mckinsey will pay a fine of more than $122 million to end an investigation into a scheme to bribe public officials in South Africa. An opportunity to verify the presence of this type of structure on the continent. Decryption.
Before getting to the heart of the matter,it is appropriate to explain what a consultancy company is. these are companies that provide consultants to their clients. their mission: take stock of a certain situation. Once this is done, they express their opinions or recommendations. These customers can be anyone, from large international groups to states and institutions. The use of these structures has a cost and obviously changes depending on the resources put into them, but count several thousand euros per day, that for a consultant!
Different customer statuses
States and governments are very fond of this type of structure. They allow them to develop their development strategy. Dozens of such structures provide consultancy to different governments,for example McKinsey,PWC,KPMG,Boston consulting Group,which are international groups,but there are also local companies operating on the African continent. Furthermore, globally, the sector is experiencing annual growth of at least 10%.
These companies are in high demand.Illustration a Senegalwith the Senegal’s emerging planthe first draft of which was developed by the American consultancy firm McKinsey which outlined the country’s development axes. There is also theSouth Africa. Between 2012 and 2016, the same firm McKinsey obtained millions of dollars to advise on the development of two public companies: Eskom for electricity and Transnet for transport!
Lots of detours
according to the American justice system, which collaborated with the South African authorities, McKinsey bribed, thru intermediaries, the executives of these two companies, in exchange for confidential information on the procedures for awarding lucrative consultancy contracts that brought in almost 85 million dollars. Except that these two companies practically went bankrupt precisely because of widespread corruption, the exposure of which became a state scandal.
So obviously this is not a matter of generalizing. Consulting firms and their advisors, although often discreet or even invisible, are not all actors in corruption. And after this agreement between the Justice American and mckinsey $122 million to end legal proceedings in the United States and America South Africathe company stated that today it was a different group than when the events occurred. A fine to settle every score that goes wrong in South Africa where some would have liked to see the culprits brought before a criminal court. And faced with the furore caused by this affair, the South African government decided not to collaborate with McKinsey for the planning of the summit G20 which will be held next year in Johannesburg!
Read alsoClimate: In Australia, McKinsey suspected of conflicts of interest in its government consulting activities
How can governments ensure they select reputable consultancy firms in light of recent ethical violations?
Interview Wiht Dr. Emily Thompson,Expert on Consulting Ethics adn Public Sector Management
Time.news Editor: Thank you for joining us today, Dr. Thompson. With McKinsey & Company’s recent decision to pay over $122 million to settle an inquiry into bribery in South Africa, what are your initial thoughts on this case?
dr. Emily Thompson: Thank you for having me. This case highlights the darker side of consultancy work, especially in regions where governance structures might potentially be weaker. The fact that McKinsey was implicated in bribing public officials underlines the need for stricter oversight and clarity in the consulting industry, especially in emerging markets like South Africa.
Time.news Editor: It appears that the investigation involved allegations of bribery related to two major public companies, Eskom and Transnet. How does this impact the public’s trust in consultancy firms?
Dr. emily Thompson: Trust is critical in this industry. When large firms, such as McKinsey, engage in unethical practices, it shakes public confidence not just in the firm itself but in the entire consulting sector.Clients, especially governments, rely heavily on these firms for strategic guidance, and cases like this can lead to skepticism about their motivations and recommendations.
Time.news Editor: McKinsey has stated that it is a different organization today compared to when these events occurred. Can organizations truly change their culture and practices after such scandals?
Dr. Emily Thompson: They can, but it requires a genuine commitment to systemic change. Organizations must implement stringent ethical guidelines, enhance training on compliance, and foster an internal culture that emphasizes accountability. Simply paying fines does not achieve lasting change; it’s about creating an environment that discourages unethical behavior.
Time.news Editor: What implications do these events have for governments and other clients considering engaging consultancy services in Africa?
dr. Emily Thompson: Governments should exercise caution and conduct thorough due diligence before partnering with consultancy firms. They must evaluate not only the firm’s past performance but also its ethical track record. Engaging local firms that understand the context and can provide tailored insights may frequently enough be more beneficial and safer.
Time.news editor: The consulting industry is reportedly experiencing annual growth of at least 10%. How can firms maintain this growth while ensuring ethical practices?
Dr. Emily Thompson: Firms must prioritize ethical standards as much as profit margins. Establishing a robust compliance system, being clear with clients, and prioritizing sustainable practices can help. Additionally, fostering an open dialogue about ethics within the firm can encourage employees to voice concerns without fear of repercussions.
Time.news Editor: Considering the consequences faced by McKinsey, what practical advice would you provide to readers who may work in or with consulting firms in the future?
Dr. Emily Thompson: Be vigilant and informed. Educate yourself about the ethical practices of the firms you work with. Always prioritize transparency in partnerships and seek to understand the implications of any deal. If something seems off, question it—ethical integrity is key to sustaining not just a successful career, but also the sector’s future.
Time.news Editor: Thank you, Dr. Thompson, for providing these valuable insights. It’s crucial for both clients and firms to understand the ripple effects of their actions in the consulting industry.
Dr. Emily Thompson: Thank you for having me. It’s essential we continuously examine these issues to promote a more ethical consulting landscape.