McKinsey leader Kevin Sneader ousted after crises | Corporate governance

Partners at the world’s largest consultancy firm, McKinsey, have reportedly ousted their leader, Kevin Sneader, over his handling of a string of controversies during his tenture.

The firm’s 650 senior partners voted Sneader out before the final round of a leadership election that was seen as a referendum on his three years in the role, according to the Financial Times.

The 54-year-old Scot would be one of the first McKinsey leaders in recent memory to serve only one term – all five of Sneader’s predecessors as global managing partner have served a two terms or more.

The influential firm is known for providing expensive advice to governments and multinational companies around the world. Known as the “CEO factory”, McKinsey’s network for former employees includes some of the biggest names in business and politics.

Notable alumni include Chelsea Clinton, Facebook’s former chief operating officer Sheryl Sandberg, and the ex-chief executive of Credit Suisse Tidjane Thiam. In Britain, those who worked or the firm including the politician William Hague, former HSBC chair Lord Green, former city regulator Lord Turner.

With 30,000 staff in 65 countries, McKinsey is a go-to consultant for the UK government, and has picked up lucrative contracts during the Covid crisis. Last year, McKinsey consultants were paid £563,000 for six weeks’ work – £14,000 a day – to create a permanent replacement for Public Health England, defining its “vision, purpose and narrative”.

But the firm, which has a fondness for mottos such as “Leadership through integrity”, has been stung by a string of crises during Sneader’s leadership.

Earlier this month, McKinsey agreed to pay nearly $600m (£426m) to settle a lawsuit brought by 49 US states over its role in helping drug makers sell more prescription painkillers – even as the country faced a nationwide opioid overdose epidemic.

The consultancy came under pressure after legal documents revealed that it advised the Oxycontin maker Purdue Pharma on how to “turbocharge” sales of the drug in 2013. The firm was found to have encouraged sales representatives to focus on doctors who already prescribed high volumes of OxyContin, and to try to move patients to more potent versions of the drug.

Sneader expressed regret after the settlement but stopped short of admitting guilt on McKinsey’s behalf. The company announced two years ago that it would not advise clients on opioid-related business.

The blue-chip consultancy has also faced criticism for working with authoritarian regimes. In 2018, the firm said it was “horrified” to learn that a document it produced may have been used to target government critics, while earlier this month it was one of a number of consultancies named as having received millions from a company embroiled in an Angolan corruption scandal. McKinsey says an internal investigation found no irregularities.

Business morning email sign-up

With Sneader out of the running, McKinsey is likely to be led by one of two senior partners, Bob Sternfels, , or Sven Smit, w. Both have reportedly made it to the final round of the election, which is held every three years.

A spokeswoman for McKinsey did not confirm Sneader’s ousting, but said: “The election, which is conducted by an independent third-party firm, is now underway and we will announce the result after the election concludes.”

Sneader’s downfall comes just weeks after the KPMG UK chairman Bill Michael resigned, after telling staff to “stop moaning” during a virtual meeting about the impact of the coronavirus pandemic.

The 52-year-old Australian, who had led the company since 2017, made the comments during a virtual town hall meeting this month that was attended by around a third of the financial services consulting team’s 1,500 staff.

Michael told staff to stop “playing the victim card” and described the concept of unconscious bias as being “complete and utter crap for years”.

Michael, who was paid £1.7m last year, stepped aside after the accounting company asked the law firm Linklaters to conduct an independent investigation. He later apologised and said the controversy had made his position at the accounting giant “untenable”.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *