McKinsey Is ‘Horrified’ That Saudi Arabia Report May Have Been Misused
(Bloomberg) -- McKinsey & Co. said it’s “horrified” that a report it prepared to measure public perception of Saudi Arabia’s policies may have been used by the kingdom to silence dissidents.
The consulting firm responded on Twitter to a New York Times article that detailed a report in which it identified several people driving conversations on Twitter. Those people were later arrested or had their social-media accounts shut down.
In a nine-page report, the consulting firm said responses to the country’s economic policies received twice as much coverage on Twitter than in the country’s traditional news media, and that negative sentiment was more common than positive statements on social media. The document was a brief overview of social-media usage and meant for internal use, McKinsey said.
The New York-based firm said it wasn’t working in tandem with the Saudi government, and that when it does work with governments, the company “has not and never would engage in any work that seeks to target individuals based on their views,” according to a statement released on Saturday night.
“We are horrified by the possibility, however remote, that it could have been misused in any way,” the statement said. “At this point, we have seen no evidence to suggest that it was misused, but we are urgently investigating how and with whom the document was shared.”
McKinsey’s media relations office didn’t immediately respond to a message left on Sunday.
Saudi Arabia has faced intense international criticism since the disappearance earlier this month of Jamal Khashoggi, a critic of the Saudi government who was a contributing writer for the Washington Post.
The kingdom confirmed Saturday that he was killed inside the Saudi consulate in Istanbul, where he’d gone to obtain a document he needed to marry his Turkish fiancee. Saudi Crown Prince Mohammed bin Salman initially said that the journalist left unscathed. King Salman, the prince’s father, eventually ordered an internal investigation.
This isn’t the first time McKinsey has dealt with ethical fallout from government-related consulting work. In July, the consultancy apologized to South Africa over how business was handled with the state-owned power company Eskom Holdings SOC Ltd. The firm admitted to overcharging the utility and said it had been slow to admit wrongdoing.
McKinsey reached a settlement in July to repay almost 1 billion rand ($74 million) in fees to Eskom. It said it had failed to follow its own procedures when it worked alongside Trillian Capital Partners Pty Ltd., a business linked to the Gupta family, which had close ties to former President Jacob Zuma.
Notwithstanding its statement that the report on Saudi Arabia was meant for internal use only, McKinsey and other consultants must be aware of how their work may affect every stakeholder involved, said Susan Harmeling, associate professor of entrepreneurship at the USC Marshall School of Business and an expert in business ethics.
This is especially true with government work, where large consulting agencies are in position to influence key leaders, she said.
“Any action you take, any information you produce, anytime you put something in writing, you need to know this could get into a lot of different hands,” Harmeling said. “That’s then out there or potentially out there and you have to think about ‘Could this hurt somebody? Could this get to the wrong place?’"
While McKinsey still holds the reputation of being the “gold standard of management consulting companies,” it could face reputational damage, she said.
Some U.S. businesses have opted to back away from their connections with Saudi Arabia. Lobbying firms Glover Park Group and The Harbour Group ended their relationships with the kingdom as the fallout continued. The BGR Group and the law firm Gibson, Dunn & Crutcher LLP wrote in filings with the Justice Department that they would no longer represent the kingdom.
Business leaders including those at BlackRock Inc., Blackstone Group LP, JPMorgan Chase & Co. and Deutsche Bank have withdrawn from Saudi Arabia’s Future Investment Initiative conference, dubbed “Davos of the Desert,” which is scheduled to start Tuesday in Riyadh.
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