Profile: Margaret Cole, PwC UK

Margaret Cole, PwC‘I would never have taken a role where I wasn’t sitting at the top table. I make sure I have influence in how a firm goes about things,’ notes veteran litigator Margaret Cole, PwC’s UK general counsel and chief risk officer.

Stephenson Harwood-trained Cole joined the accountancy giant in 2012 to head its legal division after leaving the Financial Services Authority (FSA), where she headed its enforcement and crime division. Frequently cited in the media for her robust management style, Cole was the force behind transforming the FSA’s image from a low-key and disorganised regulator of the financial services industry to a tougher arbiter, tackling rogue behaviour by bringing far more prosecutions across the City.

Executing the FSA’s reinvention – a politically-charged task that involved overhauling a sluggish governance structure – coupled with early exposure to high-stakes litigation in private practice, allowed Cole to evolve from a purely legal to an all-round business adviser. These days, she is considered not only a respected figurehead within the in-house community, but also a c-suite operator at PwC. A member of the executive board, her responsibilities include managing a legal team, overseeing the firm’s reputation and regulation division, and issues relating to risk, quality and compliance.

There is plenty for Cole’s 126-strong legal team to grapple with. In late 2015, PwC settled a £1.6bn professional negligence dispute for an undisclosed sum days before the case was set to be heard in the High Court. It had added Deloitte and KPMG to its defence, and the case would have clarified the law relating to claims against auditors. Also in 2015, PwC was hit with a €578m professional negligence claim brought by British American Tobacco (BAT), stemming from PwC’s audit of Windward Prospects, in which BAT alleged PwC failed to fully account for the clean-up costs of a polluted river.

Court battles aside, the post-Brexit impact on London’s status as a financial services hub has tested Cole’s department in navigating the business through the uncertainty. For PwC and other financial institutions, the loss of passporting rights would be ‘catastrophic’, according to Cole.

She therefore considers the role of the GC as that of a ‘risk leader’, observing: ‘We have an opportunity that we must grasp to professionalise the risk function. Risk leaders must work out how to operate in a more efficient and effective way, which involves use of technology, new ways of thinking and clearer ways of approaching problems on a risk-based analysis.’

She adds: ‘People talk about compliance as if it’s the most boring thing. I have a compliance team which is woven into the fabric of the wider risk functions. I don’t have them sitting in a room, box-ticking every day. We have a lot of issues to deal with. Getting that right is a balance because you don’t want the business to be overwhelmed.’

Her other concern is the Senior Managers Regime, which requires firms to map out the roles of their senior managers and allocate responsibilities to them in order to make them individually accountable. It is arguable whether GCs, given their ascension up the corporate hierarchy in recent years, should also be held to account under the regime.

Women are made caricatures if they’re strong or fierce. The terminology used for women is very different to that used for men.

‘It’s probably proper that it does apply to general counsel,’ comments Cole. ‘In practice, however, the possibility of it being utilised with fixed consequences is possibly less likely. I understand the point; it will be extraordinarily difficult to say: “You did this bad thing and therefore you are liable.”

‘Will it cause a sea change in terms of lots of senior managers going on trial and losing their jobs? No, so it will not be as catastrophic as senior managers might think. But it could send the wrong message where people are terrified of doing anything, and feeling watched over and responsible for everything. The jury’s out.’

Despite the irony of the City’s former chief enforcer now coming under the regulator’s spotlight in her role as GC, Cole is accustomed to handling high-stress situations.

Preston-born Cole is the daughter of parents who both left school at 15. Her father worked as a fitter in a textile factory and her mother worked a number of unskilled jobs. But they insisted on Cole pursuing an education, right from attending Shakespeare plays as a child up to securing a place at Cambridge to read law. Her City career began at Stephenson Harwood, where she was mentored by senior litigator John Fordham. Opponents included Keith Oliver, now head of international at Peters & Peters, Ashurst disputes veteran Edward Sparrow and Freshfields Bruckhaus Deringer’s joint managing partner Chris Pugh.

She was fortunate to cut her teeth on major insolvency litigation in her early career, taking on the Maxwell family in a group action to recover the companies’ pension funds after the media tycoon Robert Maxwell died at sea. She secured a global settlement of £276m and was further involved in the landmark liquidation of the Bank of Credit & Commerce International (BCCI), which was forced to close by the Bank of England in 1991 triggering over 70,000 claims.

We don’t want to waste time explaining to law firms how we work. Those we use take the trouble to find out themselves.

And when the early 1990s saw a push by the American law firms into London, Cole was lured by White & Case to build out its litigation practice. She recalls: ‘I remember arriving at its offices in Moorgate, with an empty desk in an empty room, thinking: “What have I done?”’

Under Cole’s leadership, White & Case’s City disputes offering evolved over the course of a decade from a four-person team to a 50-strong practice. But feeling she had ‘done litigation for too long’, Cole once again found herself in search of a wider challenge and applied for the enforcement officer role at the FSA, where she would report to then chief executive Hector Sants.

She says the push into enforcement was a huge departure for the FSA, which appointed headhunters in a very public search to fill the role. ‘It’s a very different job from being a practising lawyer. At the beginning, the public mood was interesting. The FSA was seen as a thought leader, but principally a regulator that did supervision but not a lot of enforcement. Up until then it had a small enforcement function – always a last resort.’ Cole says she tried to make enforcement ‘much more about what the FSA was prepared to do’.

Multiple prosecutions and convictions came during Cole’s tenure. The rate of fines rose threefold – in her first year, civil fines totalled £17m and by 2011 rose to £66m, almost covering the body’s £67m budget. Famous arrests in the Square Mile included former Cazenove partner Malcolm Calvert for insider trading.

An ardent lobbyist for increasing sentences for such activity, Cole frequently interacted with then attorney general Peter Goldsmith to try to get the government to alter the regime so that the FSA could do a form of plea bargaining, like other prosecutors. ‘I wonder, would he say good things about me?’ she asks. ‘I was like a steamroller trying to get those issues through!’

Asked whether it bothered her being labelled a ‘ballbreaker’ during her stint as the City’s main enforcer, she laughs. ‘Not really. It’s inevitable when you do that job. You’re always going to be dressed up as a tough individual if you go down the enforcement route. Women are made caricatures if they’re strong or fierce and have jobs like that. The terminology used for women is very different to that used for men. It didn’t matter to me.’

An overhaul of the FSA’s structure came about in 2012 when a Conservative-led government divided the body in two, forming the Prudential Regulatory Authority, a subsidiary of the Bank of England, and the Financial Conduct Authority (FCA), intended to operate as a heavyweight watchdog.

Though instrumental in shaping her own hard-earned reputation, Cole found herself considering new options after unsuccessfully bidding for the FCA’s top executive job against Martin Wheatley.

After Wheatley was chosen to lead the FCA through its new structure, Cole landed a new role at PwC and, having taken a pay cut at the FSA, soared back into the wealthy lawyer brigade. At the time, partners at the Big Four firm were earning around £700,000. But Cole has not forgotten her FSA background and has invested in strengthening PwC’s functions in a bid to meet the expectations of increasingly robust regulators.

‘The financial crisis didn’t do many good things, but it brought to the fore that specialists needed to have a seat at the top table. The subject of how firms operate deep within their cultures and systems is something that can’t be ignored by senior leadership.’

Cole sends work externally to firms including Herbert Smith Freehills, Linklaters, Norton Rose Fulbright, Reed Smith and Taylor Wessing. Cole prefers to keep her external relationships with law firms informal, promising to give out ‘premium’ fee work if firms learn to understand how PwC works. But this, she says, is not easy. ‘There’s a nuanced culture and we don’t want to waste time explaining to firms how we work. Those we use take the trouble to find out themselves and get to know various partners. They are also aware that the regulatory environment is getting tougher for us.’

Admitting she is ‘quite tight on fees’, Cole is not a fan of schmoozing to secure new business. ‘I don’t tend to spend my life having lunches and fancy dinners with lawyers. It’s not me. I prefer a good sense of what they can give us and value for money. I’m happy to hear firms come and explain to me, but they must have a differentiating feature because I know they can all deliver certain levels of quality. I need to know if they can work with us and have new ideas.’

She concedes that the ultimate challenge facing large, established businesses in financial services will be to find new ways of being efficient but also doing things differently.

‘That’s how large businesses stay relevant and current. You change yourself. It’s not easy if you’ve been established for a long time to try and be cutting edge.’

At a glance Margaret Cole


  • 1985-90 Associate, Stephenson Harwood
  • 1990-95 Partner, Stephenson Harwood
  • 1995-2005 Partner, White & Case
  • 2005-12 Managing director of enforcement and financial crime, Financial Services Authority
  • 2012-present Chief risk officer and general counsel, PwC UK

PwC UK – key facts

  • Size of team 126
  • Annual legal spend (legal provisions and contingent liabilities) £14m (in 2016)
  • Law firms used Herbert Smith Freehills, Linklaters, Norton Rose Fulbright, Reed Smith, Taylor Wessing