FT carries a detailed piece on the impact of the Rajat Gupta insider trading case on McKinsey, the firm that Gupta headed for three successive terms of three years each. The narrative is interesting but it does not enlighten us on what McKinsey might have done to prevent such a thing or whether there was anything at all in the way it functions that might give rise to such problems.
McKinsey executives ask,"Why didn't we pick up on it?" Well, is there any way you can? Is there any means of spotting potentially dangerous persons? Maybe one can keep an eye on traders in investment banks but very often these are the ones who actions get overlooked- they are stars, you see.
McKinsey has a rigorous process for screening people for higher levels of responsibility, it is not wanting in culture or training. Any firm is occasionally bound to have people who behave badly (and, most importantly, the allegations against Gupta relate to a period after he left McKinsey). The article suggests that values get compromised in times of runaway growth and it suggests that McKinsey would like to be careful in its pace of growth in the years to come. That would ensure that systems don't come under strain. But can firm policies really impact on the values and actions of individuals?