Fless

Resolving legacy opioid matters and setting an even higher standard

McKinsey Global Managing Partner Bob Sternfels shared the below note with Firm colleagues.

Today, we will announce that we have resolved the United States Department of Justice’s (DOJ) investigation of our Firm regarding our past work for Purdue Pharma. This resolution, in addition to the one I shared last week regarding misconduct in South Africa closes our outstanding legacy legal matters with the Department of Justice.

As we’ve said, we take full responsibility for our past client service to Purdue. This resolution calls for us to pay $650 million to the U.S. government and to build on our industry-leading compliance program to do even more to protect our Firm and our clients. The DOJ has agreed to not prosecute our Firm, provided we follow through with the obligations to which we have committed over the next five years.

The resolution primarily relates to our work on a sales and marketing effort for Purdue that took place over a decade ago. That project focused on increasing sales of the company’s abuse deterrent formulation of Oxycontin. We got it wrong. We failed to appreciate the scale of the opioid epidemic. We should have stopped working for this client and ended our work on this topic much sooner than we did.

The resolution also addresses the actions of two now-former Senior Partners who discussed deleting documents related to Purdue (and one of whom, it was later determined, deleted documents). Their actions were wrong and violated our professional standards, and they were rightfully fired.

Today, we are publicly taking responsibility for these actions and errors in judgment. This terrible public health crisis and our past client service to opioid manufacturers will always be a source of profound regret for our Firm. We remain deeply sorry.

Setting the Standard

For those of you who joined our Firm over the last few years, the past conduct described in these resolutions and the related press coverage we will receive will likely feel unrecognizable. There is a reason for that. We are a fundamentally different — and stronger — Firm today than when these actions occurred. So, we should not shy away from any difficult questions and inevitable conversations.

We should lean in and talk about our Firm’s evolution on risk, which started years ago. We owe a debt of gratitude to the leaders who recognized then that we needed to set a new standard for accountability and compliance for ourselves and our entire profession. Since then, we have done just that and have profoundly transformed how we operate, manage risk and deliver impact to clients.

We now follow the most rigorous client selection process in our industry. We created our CITIO framework [which assesses risk along five inter-related dimensions: Country, Institution, Topic, Individual, and Operational considerations], which we apply to every engagement; developed sector compacts for each industry we serve with additional rules and guardrails; and added rigor to processes like due diligence checks and document and data retention. We have also built risk considerations into our engagement procedures, instituted mandatory risk training and introduced a new Code of Conduct that leaves no room for doubt as to what is expected of every one of us. We have made the consequences of any infractions clear. In addition to that, we have invested approximately $1 billion since 2018 to upgrade our internal risk, legal and compliance capabilities — quintupling the size of these teams and adding full-time Senior Partner and Partner leaders and other experts with extensive external experience.

As much as we regret the actions that led to this painful moment, we have owned up to our past and learned from them. We have apologized, cooperated with authorities to make amends and completely rewired our Firm so that we will never be in this situation again.

We cannot and will not let up here.

www.group-telegram.com/ua/flesspro.com/929

3.7K viewsDec 13 at 19:55

Resolving legacy opioid matters and setting an even higher standard

McKinsey Global Managing Partner Bob Sternfels shared the below note with Firm colleagues.

Today, we will announce that we have resolved the United States Department of Justice’s (DOJ) investigation of our Firm regarding our past work for Purdue Pharma. This resolution, in addition to the one I shared last week regarding misconduct in South Africa closes our outstanding legacy legal matters with the Department of Justice.

As we’ve said, we take full responsibility for our past client service to Purdue. This resolution calls for us to pay $650 million to the U.S. government and to build on our industry-leading compliance program to do even more to protect our Firm and our clients. The DOJ has agreed to not prosecute our Firm, provided we follow through with the obligations to which we have committed over the next five years.

The resolution primarily relates to our work on a sales and marketing effort for Purdue that took place over a decade ago. That project focused on increasing sales of the company’s abuse deterrent formulation of Oxycontin. We got it wrong. We failed to appreciate the scale of the opioid epidemic. We should have stopped working for this client and ended our work on this topic much sooner than we did.

The resolution also addresses the actions of two now-former Senior Partners who discussed deleting documents related to Purdue (and one of whom, it was later determined, deleted documents). Their actions were wrong and violated our professional standards, and they were rightfully fired.

Today, we are publicly taking responsibility for these actions and errors in judgment. This terrible public health crisis and our past client service to opioid manufacturers will always be a source of profound regret for our Firm. We remain deeply sorry.

Setting the Standard

For those of you who joined our Firm over the last few years, the past conduct described in these resolutions and the related press coverage we will receive will likely feel unrecognizable. There is a reason for that. We are a fundamentally different — and stronger — Firm today than when these actions occurred. So, we should not shy away from any difficult questions and inevitable conversations.

We should lean in and talk about our Firm’s evolution on risk, which started years ago. We owe a debt of gratitude to the leaders who recognized then that we needed to set a new standard for accountability and compliance for ourselves and our entire profession. Since then, we have done just that and have profoundly transformed how we operate, manage risk and deliver impact to clients.

We now follow the most rigorous client selection process in our industry. We created our CITIO framework [which assesses risk along five inter-related dimensions: Country, Institution, Topic, Individual, and Operational considerations], which we apply to every engagement; developed sector compacts for each industry we serve with additional rules and guardrails; and added rigor to processes like due diligence checks and document and data retention. We have also built risk considerations into our engagement procedures, instituted mandatory risk training and introduced a new Code of Conduct that leaves no room for doubt as to what is expected of every one of us. We have made the consequences of any infractions clear. In addition to that, we have invested approximately $1 billion since 2018 to upgrade our internal risk, legal and compliance capabilities — quintupling the size of these teams and adding full-time Senior Partner and Partner leaders and other experts with extensive external experience.

As much as we regret the actions that led to this painful moment, we have owned up to our past and learned from them. We have apologized, cooperated with authorities to make amends and completely rewired our Firm so that we will never be in this situation again.

We cannot and will not let up here.

BY Fless