Huh? After Paying a $15-Million Fine for Failure to Disclose Conflicts, McKinsey Is Rewriting the Conflicts Rules

One guesses that successful burglars could list all the weak point in home security systems and advise accordingly. However, there is also the possibility that they might withhold some or employe false premises to convince homeowners to take or not take steps that would leave them vulnerable. You might never know.

Be that as it may, the consulting firm, without admitting any wrongdoing, that was fined for violating federal bankruptcy conflicts disclosure standards, has been asked to develop new rules that could be adopted universally by the bankruptcy courts. The problem is that McKinsey, without any admission of failure to disclose or recognition of the perceptions of a conflict its standards caused, is now drafting a the new bankruptcy court rules. McKinsey sees conflicts differently from the rest of us; its approach will be sophisticated, tolerant, and detailed. However, one can be assured that some conflicts will be able to slip through the cracks.

The Barometer could write the rule. If you are working with the trustee in a bankruptcy case, you, as a consultant, must disclose all relationships (including those of your subsidiaries, pension plans, etc.) with the debtor, the creditor, the judge, the lawyers for all of these. Relationships include contracts, investments, consulting, board memberships, joint ventures, joint sponsorships, and let your imaginations run wild for more. When in doubt, disclose. In fact, that last part is a conflicts standard many companies, board members, and government officials follow, and has served them well.

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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