How Big of a Corporate Scandal Is PwC Facing After Oscars Flub?

For 82 years, accounting and consulting firm PwC has enjoyed a reputational boon from handling the balloting process at the Academy Awards.

Now its hard-won image as a dependable partner, in year 83, is under threat.

The company has apologized for a colossal mistake at the 89th Academy Awards on Sunday night when actors Faye Dunaway and Warren Beatty wrongly announced the top Oscar went to La La Land, instead of Moonlight.

The presenters, it turned out, had been given the wrong envelope by tabulators PwC, in this case the one awarding Emma Stone for best actress for her role in La La Land. The representatives from PwC, formerly known as PricewaterhouseCoopers, eventually corrected the mistake on air, but it’s not clear yet how the wrong envelope ended up in the hands of the Bonnie and Clyde stars.

Whatever the reason, it’s been a cue for endless jokes and hilarity around the world.

For London-headquartered PwC, it’s anything but funny.

According to Nigel Currie, an independent London-based branding specialist with decades’ worth of industry experience, this mistake is “as bad a mess-up as you could imagine.”

“They had a pretty simple job to do and messed it up spectacularly,” he said. “They will be in deep crisis talks on how to deal with it.”

Brands go to extraordinary lengths to protect their image and reputation and to be seen as good corporate citizens. History is littered with examples of hard-won reputations taking a nosedive — from sporting legends Tiger Woods and Lance Armstrong to business giants like BP following the Deepwater Horizon oil spill disaster and Volkswagen after its emissions cheating scandal.

Crisis managers say PwC has no other option than to front-up immediately and explain exactly what happened in order to contain the damage to its reputation and brand and plot a way forward where there’s no repeat.

“There will certainly have to be accounting for this error,” said Jeremy Robinson-Leon, principal and chief operating officer 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, which originated in London over a century ago, was quick to apologize to the movies involved, Beatty, Dunaway and viewers, but has yet to fully explain what happened.

“The presenters had mistakenly been given the wrong category envelope and, when discovered, was immediately corrected,” it said in a statement. “We are currently investigating how this could have happened, and deeply regret that this occurred.”

In fact, it took over two minutes on air, during which time the La La Land team gave three acceptance speeches, before PwC corrected the mistake onstage.

PwC’s representatives were Brian Cullinan, a partner at the firm — and, according to his bio on the company’s website, a Matt Damon lookalike — and Martha Ruiz, the second woman to serve as a PwC Oscars tabulator.

Cullinan is the lead partner for the Academy of Motion Picture Arts and Sciences, including the annual balloting for the Oscars ceremony. He has been part of the balloting team since 2014.

Ruiz, a 19-year veteran at PwC who specializes in providing tax compliance and advisory services to entertainment clients in Southern California, joined Cullinan as the Oscars balloting co-leader in 2015.

In a promotional video on the company’s website ahead of Sunday’s show, Cullinan said he and Ruiz are the only two who know who the winners are on the night of the awards before they are announced.

“There are 24 categories. We have the winners in sealed envelopes that we hold and maintain throughout the evening and hand those to the presenters before they walk out on stage,” he said.

According to Mike Davies, PwC’s director of global communications, both Cullinan and Ruiz would have had a briefcase on either side of the auditorium to hand out the envelope for the category to be announced. Each briefcase would have had one envelope of each category winner.

In his remarks before the show, Cullinan had said PwC’s relationship with the Academy Awards is testament to the firm’s reputation in the market for being “a firm of integrity, of accuracy and confidentiality and all of those things that are really key to the role we have with the Academy in counting these ballots.

“But I think it’s really symbolic of how we’re thought of beyond this role and how our clients think of us, and I think it’s something we take very seriously and take a lot of pride in.”

Robinson-Leon said it was important to remember that counting ballots is not PwC’s core business but that it will have to be serious about dealing with the aftermath of Sunday’s embarrassment and media fallout.

“This can happen once and there will be relative forgiveness, but it can’t happen twice,” said Group Gordon’s Robinson-Leon. “If they were to do this again, that could have an impact on the brand. If this is an isolated incident, the long-term impact on the brand will be minimal.”

Watch the moment here.