How McKinsey & Co Fails as a Global Leader
— December 18, 2018
By Michael Posner
In stark contrast to this stellar record of accomplishment and the firm’s enviable global reputation, two recent New York Times articles paint a discordant portrait, focusing on a darker aspect of McKinsey’s global operations, namely its prominent role as a key advisor to authoritarian governments in places like China, Saudi Arabia, Ukraine and Turkey. In Saudi Arabia, for example, where the firm has been engaged in more than 600 projects since 2011, McKinsey recently produced an internal report that tracked critics who were promoting negative views of the kingdom on Twitter. According to the Times account, one of these people was subsequently arrested, while another said that two of his brothers had been arrested. McKinsey’s responded that the firm was “horrified by the possibility, however remote” that its report could have been misused. Yet, perhaps mindful of its extensive business relationship with the Saudis, the firm subsequently chose to participate in an investment conference in Riyadh in October that took place just weeks after journalist Jamal Khashoggi was murdered by Saudi agents in Turkey. It is now widely assumed that Khashoggi was murdered at the behest of the Crown Prince Mohammed bin Salman, McKinsey’s principal client.
McKinsey seeks to explain this and other controversial government contracts by saying that “like many other major corporations, including our competitors, we seek to navigate a changing geopolitical environment, but we do not support or engage in political activities.” Part of this changing geopolitical environment is the greater scrutiny now faced by global companies when they do business with governments that violate basic human rights, like the Saudis. And this scrutiny is particularly focused on corporate services that enable and support efforts by authoritarian leaders to undermine democracy and violate human rights.
Read the full Forbes article.
Michael Posner is a Professor of Business and Society and Director of the NYU Stern Center for Business and Human Rights.