So you thought Academy Awards’ faux pas was not a serious business?
Think again! PwC, the world’s leading accounting firm (which only a few weeks ago were basking in new surveys reaffirming their position at the top) have been the sole custodian of the Oscars’ ballot process for more than 80 years.
This time around too all was going smoothly… until it wasn’t. During the last moments of the 89th Academy Awards, La La Land was announced the winner of the Best Picture Award.
However, as the team of La La Land went on stage to give their acceptance speeches, the Oscars’ organising committee members came on stage to say that there was a mistake. La La Land producer Fred Berger, who nevertheless finished his speech concluded by saying "we lost, by the way", and it was announced that the real winner was Moonlight.
So what happened behind the scenes? Two PwC employees – Martha Ruiz and Brian Cullinan – were responsible for handing out the envelopes to the award presenters. Both had a set of envelopes containing the names of the winners. Added to this, both were required to memorise the name of every winner. And yet Brian Cullinan gave the wrong envelope to Warren Beatty.
To make matters worse, when Faye Dunaway announced La La Land as Best Picture, Martha both Cullinan and Ruiz seemed to have frozen and just stood where they were instead of immediately intervening to correct the mistake.
So what happens to the rock-solid PwC brand after this fiasco?
“There will certainly have to be accounting for this error,” said Jeremy Robinson-Leon, COO at New York-based public relations firm Group Gordon. “The onus will be on PwC, assuming they stay as partners, to institute controls to ensure this doesn’t happen again.”
PwC is now in damage control mode. The Academy’s faith in Cullinan has run out. According to Reuters, the organisers of the Academy Awards PwC announced that Cullinan and Ruiz would not work on the Oscars ceremony ever again.
"Once the error occurred, protocols to correct it were not followed through quickly enough by Cullinan or his partner," the accounting firm said in an official statement.
"It is potentially a significant dent to their brand," said Katie Sprehe, Director of Reputation Research at the Washington D.C. based APCO Worldwide. She notes that due to the nature of the blunder, it was being lampooned over social media, something an accounting firm like PwC are not equipped to handle.
While issuing a public apology and removing the two employees from the Oscars’ account, have somewhat taken the heat PwC, the firm will have to do more in order to repair their reputation.
According to Thomas Fladung, VP, Hennes Communications, which specialises in crisis management, "there's the old [saying], when you mess up, you fess up, and you fix up". He added that PwC will need to be transparent about what went wrong and how propose to ensure it will not happen again.
Before we call for blood, we should remember that PwC has had a flawless record with the Oscars for 83 years. Mistakes happen, and, in fact, brand equity is built to safeguard the brand when unavoidable blunders occur. Look at Samsung after Note7 or Volkswagen after dieselgate. The brands are tarnished but intact. Similarly, the reputation of an audit firm is largely pertinent, and even constrained, within the minds of the world’s accountants, CEOs, and finance professionals who won’t be attaching much importance to the Oscar balloting process.
That said, one thing is certain: there is zero room for error for PwC now.