GE’s Rehabilitation Starts With Steps Like This
The decision to review GE’s auditor suggests new CEO Larry Culp appreciates how crucial accountability and transparency are to the company’s survival.
Time for self-reflection?
Photographer: Goh Seng Chong/Bloomberg
General Electric Co.’s recovery won’t be achieved with a quick fix, but with a hundred small steps. New CEO Larry Culp just took another important one.
GE announced on Friday that it would invite bids for the job of the company’s independent audit firm, a move that may ultimately see its nearly 110-year relationship with KPMG severed. GE will retain the firm as its auditor for 2019, but for the first time appears to be acknowledging that the status quo is unsustainable. Only 65 percent of votes at last year’s annual meeting were cast in support of continuing to enlist KPMG’s services, down from about 95 percent the previous year. Both Institutional Shareholder Services Inc. and Glass Lewis & Co. had recommended a change in auditor, in a rare move for the proxy firms.