Year: 2025
Type: article
Abstract: ComplianCe in Question: the mCKinsey afriCa sCandalAnnerize ShAw (Kolbé) University of London O ne would think that compliance agencies are crafters of compliance and not silent ringleaders of ethical pitfalls.South Africa's compliance landscape is distinctive.It created a unique opportunity for South Africa to be a leader in addressing historical socio-economic disparities, yet it seems that a colonial mentality keeps seeping through.Lip service is prevalent across the board, disguised in company culture and often only exposed when the so-called corporate line has been crossed.The McKinsey Africa Scandal is a series of controversies involving the global consulting firm McKinsey & Company in its work with state-owned enterprises in South Africa (Eskom and Transnet) (US Department of Justice 2024).Between 2012 and 2016, McKinsey partnered with local companies, including the controversial Gupta-linked Trillian Capital, to secure lucrative contracts worth billions of rands.Allegations arose that McKinsey benefited from irregular procurement practices, failed to conduct adequate due diligence on its partners, and allowed itself to be implicated in state capture-a widespread corruption scheme that misappropriated public funds (Zondo Commission 2022).In response to public and regulatory pressure, McKinsey acknowledged lapses in governance.In 2018, the firm returned approximately ZAR1 billion to Eskom (the McKinsey-Eskom repayment).More recently, in December 2024, McKinsey agreed to pay over USD122 million to resolve a United States (US) investigation into a bribery scheme involving payments (bribes) to officials at Eskom and Transnet.The scandal highlighted critical compliance failures, such as inadequate risk assessments, insufficient oversight of local partnerships, and a lack of internal controls to prevent unethical practices, despite the partial existence of valid compliance programmes within these companies.
Source: Amicus Curiae
Author: Annerize Shaw (Kolbé)
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4411959479