Strengthened by McKinsey & Co. its ethics department after a series of high-profile controversies, including helping to sell the opioid “turbocharge” to Purdue Pharma LP.
The management consulting giant is hiring for a newly created position with its global “ethics allegations management team.” The “specialist” is responsible for “drinking and testing things” that may pose a risk to the company. McKinsey is also looking to replace its ethics director, a position that will help “ensure that we support a distinctive culture of integrity and ethical behavior in our company,” according to the job description, with a salary ranging from for $235,000 to $314,000.
“We are continuously improving these processes and capabilities, which include these behavioral roles,” said Neil Grace, a McKinsey spokesman. The company has more than quintupled its internal risk, legal, ethics and compliance staff over the past eight years, he said.
McKinsey’s lack of management in the past has resulted in some well-publicized bad deals. The consulting firm paid $641 million to settle ongoing lawsuits over its opioid work. Its South African branch has been embroiled in a corruption scandal and the company has received heavy criticism for moving too slowly to cut ties with Russia after its invasion of Ukraine.
In 2019, the company adopted “stricter” client selection policies, which require an analysis of whether its work harms people, especially vulnerable populations. The company says it is investing nearly $700 million over five years to strengthen its risk management teams and processes.
When Nick Lovegrove worked at McKinsey as a managing partner about a decade ago, the ethics and compliance department was “virtually non-existent,” he says.
“Now McKinsey is getting a lot of allegations made against it,” said Lovegrove, who is now a professor at Georgetown University’s McDonough School of Business. “That’s not necessarily because it’s doing worse things, but because the recently announced cases have both raised its profile and made it more vulnerable.”
The ethics team, which reports to chief compliance officer Daniel Trujillo, also handles conflict-of-interest cases. In 2019 McKinsey agreed to pay $15 million to end a federal probe into whether it violated disclosure rules designed to prevent conflicts of interest in corporate bankruptcies. It is still facing a case against restructuring expert Jay Alix for allegedly concealing these conflicts.
The ethics specialist will collaborate with “investigators and subject matter experts,” according to the job description, and present information “for key audiences.” The ethics director, on the other hand, will oversee the internal investigation of “any alleged violation” of policies or regulations.
Many companies have ethics and compliance czars — McKinsey’s Trujillo previously served in the same role at Walmart Inc. Most of them joined the c-suite after the scandals during the 2000s at Enron, WorldCom and Tyco, or after the 2010 Dodd-Frank Act. Recently, they were tasked with evaluating the potential dangers of the boom in artificial intelligence.
Copyright 2023 Bloomberg.
The most important insurance news, in your inbox every business day.
Get the trusted insurance industry newsletter
