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Consultant International Forum

Consultant International Forum

Consultant International Forum is an independent membership group for management consultants who have a keen interest in the global profession and the maintenance of high professional and ethical standards in the practice of management consultancy.

Consultant International Bulletin is published exclusively for members of Consultant International Forum. The Forum's aim is to help the management consultancy profession fight back against complacency and unethical practices — and to do so by encouraging consultants and their professional bodies to rebuild and maintain the highest professional standards. We believe management consultancy plays an essential role in the modern economy and that the highest standards of ethical behaviour are essential for long-term success.

Membership deliverables include:

  • Consultant International Bulletin, a newsletter published 20 times a year
  • Podcasts of interviews and roundtables on leading-edge professional issues
  • Daily news alerts
  • The opportunity for members to communicate with each other via bulletin boards.

Join Consultant International Forum today.

Drivers behind the launch of Consultant International Forum

The consulting industry is booming and increasingly global in dimension. Yet like their colleagues in other professional services firms such as accountants and lawyers, senior consultants rarely know their partners, particularly those in other offices. Like other professional services firms they claim to have the same quality and ethical standards across the world, but this is increasingly questioned by clients and a sceptical business media. To many observers the evidence seems to point in the opposite direction.

Recent events at McKinsey and KPMG in South Africa and elsewhere suggest that national practices are more often than not left to their own devices — only hearing from head office in London or the US when something negative blows up.

CIF has been founded to help the consultancy profession fight back against complacency and unethical practices — and to do so by encouraging consultants and their professional bodies to rebuild and maintain professional standards. We believe the consulting profession plays an essential role in the modern economy and that the highest standards of ethical behaviour must be observed in all fields of management consultancy.

Cynical and negative media coverage of the consulting industry is particularly evident in the UK, where headlines like the following are all too common:

  • The curse of the consultants is spreading fast | Financial Times
  • Harvard students learn from McKinsey scandal in South Africa | Reuters
  • McKinsey: How does it always get away with it? | The Independent
  • The management consultancy scam | The Independent
  • Embattled KPMG executive caught up in sex scandal —



A pair of recent scandals in which the name of McKinsey and Co. has cropped up sends one back to consider the influence of ex-McKinsey people on banking: there have been a large number of them -- with several appointed only to be later sacked.

In Australia, as readers will recall, serial money laundering through Commonwealth Bank of Australia machines came to light over the summer, with chief executive Ian Narev (at McKinsey from 1998 to 2007) being rapidly wheeled towards the door as a result. The bank's comments as his departure was finalised were damning in their implications: Chairman Catherine Livingstone told the Sydney Morning Herald that, "in these roles, as you know, the right and wrong are clear but the judgment calls that have to be made along the way can be very challenging, and we need someone with a very strong sense of that moral compass".

From South Africa meanwhile, every week brings with it new revelations in a scandal known as 'Guptagate': this ongoing political storm arose when lucrative public contracts were awarded to figures close to President Zuma. Did McKinsey, which had a $78 million consultancy contract, turn a blind eye to wrongdoing? Opposition parties and anti-corruption groups argue that it did: Corruption Watch in Johannesburg, for example, confesses "profound suspicions about McKinsey", and investigations are indeed ongoing in the country with McKinsey South Africa director Vikas Sagar currently suspended regarding possible involvement. The firm has put aside its fee in a ring-fenced account pending a high court review for return to the state-owned power company if the court's decision goes against it. If it does, the questions raised will go all the way back to McKinsey headquarters in New York.

Apart from Ian Narev, the procession of McKinsey figures who spent some time in consultancy before moving into banking is long. As a brief sampling consider:

  • Peter Sands (Group CEO of Standard Chartered 2006-15)
  • Tidjane Thiam (CEO, Credit Suisse)
  • James Gorman (CEO, Morgan Stanley)
  • Martin Blessing (CEO of Commerzbank 2008-16)
  • Peter Devlies (CEO, AXA Bank Europe)
  • Onur Genç (CEO, BBVA Compass)
  • Rob Jesudason (CFO, Commonwealth Bank)
  • Ieko Sevinga (CIO and COO, Rabobank)
  • Charlotte Hogg (CEO Europe, Visa)
  • Antonio Simoes (CEO UK and Europe, HSBC)

Further down the food chain there are hundreds of alumni: recent appointments include David Chubak (now head of global retail banking and mortgage for Citigroup's Global Consumer Bank) and Tim Welsh (now vice chairman of Consumer Banking Sales and Support, U.S. Bank).

One eye-catching appointment six months ago was that of Marcus Schenck (at McKinsey from 1991 to 1997) as CFO of Deutsche Bank: according to one analyst quoted by Bloomberg, "It looks like they are warming up for Cryan's succession".

With so many former McKinseyites holding the levers of power, it really matters what culture these new captains of industry have been steeped in. Last year, the firm itself estimated that some 450 of its alumnae were running billion-dollar-plus organisations, including Jim McNerney at Boeing, Vittorio Colao at Vodafone and Oliver Bäte at Allianz. Less illustrious executives include Enron's former CEO, Jeff Skilling (21 years at McKinsey, now serving a 24-year sentence in prison) and Valeant's former CEO, Michael Pearson (23 years at McKinsey, currently the subject of a criminal investigation).

Note also that the former managing partner of McKinsey itself was jailed for insider dealing -- while Stephen Green (at McKinsey from 1977 to 1982 and subsequently chief executive of HSBC from 2003 to 2010) ran HSBC at a time when certain clients were engaged in monumental feats of money laundering.

McKinsey are commercial to the core: not a problem in itself, unless it turns into greed and a sense of being above petty considerations, such as sound ethics and moral practice. In Duff McDonald's book on the firm we learn that "smart clients say that the best way to use McKinsey is not to let them insinuate themselves -- to prohibit walking the halls of the client's offices looking for new business. Jamie Dimon of JPMorgan Chase, for example, will hire McKinsey, but for one-off projects in which the entire body of knowledge generated is transferred to JPMorgan Chase at the end of the project. The firm's operating committee has to approve any consulting engagement, and the JPMorgan Chase executives don't take just any consultants; they pick and choose the specific people they want on the project."

In recent times the alumni network has extended its influence into Silicon Valley: Sheryl Sandberg (Facebook's COO since 2008) and Patrick Pichette (Google's CFO for seven years to 2015) both came through McKinsey. Sundar Pichai, who worked at McKinsey's Silicon Valley office for over two years, was put in charge of Android by Google founder Larry Page and is now the CEO of Google itself.

This is not in any way to suggest that the majority of people who work at McKinsey past and present are in any way worthy of moral censure per se: letters that have emerged in South Africa in recent weeks reveal prominent executives expressing concerns to the state power company 18 months ago and raising serious questions about their local partner's ethics: "McKinsey is uncomfortable about project development partner Trillian's transparency on conflict issues....McKinsey has material concerns around reputational risk to the firm". However the fact remains that these were just words in the end: the firm's discomfort did not lead it to immediately pull out of the contract.

The difficulty is not so much about bad apples, such as can crop up in any firm: the difficulty is with a culture that comes with a conceited sense of being the best and the firm coming out on top at all costs. (McKinsey declined to comment on this article.)

One final note: McKinsey itself is not actually a member of the Institute of Management Consultants USA (the sole certifying body for management consultants; and ISO accredited to boot) and thus not actually a sworn upholder of the industry's code of professional conduct. Marvin Bower (1903-2003), the man who made the McKinsey firm what it is, believed that "formal definition through...a code of conduct was unnecessary because "values" were truly recognised and lived by all the employees".

But "the question is whether the money is the mortar that holds the culture together, or vice versa", an astute observer told Fortune magazine in a profile twenty-five years ago. With new questions swirling about the company, especially as the South Africa situation develops, that question is more relevant than ever.

About Lafferty Global

Under the direction of Michael Lafferty, a chartered accountant, a Fellow of the Institute of Chartered Accountants in England and Wales and former banking and accounting correspondent of the Financial Times of London, the broader Lafferty Group has played a leadership role in international business journalism and publishing for several decades.
Michael Lafferty founded the newsletters Management Consultant and International Accounting Bulletin as well as numerous banking and financial services titles.

In addition, Michael Lafferty has published several international studies of corporate reporting and accounting practices.

The decision to re-enter the field of professional publishing has been taken by Michael Lafferty because of a belief that the management consultancy profession "needs an independent global forum to monitor professional developments worldwide. This is particularly the case because of the proliferation of business scandals we are now experiencing".

Lafferty Global Ltd. Company Number: 11442620.


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