Statement on New York Times article on McKinsey work in Southeast Asia, China, Eastern Europe and the Middle East

December 16, 2018 – Yesterday’s New York Times article painted a misleading picture, one that selectively uses a handful of client engagements and one office retreat to fundamentally mischaracterize our firm’s presence in large parts of the world. In building their narrative, the reporters ignored or discounted facts that did not support their argument. They used innuendo and implied causality to build a deeply misleading account of how we operate.

We became concerned the Times was pursuing this story with an agenda when a client forwarded us an email they received from one of the authors of yesterday’s article seeking information about connections, “no matter how tenuous,” between our firm and “institutions that support anti-democratic activities” in a certain country. The reporter added that such tenuous connections would be “of great interest to our readers.”

We nevertheless engaged with the journalists during their reporting to explain our firm’s approach to client service and selection. We explained that as a global firm, we fundamentally disagreed with the assertion that our colleagues in Southeast Asia, China, Eastern Europe and the Middle East should not be serving clients where we have a demonstrated record of making a positive difference in the countries where they live, and on behalf of their fellow citizens. Together, these countries represent more than two billion people.

Indeed, the Times concedes that they are holding us to a different standard than other institutions. They write that many other businesses operate legally in these markets, but they conclude that it is somehow different when McKinsey does so because “[no other consulting firms] have the stature to confer credibility quite like McKinsey, a confidant for 92 years to many of the world’s most admired companies.”

Even measured against this higher bar, key elements of the Times’ story do not square with reality.

  • Broad swaths of the Times’ narrative are at fundamental odds with how our firm works, such as the article’s insinuation that we have somehow orchestrated our work across multiple clients to support China’s Belt-and-Road initiative. To portray us as working behind the scenes to advance any government’s agenda – across independent client teams and projects – is simply untrue. We also dispute the inference that our client service on individual projects related to China’s Belt-and-Road initiative is somehow inappropriate. Each engagement was conducted and evaluated on its merits and not in any way as part of a coordinated effort to advance the initiative.
  • We comply with the law in all markets where we operate. Despite the Times’ suggestive language about “clients under sanctions,” we fully comply with the requirements, and the intent, of all international sanctions – something theTimes itself acknowledges.
  • We hire exceptional people. We have a robust and standardized global recruiting process, which ensures that every individual we hire into a client service role goes through a rigorous, meritocratic assessment process. As we explained to the Times, both individuals referenced in the article were hired through this process. To imply that either was hired for reasons other than merit is false and misleading.
    • Liu Chunhang was hired after graduating from Harvard Business School, where he was a Baker Scholar. He did not work for any Chinese clients while at McKinsey. There is zero evidence his relationships were used by anyone to help develop clients or engagements.
    • Yulia Poroshenko (the daughter-in-law of Ukraine’s current president) was hired from the world-leading MBA program at INSEAD Business School, before she was married and two years before Mr. Poroshenko became President. She had no visible connection to Mr. Poroshenko at the time.
  • Like many other major corporations, including our competitors, we seek to navigate a changing geopolitical environment, but we do not support or engage in political activities. Take for example the context for two of the examples the Times cites – our work in Ukraine and in Malaysia:
    • In Ukraine, we chose to join widely-respected leaders and other international institutions to help reform an economy in desperate need of jobs and growth at a time when many saw real hope of both political and economic change. The Times’ suggestion that we undertook this work to polish the image of Mr. Yanukovych is deeply misleading. The local Partners who led this work were committed to the cause of reform; yet when it became clear that the country’s President would not follow through on his stated reform agenda, we made the tough decision to walk away and end our service. And let us be clear: the innuendo linking our work to Paul Manafort’s reported public affairs and lobbying activities is plain wrong.
    • In Malaysia, we evaluated the feasibility of the proposed East Coast Rail Link. Our role was limited to studying socio-economic impact and financial feasibility. We played no role in the Malaysian government’s selection of China Communications Construction Company. Most importantly, in this engagement we abided by one of our values: we told our client the truth. We advised that the project was not financially sustainable as scoped and recommended an alternative approach. This alternative approach was unfortunately not adopted by the government.

As a global firm, we are proud of the positive contributions we deliver in all the geographies in which we are present. We are disappointed that the Times’ article ignored the work we do that supports thousands of clients and helps improve the lives of millions of people.

We accept the scrutiny – including from the media – that comes with our work and leadership position in our profession. We also accept the commentary about the retreat in China, and we will be more thoughtful about such choices in the future. Yesterday’s article, however, crossed the line into criticism that is not justified by the facts of what we do and how we serve our clients.