It’s one of those firms that like to emphasize ‘stakeholder capitalism.’ But on protests in Moscow, it wants to stay neutral.
McKinsey & Company (“our commitment to making a difference in society is embedded in everything we do”) is one of those firms that like to emphasize how much they support “stakeholder capitalism”:
Business leaders should embrace the apparent contradiction—of low trust and high expectations—and make the choice to demonstrate that they see their mission as serving not only shareholders but also customers, suppliers, workers, and communities. The common term for this is “stakeholder capitalism” and we think its time has come.
Many CEOs say they agree—at least theoretically. There are certainly examples of businesses just talking the talk and not following through.
Well, since McKinsey mentions that topic, here’s The Moscow Times:
The Moscow office of leading U.S. consultancy McKinsey & Company banned its staff from attending an unauthorized protest in the capital in support of Kremlin critic Alexei Navalny on Saturday and warned them against voicing online support, according to an email sent to McKinsey personnel seen by The Moscow Times.
Russians nationwide took to the streets on Saturday in support of the opposition activist, who was jailed this week on his return from Germany to Russia.
The message, titled “Stay safe, stay neutral, enjoy weekend,” was sent to all employees in the office and shared with The Moscow Times by two McKinsey consultants on condition of anonymity.
On one side, Russia’s authoritarian leader, credibly associated with murder, helpful “terrorist” attacks, corruption and ballot-rigging.
And on the other, supporters of a jailed opposition leader who has recently survived an assassination attempt by members of the state security services.
McKinsey’s advice: “Stay neutral.”
Wait, there’s more:
“There is a call from some oppositionists for nationwide street demonstrations tomorrow that almost certainly will not be authorized. In line with policy, McKinsey employees must not support any political activity either publicly or privately. This ban does include posts in social media featuring your political views or your attitude to any action with a political flavour. This line of conduct is mandatory. Please make sure you stay away from public areas of gathering around 2pm tomorrow and please refrain entirely from making related posts in any media,” the message said.
The Moscow Times contacted McKinsey. From the same report:
When asked for comment on the message by The Moscow Times, McKinsey replied, “McKinsey supports its employees’ rights to participate legally and in a personal capacity in civic and political activities across the countries we operate. The recognition of these rights is unqualified.”
Saturday’s protest had not been approved by the Russian authorities.
“Legally” is doing a lot of work there.
The Moscow Times followed up on the story here:
The managing partner of U.S consultancy McKinsey & Company’s Moscow office has messaged his staff “clarifying” an earlier email banning them from attending an unsanctioned protest for jailed Kremlin critic Alexei Navalny.
“Some of you have raised concerns about my email to the office yesterday. I admit that the Firm’s policy was incorrectly reflected in that email,” Vitaly Klintsov wrote on Saturday.
He added a clarifying statement saying, “McKinsey supports its employees’ rights to participate legally and in a personal capacity in civic and political activities across the countries we operate. The recognition of these rights is unqualified.”
The earlier email sent on Friday and seen by The Moscow Times also said the ban included posts on social media “featuring your political views or your attitude to any action with a political flavor.”
Klintsov’s initial email was met with criticism by current and former staff of McKinsey, according to screenshots of conversations shared with the Moscow Times by employees at the firm. The company also received widespread criticism on Twitter from prominent human rights activists and journalists.
Tens of thousands of people took to the streets across Russia on Saturday in a wave of support for the opposition activist, who remains in jail.
The instructions to McKinsey’s Moscow employees caught the attention of U.S. Republican Senator for Florida Marco Rubio, who said in a statement on his website that the email “raises serious questions about McKinsey’s core values and corporate culture.”
“[I]t strains credulity to believe the managing partner of Russia and CIS incorrectly characterized how McKinsey policy sought to interact with the Putin regime in his original email.” Rubio wrote. “It is no secret that McKinsey maintains close business ties to Russian government agencies and Kremlin-linked companies.”
McKinsey has a long-standing relationship with Kremlin-linked companies, some of which are under Western government sanctions. In 2018, McKinsey was hired by VEB Bank, a bank that is fully owned by the Russian state and under U.S. sanctions. It has also consulted for Russian oil company Russneft.
The consultancy has previously been criticized by human rights activists for working for authoritarian states, including Saudi Arabia, Turkey and China.
In a curious way, history is repeating itself. Stakeholder capitalism is, in essence, an expression of corporatism.
As I noted here:
Corporatism takes many, many forms. It can range from the relatively (relatively) benign — it runs through European Christian Democracy, and it can be detected in early-20th-century American Progressivism — to the infinitely more heavy-handed. It has been an important element in the theory, if not the practice, of some variants of fascism, most notably in Mussolini’s Italy, but not only there.
Corporatism takes as its starting point the idea that society is best run through its leading interest groups, either alongside the ballot box, or, under fascism, in place of it. To fascist ideologues, it was a pathway to a harmonious national community, a “third way” that made redundant the class divisions that could tear a nation apart. Conveniently, this national community could be directed by a single party under, more conveniently still, a single leader.
A key part of the pathway to social harmony was, Mussolini claimed, “social justice” (a phrase, it seems, we are doomed to live with for eternity) and something to which the “selfish individual” will always be an obstacle. Mussolini’s claim is a reminder of the conflicting attitudes toward the individual percolating through corporatism.
Corporatism rests on the assumption that most individuals are unable to protect or assert themselves on their own and so need the support that only the group (and/or the state) can bring if they are to flourish. But (to the extent that it is needed), the proof, however camouflaged, that this is a fundamentally collectivist ideology can be seen in the treatment of the individual who does feel able to strike out on his own, yet finds himself criticized (“selfish”) — or worse — for his effrontery.
And so, stakeholder capitalism comes into view…
But the language of social justice that accompanied fascist corporatism was mostly camouflage designed to conceal the way that power and money were divided up between the state, parastatal, and private-sector entities, with no one else getting much of a look-in, let alone a say.
History doesn’t repeat itself, but it often rhymes (as Mark Twain may or may not have said). Stakeholder capitalism is neither a replay of the benign corporatism of, for example, post-war West Germany, and, nor, despite the way it is increasingly being used to bypass democracy, is it a rerun of corporatism’s fascist incarnation. Nevertheless, let’s just say that to compare McKinsey’s talk with its deeds, at least outside the West (and McKinsey is by no means alone in this) triggers some unsettling comparisons.
And those who think that such games will only ever be played outside the perimeter of our safe, Western democracies have not being paying attention.
Speaking of which, on Monday the World Economic Forum (“Davos”; you can find the, uh, McKinsey guide to what’s going on there here) played virtual host to China’s leader, Xi, who was apparently able to take a break from organizing the genocide of the Uyghurs to use the WEF’s platform to give a moral lecture to the rest of us. On Wednesday, incidentally, the WEF is set to be addressed by none other than Vladimir Putin.
Perhaps it’s unfair to mention that Klaus Schwab, WEF’s founder and executive chairman, has been beating the drum for stakeholder capitalism for decades.
Then again, perhaps it’s not.