McKinsey & Co.-Protecting its Reputation (A) - Case Solution

On Tuesday, March 15, 2011, all 1,200 global Partners of McKinsey & Co. gathered at the Gaylord National Hotel & Convention Center near Washington, DC, for their annual Partners’ Conference. The discussion centered on the Galleon Group insider-trading trial and the shocking allegations against the Firm’s former Managing Director, Rajat Gupta.

Earlier, Senior Partner Anil Kumar pleaded guilty to providing confidential information about McKinsey clients he served to Galleon Group founder Raj Rajaratnam.

The McKinsey Partners were shocked and dismayed by the actions of Kumar, as well as the recent allegations against Gupta, and were anxiously watching the situation and the course of action that their senior leadership would decide upon.

1. Is it a cause for concern for McKinsey & Co., following the disclosure that their former Managing Director Rajat Gupta had discussed privileged information from a closed-door meeting at Goldman Sachs, whose board he sat on?

This disclosure would have been like a sled hammer blow. McKinsey, right since its founding in 1933, had worked with and enunciated a set of values.

One of their core values was to always put the client’s interests before that of McKinsey’s. In some ways, this was apparently not done by Rajat Gupta, as seems to indicate from the wire-tapped phone conversation he had with Raj Rajaratnam. (https://commons.wikimedia.org/wiki/File:GalleonWiretap_RajatGupta-RajRajaratnam.ogg# )

Raj Rajaratnam is a Sri Lankan-American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm. On October 16, 2009, he was arrested by the Federal Bureau of Investigation for…