Edinburgh-based Standard Life Investments said it voted its clients’ 465 million shares in Vodafone against Vodafone’s resolution to reappoint PricewaterhouseCoopers (PwC) as Vodafone’s auditors and against the resolution to determine their remuneration.
“During the year, the board’s audit and risk committee was notified by the PwC partner leading the audit of Vodafone that a company, for which a number of PwC partners were acting as administrators, was considering litigation against Vodafone,” said Deborah Gilshan, governance and stewardship director at Standard Life Investments.
“In our opinion, the appointment of PwC as administrators to this company after their appointment as auditors of Vodafone created a conflict, regardless of whether litigation against Vodafone is pursued.
“We understand that PwC considers no actual conflict exists to their position as Vodafone’s auditors.
“Confidence in, and independence of, auditors and the accounting profession has been dented by scandals, many of which are linked to the global financial crisis.
“Such an environment requires the highest standards of probity to rebuild trust.
“We appreciate the quality of the audit services provided by PwC and their engagement with us on this issue.
“However, we believe they, and the wider accounting profession, need to better balance their commercial interests with the ethical standards applied to conflicts, perceived or real.
“For the record, we do not have any concerns with how the board’s audit and risk committee dealt with the situation they were presented with.
“Indeed, we applaud them for their reporting on this and for the extra work they undertook during the year in dealing with it, as detailed in the annual report.”