Punit Renjen, who grew up in Haryana’s Rohtak, has touched the pinnacle of corporate success since he moved to the US some 40 years ago. The CEO Emeritus of Deloitte—who took the consulting giant to the top of the heap of the Big Four as Global CEO and stepped away from the post on December 31—hasn’t forgotten his roots; he still maintains a strong connection with Rohtak. In an interview with Business Today’s Global Business Editor Udayan Mukherjee, Renjen talks about the future of Deloitte, the wealth gap, mental health, climate change and the India story. Edited excerpts:
Q: You recently stepped away from your role as Global CEO of Deloitte to continue as CEO Emeritus. Do you feel confident of having armed Deloitte with the tools to maintain its position at the top of the Big Four?
A: It has been quite a journey in an entire partnership spreading across 400,000 professionals to get us to the top of the heap. The credit really belongs to the partnership and to our professionals. It is wonderful to be the No. 1 professional services firm in the world. And as you rightly said, it takes tremendous effort to get to that point, and it takes additional effort to stay at that point. I believe that Deloitte is positioned extremely well. The strategy that we have implemented is still valid and we need to keep executing that. We cannot take our eye off the ball. This is a highly competitive space, and we have to continue to execute. There are no guarantees.
Q: There will be many challenges along the way, including a move globally of separating the accounting and consulting arms of professional services companies like Deloitte, citing competition laws. Is Deloitte prepared for such a potentially disruptive move?
A: Regulators in the UK are talking about operational separation to ensure we serve our clients, particularly our audit clients, with clear independence and objectivity, and that’s exactly what we have been doing. Our audit quality and results cited are testaments to that. We made a decision back in June that we are not going to separate our business and that the multidisciplinary model or MDM is core to our strategy. The private partnership culture is core to Deloitte and has been a key ingredient to our success. So, we are going to persist with this and persist with high audit quality, which is central to who we are, and persist in delivering to our clients and hopefully, as a result, remain anointed the No. 1 firm.
Q: Billionaire investor Ray Dalio recently told us that the wealth gap is one issue which bothers him more than most other economic issues today. In your conversations with large corporations, do things like this come up frequently? Do CEOs recognise the importance of it?
A: When I came to the US 40 years ago, the prevailing wisdom was that the business of business is business—focus on the business fundamentals and leave everything else to the greater society and the community. That has changed. I believe, increasingly, business leaders believe that they cannot be successful if the community that they live in and work in is not successful. So, giving back to the community is incredibly important. At Deloitte, we are focussed on minority communities and getting them to college so that we can reduce the income gap through education. Here is the other thing—my most valued asset is my 400,000 professionals. Getting them involved in their own communities is an engagement strategy that is something that they value and commit to. So, we are not just collaborating with other NGOs and putting money in; we are involving our people in this world-class effort. And the progress has been remarkable. We have impacted nearly 40 million individuals so far, and I’m confident that we will get to the 100 million number that we have committed to.
Q: Yet, take an issue like windfall taxes. On one hand, governments are saying that if you make more money as a windfall, you need to give it back to the people who need it, but there is a lot of pushback from corporations such as energy companies. How do you reconcile these two?
A: When we talk about windfall taxes, you have got to take the larger perspective. Businesses make investments so that they have a certain return and they take the risk. In return, they need certainty and if you change the rules of the game mid-stream, that is not conducive to an investment thesis. I will respond to your question with this: increasingly, it is in a business’s interest to look at all stakeholders and take a longer-term perspective. I would argue that it may be easier for a private enterprise like Deloitte than a public enterprise that has to report every quarter. But a broader view is warranted around all kinds of issues like income equality and climate. Addressing climate change is the big issue of our generation, and businesses need to take a longer-term view and ensure they are doing the right things in their business and the ecosystem.
Q: ESG has been in focus with the recent COP27 Summit where there seemed to be a lot of anger among participants who feel that the large countries and corporations are only offering lip service while kicking the can down the road, and deliberately not implementing anything which is meaningful. Is that your sense too?
A: Oh, I think businesses are cognizant of the risks that climate change poses to their business and to society at large. You just need to look at what has happened in Pakistan with the monsoons in 2022 to grasp the enormity of the problem. The big climate events that we had all over the world in 2022 have had a direct impact because it impacts our communities, and it impacts our business directly. I think there is a clear understanding that action needs to be taken.
I can give you my example at Deloitte. When you are a $60-billion organisation like we are, we buy a lot of stuff, and we are working with our suppliers to make sure that they are consistent with the commitments on climate change that we have made. And I have seen this happen in all the forums that I participate in across the board; businesses not only recognise that there is a climate emergency, they are making the effort required to make the change. Could it go faster? Absolutely. Does it require all hands on deck? Absolutely. This cannot be solved by the government alone; it cannot be solved by NGOs; it has to be solved by the government, NGOs and the business community together. We need to invest something like $3.5-5 trillion over the next 20 to 25 years to move away from a carbon-based economy to a more sustainable economy. I know there is a lot of negative news, but there is also some good news in terms of the progress that has been made. More needs to be done.
Q: Let me ask you a few questions on India. There is a lot of excitement around this China plus one opportunity for India. When you talk to large clients globally, do they look at India as a potential manufacturing destination? Are they confident that India can make the transition from a services-led economy to a manufacturing powerhouse in reality?
A: Absolutely. I sit on the US-India CEO Forum, and this is one of the key aspects that [Commerce] Minister [Piyush] Goyal and [US Commerce] Secretary [Gina M.] Raimondo are leading, and I’m very confident, very bullish that it is going to be a multi-faceted growth story. Services are about $250-300 billion today, and I don’t see why it cannot be a trillion-dollar part of the mix. [With] the realignment of global supply chains, India, with its large base of capability and large domestic market base, can and should be a destination for resilient supply chains. Apple setting up facilities in Tamil Nadu and expanding that facility is a good example of that. So, I see no reason why India cannot take advantage of this realignment of supply chains that came to the fore through the pandemic. I’m actually very bullish on that.
By the way, I think India can and should take a leap in some of the climate-based transitions as well, whether it is in renewables or green hydrogen, but there is a piece that is often ignored, and that is nature-based solutions. To get us from where we are today to where we need to go, we certainly need to rely on technology, but we also need to focus on nature-based community answers to this climate emergency we are facing. If you have been to Delhi or Rohtak this time of the year, the air quality is horrendous because of stubble burning, and the answer there is a nature-based, community-oriented solution that we at Deloitte are piloting with the state of Haryana. So, that is another great area in which India can and should take the lead.
Q: You speak of Rohtak very fondly. Let me ask what you remember of that time because I believe it was a twist of fate, of you getting a Rotary Foundation scholarship which started you on your global journey…
A: You are absolutely right that the Rotary Foundation scholarship was a stroke of luck and it certainly changed the trajectory of my life. It is really important to never forget where you are from. And I’m from Rohtak, but the Rohtak of my youth is very different from the Rohtak of today. I remember there were only a handful of cars around, Maruti had just come, and I left Rohtak in 1984. So, Rohtak in 1984 was a very different place than it is today. My 82-year-old mother still lives in Rohtak in the same house that I grew up in, and it’s truly wonderful to be from that town. When you look back at your life, there are certain inflexion points and the Rotary Foundation scholarship was certainly an inflexion point. Sights unseen, never been on an airplane, never been outside of the country till then. But I got a chance to leave, and it certainly changed my life.
Q: I want to ask you about another issue which is becoming more apparent post-Covid-19. Everywhere, from sports to management circles, there is a lot more talk and awareness about mental health. You yourself faced mental health issues in your career. Perhaps you could talk about that?
A: You have hit on a very important point. The pandemic, and what we all went through over the last two years, has really contributed to mental stress and mental health. You know, I went through it, and back in the ’90s we didn’t talk about it as openly as we do now. I had been with Deloitte for seven or eight years, and been put up as a Partner, when I decided to step away and take a sabbatical. We call it a sabbatical now, but really it was a leave of absence back in 1994. I spent six months reassessing what I was going to do with my life. I went back to Deloitte, got back on the Partner track [and] became a Partner two years later in 1996. But looking back at my life, that break was central to my mental health, and my ability to recharge and go back and contribute. I would have not been a Partner and certainly would have not reached the Global CEO level at Deloitte if I hadn’t taken that break. And I would not have met my future wife. I met her during that break, and she had such a profound impact on my life.
The last two years has impacted all of us, including me. Working through Zoom certainly has its benefits, but not having the ability to interact with people, waking up at ungodly hours and working late into the night has certainly had an impact, and the first thing we need to do is to recognise [that] we need to talk about it; we need to acknowledge that mental health is like any other aspect of health and it needs to be talked about openly. One of the silver linings from the pandemic was the fact that we started acknowledging and talking about mental health issues and putting it at the right level within a corporation. If you don’t have a mentally healthy individual working for your business, you are not going to get their best. If my team is not physically and mentally healthy, then they are not going to bring their best self to work, and be able to keep Deloitte ahead of its rivals in a fiercely competitive industry. So, it is again the right business strategy to focus on mental health.