As Oscar season approaches, who can forget the very serious face on Jordan Horowitz as he held up the correct winner for Best Picture for the 89th Academy Awards? Despite powerhouse accountancy firm PricewaterhouseCoopers (PwC) at the helm, things took a wrong turn.
So what happened? News outlets and social media were quick to focus on presenters Warren Beatty and Faye Dunaway. However, as the layers of onion were peeled, the public learned about the root causes: prohibited social media use, mistaken envelope delivery, and a significant delay in addressing the issue, which allowed the wrong producers about two minutes to give thanks in a bubble of blissful ignorance.
PwC had been the firm of choice of the Academy for over 80 years when this happened, and though this issue had only occurred one other time, it proves even established, reputable systems can break down. From the outside looking in, you might think handing the right envelope to the right person at the right time is a seemingly simple task. You would think the same about driving close to home, which according to many surveys and insurance data, is where most accidents occur. How are these two situations connected? Because we are most comfortable in roads we’ve traveled over and over, and therefore might be more susceptible to distraction.
So often, corrective action plans (CAPs) do not address the true root causes. In this example, the public was made aware of a few factors, but PwC may have identified even more. Was there a relaxed culture around adherence to protocol? Were there outside factors that distracted the two PwC partners onsite? Whatever was found, PwC took full responsibility for the issue and created a CAP, outlining a multi-step plan to avoid this type of issue from recurring. In addition, the Academy took ownership and will regularly review PwC’s policies and procedures to make sure something like this never happens again.
Compliance professionals will see correction, detection, and prevention controls all over this. If any Tinseltown executives are reading, I am happy to provide my services to do some CAP validation during the big day.