across
EMEIA has made it a success. Our team is highly
integrated and that is what makes a difference
for the EC,” says Inge.

16
Global review 2010 Globalization

Our service lines

Globally, we provide services and resources across four service lines —
Assurance, Advisory, Tax and Transaction Advisory — in 16 principal
industry sectors. These sectors are aligned with our key target markets
and represent our strongest opportunity for growth in our chosen markets.
Our focus on industry enables us to build deep connections with our clients
through a real understanding of their issues, allowing us to build our
knowledge in the areas that matter most to them. Our service lines provide
the same services using the same methodologies worldwide.
Assurance
The global business landscape is being transformed by the impact of the
recent financial crisis and by globalization. This transformation is resulting
in a number of significant challenges for management, boards, audit
committees and external auditors. In this environment, we are more focused
than ever on ensuring the relevance of our work to all stakeholders in the
capital markets.
Our relationships with audit clients mean that we are uniquely placed
to examine the challenges they face in today’s changing environment.
We’ve identified five key areas of attention that have emerged for them
to consider in the financial and accounting environment: enhancing
corporate governance; evaluating overall risk management beyond
financial statement risk; evaluating funding and liquidity strategy;
assessing the impact of regulatory and accounting rules; and protecting
financial reputation.
While we seek to help our clients as they work through these issues, we
never lose sight of our commitment to continue to deliver audits of the
highest quality. Ernst & Young’s global integration enhances audit quality
by enabling greater scale and mobility of resources, more effective use of
people and greater consistency in the application of our audit methodology.
Tax
In today’s changing global environment, many companies are re-framing
their decision-making processes and adjusting the way they operate to
remain competitive. Tax is playing a more visible role in this process from
both a strategic and a risk management perspective. As an example, senior-
level executives, audit committees and company boards are increasingly
including tax risk management as part of overall corporate governance.
For each change that businesses have had to make, governments have
had to consider how to react. They have adapted their tax policies and
adjusted their administrative approaches to compete more effectively for
international business and investment, while collecting the revenue they
need to address growing deficits and increased spending needs.

17
Global review 2010 Globalization

Companies are looking to our Tax practice for help with tax advisory and
reporting, as well as tax risk management. The combination of our strong
network of tax professionals, market-leading insights and global focus and
integration enables us to address the interconnected needs of our clients’
global operations. In addition, our deep industry and geographic experience
positions us well to better understand their businesses, focus on their needs
and provide exceptional client service to help them achieve their goals.
Transaction Advisory Services
We help clients make better decisions about how to strategically manage
capital and transactions. In today’s globalized world, effectively managing
capital is challenging. We are seeing more complex transaction structures
involving a broader range of buyers, demanding financing arrangements
and a greater need to maximize cash release than in the recent past. As a
result, more rigorous capital management is more important than ever.
That is why in 2009, we repositioned our Transaction Advisory Services
practice around our clients’ most pressing issue — capital. We have aligned
ourselves to our clients’ capital agenda — helping them raise, invest,
optimize and preserve their capital. This broader positioning enables us to
articulate the value we can add beyond our historic focus on transactions
and complements the services we offer in Assurance, Tax and Advisory.
Advisory
Over the past few years we have invested in building our Advisory capabilities
and attracting talented Advisory professionals to join Ernst & Young
around the world. Today, Advisory is one of our fastest-growing service
lines and, with nearly 20,000 advisory professionals in over 140 countries,
it is one of the broadest global advisory networks of any professional
services organization.
The changing economic environment has created greater demands for
risk management, operational efficiency and sustainable performance-
improvement services. In response to client demand and the changing
economic environment, we have repositioned our capabilities in the area
where we believe we can make the most impact and where organizations
need the most help.
We have focused our Advisory strategy around transactions, risk and
performance improvement — areas closely related to our traditional
services. Through our skills and objectivity, we help our clients stabilize
and revitalize their organizations and bring stability and confidence to
their many stakeholders.

18
People

19
 Global review 2010

People

“We aspire to have a leading people culture

everywhere in the world.”

Globalization and underlying demographic trends mean that competition

to employ outstanding people is evolving rapidly. Successful companies
are adapting to this by building internationally experienced leadership
and equipping their people with the skills to lead in the diverse 21st–
century workforce.
We are already proud of our people culture, and we are committed to doing
even more. Our people tell us that our inclusive work culture, our global
mindset and our focus on quality make Ernst & Young a great place to work
and build their careers. Our clients tell us that in recent years we have
improved the effectiveness of our teams, our relationship building and
our provision of high-caliber people.
We aspire to have a leading people culture everywhere in the world.
Creating a culture that attracts and retains outstanding people and helps
them thrive leads to better service for our clients. We are investing in three
key elements of our culture that enhance what is important to our clients
and our people.
Inclusiveness — Recruiting outstanding people is just the start. Inclusiveness
means making sure all our people’s voices are heard and valued. This not
only helps attract and retain the best people, but also it helps get better
answers for our clients and our organization.
Development — Our approach to development involves offering the learning,
experiences and coaching all our people need to enrich their careers and
deliver the best results for clients, as well as offering additional programs
for current and future leaders of our organization.
Engagement — We want all our people to feel enthused by their work
and their colleagues and to be comfortable in an organization that gives
them the flexibility to achieve their professional and personal aspirations.
We engage our people in countless ways, from selecting the right people
to lead major change to taking an interest in our people as individuals, to
being sure to say thank you for a job well done.

20
 “Being flexible can open up new worlds
of opportunity.”
Distance learning

“Throughout my career I’ve been open to new

challenges, wherever they might take me,”
says US partner Lee Henderson. Lee started
his Ernst & Young career in our San Jose,
California, office in 1995, but a thirst for
learning and new experiences led him to
pursue an international career.
Lee was promoted to partner in 2006 and
that year moved to New York to work with the
Americas Client Service and Accounts Leader.
Just months later, Lee was asked to take on a
new role, but this time in London.
“I had boxes that I still hadn’t unpacked from
our move to New York, yet here I was, getting
ready to move my young family across the
Atlantic,” Lee recalls. “But sometimes career
paths aren’t linear, and being flexible can open
up new worlds of opportunity.”
While in London, Lee played an important
role in the formation of our EMEIA Area in
2008, and was later appointed Chief
Operating Officer for our UK and Ireland
Sub-Area Assurance practice. Along the way,
he continued working with technology sector
clients. In 2010, Lee returned to the US to
serve as audit engagement partner for a
Chicago-based insurance broker.
“I can’t say I’ve been following a master plan,”
Lee says. “But I’ve been guided by great
mentors as well as a passion for the business.
Moving around has shown me the importance
of getting outside my comfort zone and has
certainly built my skills and confidence.”

21
Global review 2010 People

Inclusiveness
As our clients become more global and expand into new markets, they
expect us to be equally diverse. We have a strong commitment to bringing
together the right teams for our clients from across our global organization.
These teams match our clients’ needs in terms of knowledge, skills and
cultural background.
Diverse teams are also proven to stimulate innovation and new ways of
problem solving. But they need an inclusive culture to help them function at
their best. Inclusiveness is all about making the diverse mix work. It’s about
equity and opportunity — making sure that differences are celebrated so
that talented people from any background can rise to the top, and ensuring A selection of our awards
that opportunities to develop and advance are available for all from day one.
Around the world, our people
Making sure that all our people’s voices are heard and valued not only helps culture is recognized by external
attract and retain the best people, but also it helps get better answers for organizations with prestigious
awards and accolades.
our clients and our organization. These include:

As the most globally integrated organization in our field, we encourage a CAREERS & the disABLED
magazine
global mindset in all of our people. We have made good progress on diversity Top 50 Employers, 2010 Readers’
and inclusiveness in recent years and we want to accelerate that progress. Choice, USA
Our leaders are accountable for delivery — for setting goals, developing DiversityInc
actions and monitoring results, and for engaging clients around diversity Top 50 Companies for Diversity,
and inclusiveness issues. USA, 2010
Employer Branding Awards
Excellence in Training Award,
India, 2009
Equal Opportunity for Women in
the Workplace Agency (EOWA)
EOWA Employer of Choice for
Women list, Australia, 2010
Fortune
100 Best Companies to Work For,
2010
Great Place to Work Institute
Best Workplaces in Canada, 2010
Great Place to Work Institute
Mexico
Best Companies to Work for
Women in Mexico, 2009
HR Alliance Awards
Best University Recruitment
Program in Germany, 2009
Progressive Employers
of Canada List, 2010
Stonewall Top 100 Employers
The Workplace Equality Index,
UK, 2010
Universum Group
Third in World’s Most Attractive
Employers — Global Top 50
Rankings, 2010
Working Mother
100 Best Companies, USA, 2010

22
“Getting people with different perspectives
perform their best.”
People tend to spark off each other and
together can deliver great results for clients.
Team bonding

“Our clients are working across borders

more and more. It’s natural as the world
becomes more global. So diverse teams
with international experience achieve the
best results for them,” says Mick Bardella,
an Ernst & Young Client Service Partner, whose
UK-based team represents six nationalities.
“Several members of the team recently
supported a client on a major bond issue,”
continues Mick. “The team needed to have
a wide range of geographic and industry
knowledge. Because of the team’s diverse
background, we could cover it exactly.”
Senior Manager Sonia Barnoff, a Canadian on
secondment to the UK from our San Francisco
office, is part of the team. She finds that working
in a diverse team creates special synergies.
“On the bond issue, I worked with British,
American and Russian colleagues and I found
that although we each had our own style of
working, it created an excellent dynamic.”
Mick agrees, “Getting people with different
perspectives together can deliver great results
for clients. People tend to spark off each other
and perform their best. It’s a really positive
experience for everyone involved.”
Sonia is certain that working in diverse teams
has had a profound impact on her career
and outlook. “It’s taught me so much,” she
says. “When I go back to the US, I can feel the
difference that being in London has made.
It’s such a multicultural city that you learn to
be flexible and adapt really quickly to other
cultures. That’s a really important skill in
today’s world.”

23
 “As a mentor, it’s important not only
the ups and the downs.”
share your own experiences — both
to show understanding, but also to
Rewarding relationships

“I hope this award inspires others by showing

you can strike a balance between career, family
and other commitments,” says Transaction
Advisory Services partner and working
mother Eva Ip, who has been named Young
Achiever of the Year by the American Chamber
of Commerce, Hong Kong, at its Women of
Influence Awards.
The award recognizes Eva’s quick career
progression since she joined Ernst & Young
in 2002. During that time she has led the
establishment of our Shanghai transaction
support practice and helped build our
Hong Kong Private Equity practice for the
Transaction Advisory Services team.
While juggling work and family life, Eva finds
time to mentor colleagues and sees her career
achievements as a way of encouraging others.
“I think, as a mentor, it’s important not only
to show understanding, but also to share
your own experiences — both the ups and the
downs,” Eva says.
“When I became a partner five years ago,
my mentor was hugely supportive. Knowing
I could draw on that support really helped
the transition from senior manager. It was
that experience which inspired me to mentor
others. Everybody needs that kind of support.”
Eva says that mentoring is not all give, however.
“As a mentor you should be taking from the
relationship, too. Mentoring has helped
me be more understanding of others and
strengthened my leadership and management
skills. The fact it’s a two-way street makes it
even more rewarding. It’s a relationship that
should be treasured.”

24
Global review 2010 People

Development
A work culture that focuses on people has to have personal development
at its heart. Our commitment to developing people helps build an engaging
and positive workplace that’s stimulating and rewarding. This way, we can
build the skills and knowledge we need to develop and retain the talented
people who will drive our future success and deliver a differentiated
relationship and service for our clients.
Our global learning and development framework is called EYU. It was
launched globally several years ago, and we continue to integrate it
throughout our business. EYU gives our people broader experiences and
empowers them to take ownership of their careers. It is designed for all
of our people and can be tailored to both individual and business needs
through learning, experience and coaching.
Learning — A global curriculum has been developed and implemented to
deliver consistent learning across our four Areas and service lines. We are
investing in improving the system to better balance virtual and classroom
learning.
We have re-engineered our milestone programs to combine networking and
career development opportunities from joining to retirement. We mark the
critical junctures in our people’s careers with events and special coaching
programs held around the world for interns, new employees, new managers
and new partners. We are currently making our induction program more
consistent around the world. In financial year 2010 more than 10,000
people attended “Welcome to EY” and in 2011 around 30,000 new joiners
are expected to attend.

25
Global review 2010 People

Our global learning curriculum has two primary objectives: first, to build
general business skills and acumen, and second, to constantly refresh and
enhance technical skills across our service lines to drive excellent client
relationships and service.
There are currently more than 16,000 courses on our learning and
performance management system, EY Leads. Over the 2010 financial year,
our people undertook more than six million hours of learning and completed
over 700,000 courses. EY Leads not only delivers learning, but also is used
to validate that people have had the technical training they require from a
regulatory perspective across our global organization.
Experience — We know that the most enriching and career-enhancing
experiences are gained on the job, and we recognize this as a formal part
of our career development framework. We are committed to helping our
people get the experiences they need, and our service lines plan assignments
in ways that not only give our clients high-quality service, but also provide
our people with the best experiences for their career development.
Career mobility is an important part of this commitment. We encourage and
support cross-border and cross-service-line placements through our Global
Exchange Program and Area-wide initiatives, such as our EMEIA Area’s New
Horizons program. Mobility helps people develop an inclusive mindset and
thrive in an increasingly global market, while matching our clients’ needs.
Our values
We also encourage our people to use their professional skills to give back to
their communities. Their communities not only benefit from their insights Who we are:
and talents, but also our people benefit in their careers and their lives — often People who demonstrate integrity,
enhancing their leadership, communication or project-management skills. respect and teaming
People with energy, enthusiasm
Coaching — Coaching is about authentic conversations between people and the courage to lead
at all levels throughout our organization — stretching from daily informal People who build relationships
on-the-job coaching to project feedback to periodic formal performance based on doing the right thing
reviews. We are improving our global tools and processes to provide
robust and focused feedback and mentoring. We have also increased
our investment in formal coaching. For example, we have launched
new partner-transition coaching programs and have communities of
coaching champions who facilitate programs and give feedback to
leadership on coaching.

26
“Use your experience and influence to make a
people doing extraordinary things.”
difference. You’ll get to meet extraordinary
Leading with our values

“Use your experience and influence to make

a difference. You’ll get to meet extraordinary
people doing extraordinary things. That’s my
advice to people starting their careers,” says
Kelly Grier, Chicago Office Managing Partner.
It’s advice that Kelly has followed herself.
In 2010, Kelly was chosen by the World
Economic Forum as one of its Young Global
Leaders — an exclusive group of high-achievers
under 40 whose purpose is to drive positive
social change. She joins Alexander Ivlev,
Russian Country Managing Partner, who
was named a Young Global Leader in 2007.
Kelly was nominated for her efforts in
promoting inclusiveness at Ernst & Young,
including developing a mentoring program
which was used as the blueprint for an
inclusiveness initiative across other Americas
Sub-Areas, and for the strategic direction
she has given to Ernst & Young’s work with
Perspectives Charter School. The Mayor
of Chicago commended Ernst & Young for
its achievements at the school, including
activities led by Kelly, such as securing funding
for classroom libraries and establishing a
mentoring program pairing students to
Ernst & Young people.
“I think what the Young Global Leaders
program represents — teaming, respect and
leadership — aligns directly with Ernst & Young’s
values. Ultimately it’s about using these values
to have a positive influence on others — at work
and beyond,” says Kelly. “I often say you are
a role model for the people around you and
coming after you. You can’t choose whether
or not to be one. You can only choose what
kind of role model you want to be.”

27
Global review 2010 People

Engagement
Workplace engagement — how people think, act and feel about their work —
has long been recognized as a powerful indicator and driver of productivity,
commercial success and employee retention. Its importance has been
amplified by the downturn and its impact on motivation.
We want our people to feel enthused by their work, their colleagues and our
organization, and to be comfortable in an organization that gives them the
flexibility they need to achieve their professional and personal aspirations.
We focus our efforts around engagement on three core elements:
conversation, choices and celebration.
Conversation — This is about listening to our people and engaging in open
and authentic dialogue at all levels of our organization. Our Global People
Survey is one of the ways in which we listen to our people. It helps us to
identify those areas where we are getting it right, and those areas where
we need to try harder — across all aspects of our business. The survey is
conducted every other year and tens of thousands of our people worldwide
take part.
Choices — The need for flexibility in the modern workplace is becoming
more pronounced as a result of business cycles or the multiple demands
of work, family and community that 21st -century workers face. We have
always supported flexible working arrangements, and our long-term aim
is to support and develop a flexible workforce that is responsive to the
needs of our clients and the needs of our organization while, at the same
time, motivating our people by offering choices in how, when and where
they work.
Celebration — Celebration is about reward and recognition. Our Chairman’s
Values Award program is a very important example of one way we
recognize people who bring their energy and dedication to work to make
a difference to their clients and the wider community. This year our annual
Chairman’s Values Award attracted more than 2,600 nominations from
across Ernst & Young. The awards celebrate those people who live our
values to the full.

28
Entrepreneurship

29
 Global review 2010

Entrepreneurship

“Our commitment to entrepreneurial

companies, in both emerging and
developed economies around the world,
helps ensure that we’re working with more
of tomorrow’s global leaders, today.”

Entrepreneurs make a difference. They not only have great ideas, but also
the drive to make them a reality. They use their fresh thinking and hard work
to create positive social change — bringing new concepts and products to
market, and creating jobs and wealth.
Globalization has empowered entrepreneurs. They thrive in high-risk and
high-reward environments — where creativity, innovation and flexibility can
bring real advantage and disrupt established players. Today, entrepreneurs
start out global because the internet and the opening up of international
markets has eroded the importance of a single home market. As a group,
entrepreneurs represent the best hope of creating sustained economic
growth around the world.
In developed economies where growth is still fragile, entrepreneurs have
a vital role to play in helping to turn the corner. Entrepreneurship will, over
the long run, do far more to create sustainable job growth and fuel economic
recovery than government stimulus. By constantly challenging the status
quo, entrepreneurs will create new jobs and even new markets.
In the emerging markets, entrepreneurship has an equally important role
in propelling future growth. As these economies modernize and become
more efficient and their state-owned enterprises privatize, entrepreneurship
and foreign direct investment play vital roles in creating employment.

30
 Creating a Better Place
“People don’t realize how big this
transformation is going to be,” says Gil Forer,
Ernst & Young’s Global Cleantech Leader.
“Moving to a more resource-efficient and
low-carbon economy — enabled by cleantech
— represents a new industrial revolution,
one that governments, multinationals and
start-ups will all play big roles in advancing.”
To help understand the direction the cleantech
revolution is heading, the Global Cleantech
Center hosts regular “Cleantech Ignition”
sessions that convene leading players in the
evolving ecosystem for in-depth discussions.
One of the pioneers of cleantech is Israeli-
American entrepreneur Shai Agassi, whose
bold vision of zero-emission transportation
led him to found electric vehicle (EV)
company Better Place in 2007. Agassi’s vision
encompasses not only EVs, but also, critically,
the network of charge spots, battery-switch
stations, software and services that support
them. The switch stations, which exchange
“Moving to a more resource-efficient
and low-carbon economy — enabled
by cleantech — represents a new
industrial revolution.”
charged batteries for depleted ones in less time
than it takes to fill a car with gasoline, allow
EVs to match the extended range of internal
combustion cars. Better Place has created
a new business model as well. It separates
ownership of the battery from the EV and uses
a service-based model to make EVs affordable.
By combining this technology and business
model, Better Place has created a scalable,
low-cost solution that could reduce the
dependency on oil and drastically cut the
world’s CO² emissions, while reducing the
cost of driving to just pennies per mile.
“Better Place is an early-stage company
that has the potential to change the world,”
explains Gil. “Companies such as Better Place
choose to work with us because they recognize
our long experience with emerging high-growth
businesses, and understand the role we’re
playing in fostering cleantech insight-based
discussion and debate.”
31
 From garages to greatness

“Our first meeting with Google was over lunch
at an Indian restaurant in Silicon Valley, back
in 1999, just before they received their first
venture-capital backing,” explains Dave Cabral,
Ernst & Young’s Global Client Service Partner
for Google. “Five people were there from
Google and, at the time, those were the only
five people who worked there. By the following
year they’d grown to 20 employees and we did
their first audit.”
Through the years Ernst & Young has helped
Google pass many of its milestones, including
strategic investments, its initial public offering
and acquisitions.
Many of our largest clients have been served
by us from their earliest stages. We’ve been
working with many of our technology clients
since long before they became household
names. We have worked with some of the
world’s best-known IT firms for more than
20 years and with well-known internet giants
for more than 10, and today we’re working
with the next generation of technology
leaders. We recognize the potential in these
high-growth companies and provide the help
they need to achieve it.
“Today, Google is one of our biggest global
clients — but we were just as interested in
working with them when they were five guys
we were eating some papadums with,” says
Dave. “Because whether a client is big or
small we only know one way to serve them —
the very best we can.”

“Today, Google is one of our biggest global

clients, but we were just as interested in
working with them when they were five
guys we were eating some papadums with.”

32
Global review 2010 Entrepreneurship

We have long recognized the potential of entrepreneurs. Over the past

three decades, we have been working with entrepreneurs, adapting our
experience, industry capabilities and resources to work for entrepreneurial,
fast-growth companies. We work with a range of businesses, from those
receiving their first venture funding through to large mid-cap companies,
whose value may be measured in billions of dollars.
Our work with entrepreneurs is an important part of our strategy for future
growth. In 1960 it took 20 years for the Fortune 500 to turn over by a third.
Today, it takes just four years. Our commitment to entrepreneurial companies,
in both emerging and developed economies around the world, helps ensure
that we’re working with more of tomorrow’s global leaders, today.
Entrepreneur Of The Year — celebrating entrepreneurs
We started the Entrepreneur Of The Year Awards program to celebrate
successful entrepreneurs, so they could share their stories, inspire others
and receive the recognition they deserve. Our first program took place in
1986 in Milwaukee, Wisconsin, in the United States. By 1987 it was held
across 11 US cities. And in 1993 the program started to expand
internationally. Today the program spans more than 140 cities in 50
countries, which together represent more than 90% of the global economy.
Over the past five years, more than 6,500 entrepreneurs joined the
Entrepreneur Of The Year alumni. A “who’s who” of both developed and
emerging markets, these alumni include many household names. Over half
of today’s top 100 NASDAQ companies have won Entrepreneur Of The Year,
and most received the award before they achieved top 100 status.
Ten years ago we decided to go global and started World Entrepreneur
Of The Year. Held annually in Monaco, Entrepreneur Of The Year country
winners compete for the World Entrepreneur Of The Year title. Past winners
include Michael Spencer of ICAP plc, Guy Laliberté of Cirque du Soleil and
Narayana Murthy of Infosys Technologies.
As an extension of the Entrepreneur Of The Year program, forums to share
knowledge and generate networking opportunities for the Entrepreneur
Of The Year alumni were held in 36 countries during 2010.

33
Global review 2010 Entrepreneurship

Working with emerging market entrepreneurs

Recognizing the potential of emerging market entrepreneurs, we are
planning to extend the Entrepreneur Of The Year program to 14 new
countries over the next 24 months. The most recent emerging markets
to join the program are Argentina and Vietnam.
We also support Endeavor, a not-for-profit organization that helps high-
impact entrepreneurs in emerging markets improve and grow their
businesses. We participate in Endeavor’s network, which covers more than
10 emerging markets and helps entrepreneurs by connecting them with a
network of seasoned business leaders, who provide mentoring, strategic
advice and inspiration. Endeavor’s goal is to transform emerging countries
by establishing high-impact entrepreneurship as the leading force for
sustainable economic development.
Endeavor builds five types of capital. Financial: creating jobs and wealth by
unleashing new talent. Human: developing leaders through hands-on training
and advising. Social: mobilizing networks to attract investors and business
mentors. Cultural: showcasing role models to inspire the next generation.
Intellectual: leading cutting-edge research to harness innovation.

34
 Delivering healthy returns

“Pharmaceuticals is probably not the first FTSE 250 Index. Since 2006, we have provided
sector that comes to mind when people Hikma’s group internal audit function across
think about business in the Middle East, but its 12 worldwide locations. And we have
it has a strong and growing presence,” says performed due diligence and valuations work
Waddah Barkawi, Ernst & Young’s Global Client on Hikma’s acquisitions and advised on the
Service Partner for Amman-based Hikma company’s supply chains and strategy.
Pharmaceuticals. Hikma, which was named
“With its operations across the Middle East,
Ernst & Young Middle East Entrepreneur Of
North Africa, the United States and Europe,
The Year in 2007, was founded by entrepreneur
Hikma has true global impact,” explains Waddah.
Samih Darwazah in 1978. Since then, it has
“Our global reach, our strong relationship
grown from just two products and sales of
and our understanding of entrepreneurial
US$150,000 to 4,000 products and sales
companies allow us to provide the kind of
of more than US$600 million across 49
service that Hikma deserves and demands.”
countries last year.
Ernst & Young has worked with Hikma on a
variety of projects over the years. In 2004, we
reviewed internal controls in the run up to the
company’s 2005 listing on the London Stock
Exchange, where it is a member of the

“Our global reach, our strong relationship

and our understanding of entrepreneurial
companies allow us to provide the kind of
service that Hikma deserves and demands.”

35
Global review 2010 Entrepreneurship

Initial public offerings

We are a market leader in guiding companies through successful initial
public offerings (IPOs). We are the number-one brand in IPO market share,
and, over the past five years, we have helped over 1,200 companies go
public around the world. Many of the emerging entrepreneurial companies
we have worked with have gone on to become major global organizations.
An IPO can be one of the best routes to funding growth for fast-growing
companies seeking to raise capital. But it’s not a decision that can be
taken lightly, and the most successful companies approach an IPO as a
transformational process rather than a pure financing event or an endgame.
Our “IPO Readiness” methodology and diagnostic, as well as our IPO
Retreats, help business leaders at an early stage of the planning process.
Our IPO Retreats are designed to help business leaders decide whether an
IPO is the right step for them and give advice on how best to approach and
prepare. The retreats provide attendees with a confidential environment
where they can hear other people’s experiences of IPOs and meet other
leaders in a similar position. By analyzing why companies go public — their
objectives and the results — and exploring alternative routes to finance, the
retreats offer a complete run-through of what is involved, allowing leaders
to test the waters without risking their businesses.
Venture capital
Our Venture Capital Advisory Group works with leading venture capital
firms and their portfolio companies in innovation hotbeds around the world.
Our aim is to give venture-backed emerging companies the best possible
start on their journey to market leadership.
Acting as a single point of contact for venture capital funds, our Venture
Capital Advisory Group adapts our global resources to the needs and issues
facing fast-growth companies and their investors. In addition to providing
quarterly insights, we hold regular workshops and coaching sessions, such as
IPO Readiness, to enable entrepreneurs to connect with the venture capital
community and with each other, and share and learn from leading practices.
Our Venture Capital Advisory Group approach has enabled us to deepen
our relationships with leading venture capital firms from Silicon Valley and
Tel Aviv to Beijing and Bangalore. It has also enabled us to focus on high-
growth companies in future growth industries, such as cleantech.

36
Global review 2010 Entrepreneurship

Cleantech
The world’s resources and natural environment are under unprecedented
pressure from population growth and increased consumption by an
emergent middle class. Resulting higher energy and commodity prices,
and concerns around climate change and energy security, are pressuring
companies and governments to transform to a more resource-efficient,
lower-carbon economy.
This transformation is being enabled by clean technology innovation.
Much progress has been made in cleantech in recent years, as evidenced by
increased private and public sector investment, the creation of new market
leaders, supportive new policies and regulations and a robust pipeline of
innovation in both technology and business models. In 2010, total worldwide
investments in clean energy are estimated at more than US$175 billion.
And its impact will only continue to grow. Many governments view cleantech
as an important source of job creation and have deployed cleantech
strategies to drive growth and competitive advantage by stimulating an
innovation-based economy.
Our Global Cleantech Center, one of our 16 global industry centers, helps
cleantech companies, corporations and governments to make the most
of opportunities and realize the benefits of cleantech in this transforming
world. As part of our commitment to this sector, each year we host a global
series of cleantech roundtables called ignition sessions. These bring
together key stakeholders including innovators, corporations, investors,
utilities, government and non-governmental organizations to discuss
cleantech issues. This year’s sessions, held in Munich, Shanghai and Silicon
Valley, focused on the consumer, supply chain and infrastructure issues
that need to be addressed to move electric vehicles from vision to reality.

37
Global review 2010 Entrepreneurship

Strategic Growth Forum

Listed by Forbes.com as one of its seven “get-ahead executive retreats”,
our Strategic Growth Forum, held in Palm Springs, California is one of the
United States’ most prestigious gatherings of high-growth, market-leading
companies. The annual event brings together top entrepreneurs and
world-leading CEOs, investors, industry experts and government officials.
It regularly attracts more than 1,500 attendees who come to network,
learn and hear inspiring stories from some of the world’s most successful
business people.
In 2010, the Strategic Growth Forum program covered topics such as
strategies for growth, the latest thinking on the transaction market and
Three growth stages
available capital, and the critical success factors of mergers, acquisitions
Emerging
and IPOs. Speakers included Bill Ford, Executive Chairman, Ford Motor Companies concentrate on
Company; A.G. Lafley, former Chairman, President and CEO, Procter & identifying the market opportunity,
Gamble; and Arthur Levitt, former Chairman, United States Securities available sources of funding and
the right people to help kick-start
and Exchange Commission. the business.
The Strategic Growth Forum has recently expanded outside of the US and Rapid-growth
the first event to be held in Brazil took place in October 2010. Companies focus their energies
on becoming a supplier of choice
Exceptional enterprise diagnostic for their most valuable customers,
In the 30 years that we have been dedicated to the entrepreneurial market on managing expansion and
securing additional capital to
and the 24 years that we’ve been running Entrepreneur Of The Year, we accelerate growth.
have worked with tens of thousands of entrepreneurial businesses. We have
Next-generation market leader
used the knowledge that we built up over the years to analyze why some
The best businesses turn their
companies rise to the top. The outcome was the Exceptional Enterprise attention to working effectively
diagnostic. We use this diagnostic to work with companies and take them across global markets, try to
balance the entrepreneurial
through the three growth stages that companies have to go through to
spirit with corporate culture
achieve market leadership — from emerging to rapid-growth to next- and ensure they optimize their
generation leader — the challenges they must address along the way, capital structure to help meet
shareholder expectations.
and the attributes they need to succeed.
Achieving market leadership
means successfully addressing
challenges in six areas:
1. Customer recruitment
and management
2. Finance
3. Managing risk
4. Operational effectiveness
5. People recruitment
and retention
6. Transactions and alliances

38
 World of opportunity
“Entrepreneurs drive economic growth
and social change,” says Greg Ericksen,
Ernst & Young’s Global Vice Chair — Strategic
Growth Markets. “They create jobs and markets
and their innovations enrich lives. But they
often don’t get the recognition they deserve.
We started Entrepreneur Of The Year and World
Entrepreneur Of The Year to celebrate their
positive contribution and inspire others.”
Greg has been involved with our Entrepreneur
Of The Year program from its beginnings in the
United States in 1986. He led its international
expansion and founded World Entrepreneur
Of The Year — the only global award for
entrepreneurs. World Entrepreneur Of The
Year celebrated its 10th anniversary this year.
In that time, Greg has met over 300 World
Entrepreneur Of The Year finalists — all of
whom have won Entrepreneur Of The Year
in their home countries.
“They’ve got passion, vision, resilience and
single-minded determination. These timeless
traits are what make these entrepreneurs and
their companies exceptional.”
“Thinking about the entrepreneurs that I’ve
met over the years and what’s changed and
what’s stayed the same, I think what’s changed
is that entrepreneurs today have more global
opportunities than they did just 10 years ago,”
Greg adds. “Information technology,
globalization and the rise of the emerging
markets have been good for all businesses,
but have been especially good for
entrepreneurs. They have the speed and
agility to take advantage of the opportunities
that these changes have presented.
“What’s stayed the same is the entrepreneurs
themselves. Entrepreneurs are still carving
out their own success. They’ve got passion,
vision, resilience and single-minded
determination. These timeless traits are
what make these entrepreneurs and their
companies exceptional.”
39
Global review 2010 Entrepreneurship

Corporate responsibility focus

One of the ways that we demonstrate our corporate responsibility is
through encouraging entrepreneurship as a tool to empower people,
generate jobs and strengthen communities around the world. We support
and serve entrepreneurship through the following international programs:
Endeavor, Corporate Responsibility Fellows Program, Entrepreneurial
Winning Women, Kiva and E-Mentor Corps.
Our Corporate Responsibility Fellows program sends high-performing
Ernst & Young people to high-impact entrepreneurs in Central and South
America for three-month assignments. These projects are designed to
use our people’s skills to improve the effectiveness of the entrepreneurs’
key business processes.
Our Entrepreneurial Winning Women program offers high-potential female
entrepreneurs personalized one-on-one business insights and access to
networks of established entrepreneurs, executives, advisors and investors
with the aim of helping them to take their businesses to the next level.
In addition to the US program established three years ago, Entrepreneurial
Winning Women was successfully launched in Indonesia in 2010, with
several other countries anticipated to launch in 2011 and 2012.
We also work with Kiva, the world’s first not-for-profit website that provides
person-to-person micro-lending. We have made an in-kind donation of
US$1 million of professional services and assist Kiva in increasing the
transparency of its micro-finance process.
In 2010, we joined the US State Department’s E-Mentor Corps, a new
program designed to match mentors in the US business community with
aspiring entrepreneurs from developing countries around the world.
Through E-Mentor Corps, an entrepreneur seeking mentorship can go
online and find a person with the expertise they need on everything from
securing financing to writing a business plan.

40
 Facts and figures

“Corporate activity and demand for our

services is picking up in many markets,
with the emerging economies leading
the world out of the downturn.”
Ernst & Young’s combined global revenues for the financial year ended 30
June 2010 were US$21.3 billion, compared with US$21.4 billion in 2009.
Ernst & Young’s 2010 financial year saw a mixed performance, with
decreases in revenue in the first half, offset by a strong rebound in the
third and fourth quarters. Revenues in the second half of the financial
year increased by 5.3% in US dollar terms.
The return to revenue growth in the second half of our 2010 financial
year was particularly strong in our Transaction Advisory Services and
Advisory service lines, which posted growth rates of 9.4% and 13.3%
respectively, benefiting from improved business confidence and an
increase in corporate activity. Our Assurance and Tax service lines saw
more modest growth in the same period, reflecting continued pricing
pressure that was more than offset by an increase in audit market share
and an increase in work from existing clients.
Across Ernst & Young’s four geographic Areas, our newly formed Asia-
Pacific Area recorded a 9.0% growth in revenues; the Americas, EMEIA
and Japan Areas showed 3.2%, 0.9% and 0.3% declines, respectively. All
Areas showed improvement in performance in the second half of 2010.
Over the past four years, we have invested more than US$1.2 billion,
mainly in the emerging markets. This commitment to the emerging
markets resulted in high single-digit to modest double-digit growth
in many markets, including Africa, China, India and Brazil. Based on
the success of our first global investment program, as well as the
opportunities we continue to see in the emerging markets, we will
continue to invest at comparable levels for the foreseeable future.
The momentum for growth is continuing into the 2011 financial year.
Corporate activity and demand for our services is picking up in many
markets, with the emerging economies leading the world out of the
downturn. We are well-positioned to benefit from that recovery as we
continue to invest in the future of our organization, whether it is new
geographic markets or the development of our people.

41
Global review 2010 Facts and figures

Performance and people

% change

Revenue by Area  US$ millions FY10 FY09 US$ local currency

Americas 8,373 8,647 —3.2 —4.6

EMEIA 9,551 9,636 —0.9 —2.9

Asia-Pacific 2,138 1,961 9.0 1.5

Japan 1,193 1,196 —0.3 —6.7

Total 21,255 21,440 —0.9 —3.5

% change

Revenue by service line  US$ millions FY10 FY09 US$ local currency

Assurance 10,061 10,141 —0.8 —3.9

Tax 5,671 5,822 —2.6 —4.1

Advisory 3,662 3,589 2.0 —1.2

TAS 1,861 1,888 —1.4 —3.2

Total 21,255 21,440 —0.9 —3.5

Revenue by client type

US$ millions

Total Total

21,255 21,440
12,354 12,385
Audit clients Audit clients
Ernst & Young is not a global corporate
structure where ownership, legal control,
or profits are consolidated at a central
parent entity. The financial information
presented here represents combined,
not consolidated, revenues, eliminates
inter-firm billings and includes expenses
billed to clients.

8,901 9,055
Non-audit Non-audit
clients clients

FY10 FY09

42
 Global review 2010 Facts and figures

People by Area FY10 FY09 % change

Americas 40,318 41,487 —2.8

EMEIA 67,771 68,732 —1.4

Asia-Pacific 25,628 26,851 —4.6

Japan 7,247 7,371 —1.7

Total 140,964 144,441 —2.4

People by service line FY10 FY09 % change

Assurance 58,438 60,938 —4.1

Tax 26,747 27,446 —2.5

Advisory 19,479 18,276 6.6

TAS 7,332 7,876 —6.9

Practice support 28,968 29,905 —3.1

FY10 headcount numbers reflect
personnel as of 30 June 2010. Total 140,964 144,441 —2.4

Fortune 2010 Global 500 Forbes 2010 Global 2000

% of companies served by Ernst & Young % of companies served by Ernst & Young

All other companies

in the index

17 % All other companies

in the index

1 Companies where Ernst & Young

revenues exceeded US$500k in FY10.
40 %

57 %
26 %
26%
Non-audit clients1 Audit clients
34%
Audit clients

Non-audit clients1

43
Global review 2010 Facts and figures

Offices worldwide

Americas EMEIA

Revenue US$ millions Revenue US$ millions Number of people

8,373 9,551
1—100

101—500

People People 501—1,500

40,318 67,771
1,501—3,000

3,000+

44
Global review 2010 Facts and figures

Asia-Pacific Japan Total

Revenue US$ millions Revenue US$ millions Revenue US$ millions

2,138 1,193 21,255

People People People

25,628 7,247 140,964

45
Global review 2010 Facts and figures

Global Executive

James S. Turley  John F. Ferraro  Albert Ng 

Chairman & Chief Executive Officer Chief Operating Officer Representative of Emerging Market Practices

Victoria Cochrane Steve Howe Norman Lonergan

Global Managing Partner Area Managing Partner Global Vice Chair
Quality & Risk Management Americas Advisory

Sam Fouad Yoshitaka Kato Pip McCrostie

Global Managing Partner Area Managing Partner Global Vice Chair
People Japan Transaction Advisory Services

Peter Griffith Mark Otty Christian Mouillon

Global Managing Partner Area Managing Partner Global Vice Chair
Operations & Finance EMEIA Assurance

John Murphy Lou Pagnutti Mark Weinberger

Global Managing Partner Area Managing Partner Global Vice Chair
Markets Asia-Pacific Tax

The Global Executive, our highest

management body, brings together the
three dimensions of Ernst & Young —
functions, services and geographies.

46
Global review 2010 Facts and figures

Leadership team Global Advisory

Council
James S. Turley  Chairman and Chief Executive Officer New York and London The Global Advisory Council includes
John F. Ferraro  Chief Operating Officer London approximately 40 senior client-serving
Victoria Cochrane Global Managing Partner — Quality & Risk Management London partners drawn from member firms
Peter Griffith  Global Managing Partner — Operations & Finance London across the four Ernst & Young Areas.
Sam Fouad  Global Managing Partner — People London
John Murphy  Global Managing Partner — Markets  London These partners, who otherwise do
Norman Lonergan  Global Vice Chair — Advisory  London not hold senior management roles,
Pip McCrostie  Global Vice Chair — Transaction Advisory Services London are elected by their peers.
Christian Mouillon Global Vice Chair — Assurance  Paris They advise Ernst & Young on policies
Mark Weinberger Global Vice Chair — Tax  Washington, D.C. and strategies. The approval of the
Global Advisory Council is required
Steve Howe Area Managing Partner — Americas New York for a number of significant matters
Trent Henry Canada Toronto that could affect the organization.
Deborah Kissire East Central (US) McLean
Carmine DiSibio Financial Services Organization New York Oscar Aguirre  Mexico City
Ronen Barel Israel Tel Aviv Laurence Avram Diday  Paris
Alberto Tiburcio Mexico and Central America Mexico City Charles Barone Chicago
Anthony Anderson Midwest (US) Chicago John Belli Irvine
Mark J. Manoff Northeast (US) New York Coen Boogaart Amsterdam
Jorge Menegassi South America São Paulo Johan van den Bos Amsterdam
Karole Lloyd Southeast (US) Atlanta Owen Chan Hong Kong
David Alexander Southwest (US) Dallas John Cole London
Kay Matthews West (US) San Jose Loutfi Echhade Riyadh
Christoph Ehrhardt Stuttgart
Mark Otty Area Managing Partner — EMEIA London Eric Golenvaux Brussels
Ajen Sita Africa Johannesburg Francisco
Pieter Jongstra BeNe Rotterdam   González Carrera Madrid
Karl Johansson CIS Moscow Kelly Grier Chicago
Philip Hourquebie Central and Southeast Europe Istanbul Katsuhiko Hara Tokyo
Jean-Pierre Letartre FraLux Paris Alexei Ivanov Moscow
Andy Baldwin Financial Services Organization London Craig Johnson Chicago
Georg Graf Waldersee GSA Berlin Sofia Kalomenides Athens
Rajiv Memani India Gurgaon Lynn Kraus Sydney
Donato Iacovone Mediterranean Milan Mylene Levac-Wolf Montreal
Abdulaziz Al-Sowailim MENA Riyadh Marc Levy New York
Torstein Hokholt Nordics Oslo Pekka Luoma Helsinki
Scott Halliday UK&I London Michael Lynch-Bell London
Kreesen Naidu Durban
Lou Pagnutti Area Managing Partner — Asia-Pacific Hong Kong Winston Ngan Singapore
Steven Phan Asean Singapore Vic Noel Manila
Keith Pogson Financial Services Organization Hong Kong Danita Ostling New York
Albert Ng Greater China Shanghai Tony Pampena Toronto
SeungWha Gweon Korea Seoul Luiz Carlos Passetti São Paulo
Rob McLeod Oceania Sydney Gunther Ruppel Frankfurt
Sung Ho Shin Seoul
Yoshitaka Kato Area Managing Partner — Japan Tokyo Amitabh Singh Gurgaon
Daniel Smith Seattle
Steve Almassy Global Vice Chair — Office of the Chairman Thomas Stenz Zurich
Accounts/Industry London Penny Stocks London
Ratan Engineer Asset Management London John Thomopoulos New York
Mike Hanley Automotive Detroit Akira Toda Tokyo
Bill Schlich Banking & Capital Markets New York Lars Träff Stockholm
Gil Forer Cleantech New York Michael Wachtel Melbourne
Howard Martin Consumer Products London C.Y. Wang Los Angeles
Philippe Peuch-Lestrade Government & Public Sector Paris Steve Wills London
Pete Porrino Insurance New York Donald Zimmerman Atlanta
Carolyn Buck Luce Life Sciences New York
Glen Giovannetti Life Sciences Boston
John Nendick Media & Entertainment Los Angeles
Mike Elliott Mining & Metals Sydney
Dale Nijoka Oil & Gas Houston
Ben van Gils Power & Utilities Dusseldorf
John Harley Private Equity London
Howard Roth Real Estate New York
Patrick Hyek Technology San Jose
Vincent de La Bachelerie Telecommunications Paris

Beth Brooke Global Vice Chair — Public Policy, Sustainability

and Stakeholder Engagement Washington, D.C.

47
Global review 2010 Facts and figures

Areas and Sub-Areas

Americas EMEIA Asia-Pacific Japan

Canada Africa Asean

Angola, Botswana, Brunei, Cambodia,
East Central (US) Congo, Democratic Guam, Indonesia,
Financial Services Republic of the Congo, Laos, Malaysia,
Organization Equatorial Guinea, Maldives, Mongolia,
Bahamas, Bermuda, Ethiopia, Gabon, N. Mariana Islands,
Cayman Islands, US Ghana, Guinea, Philippines, Singapore,
Ivory Coast, Sri Lanka, Thailand,
Israel Kenya, Madagascar, Vietnam
Mexico and Central Malawi, Mauritius,
Mozambique, Namibia, Financial Services
America (MECASA) Organization
Costa Rica, Dominican Nigeria, Rwanda,
Republic, El Salvador, Senegal, Seychelles, Greater China
Guatemala, Honduras, South Africa, Tanzania, China, Taiwan
Mexico, Nicaragua, Uganda, Zambia,
Zimbabwe Korea
Panama
BeNe Oceania
Midwest (US) Australia, Fiji,
Belgium, Netherlands
Northeast (US) New Zealand
CIS
South America (SASA) Armenia, Azerbaijan,
Argentina, Bolivia, Belarus, Georgia,
Brazil, Chile, Colombia, Kazakhstan, Russia,
Ecuador, Paraguay, Ukraine, Uzbekistan
Peru, Uruguay,
Venezuela CSE
Albania, Bulgaria,
Southeast (US) Croatia, Cyprus,
Aruba, Barbados, Czech Republic,
Jamaica, Netherlands Estonia, Greece,
Antilles, Puerto Rico, Hungary, Latvia,
Trinidad and Tobago Lithuania, FYR of
Macedonia, Malta,
Southwest (US) Moldova, Montenegro,
West (US) Poland, Romania,
Serbia, Slovakia,
Slovenia, Turkey
FraLux
Algeria, France,
Luxembourg
Financial Services
Organization
GSA
Austria, Germany,
Liechtenstein,
Switzerland
India
Mediterranean
Italy, Portugal, Spain
Middle East and North
Africa (MENA)
Afghanistan, Bahrain,
Egypt, Iraq, Jordan,
Kuwait, Lebanon,
Libya, Morocco,
Oman, Pakistan,
Palestinian Authority,
Qatar, Saudi Arabia,
Syria, Tunisia,
United Arab Emirates
Nordics
Denmark, Finland,
Iceland, Norway,
Sweden
UK&I
United Kingdom,
Republic of Ireland

48
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About Ernst & Young

Ernst & Young is a global leader in assurance,
tax, transaction and advisory services.
Worldwide, our 141,000 people are united
by our shared values and an unwavering
commitment to quality. We make a difference
by helping our people, our clients and our
wider communities achieve their potential.
For more information, please visit www.ey.com
Ernst & Young refers to the global organization of member firms
of Ernst & Young Global Limited, each of which is a separate
legal entity. Ernst & Young Global Limited, a UK company limited
by guarantee, does not provide services to clients.

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