Not many people get to put senior roles at both Goldman Sachs (GS.N) and McKinsey on their resumes. The investment bank has snapped up Kevin Sneader just six months after he was ousted from the management consultancy’s top job. Installing the person who agreed a $573 million opioid settlement and grappled with a host of other controversies may look odd for a bank still smarting from the Malaysian 1MDB scandal. In fact, it suggests an openness to fresh ideas.
Sneader will become Goldman’s co-president of Asia-Pacific, excluding Japan, alongside current chief Todd Leland. It’s familiar territory for the Scot, whose four-year stint running McKinsey’s operations in the region helped propel him to its top job in 2018. Once there, however, he faced the fallout from scandals including irregularities in McKinsey’s work for government-linked groups in South Africa, as well as its advice to U.S. drug firms selling highly addictive opioids. His willingness to apologise for past transgressions and his efforts to make the consultancy more transparent earned him outside plaudits. But it also upset many of the firm’s partners, who denied him a second three-year term.
Goldman’s unusual decision to hire an outsider at such a senior level suggests it sees value in someone with a deep understanding of how the pursuit of lucrative business can backfire. The bank agreed a record $2.9 billion global settlement in 2019, including pleading guilty to a bribery charge over its work for 1MDB, the Malaysian sovereign wealth fund. Regulators said executives had overlooked several red flags.
The Wall Street firm is also not one to turn down the well-connected. It has been doing decently in the region, ranking in the top five in terms of investment banking fees for the last four-plus years, per Dealogic data, alongside Morgan Stanley (MS.N), JPMorgan (JPM.N), and a changing cast of Chinese banks.
Boss David Solomon has made unconventional hiring choices before. Last year, he created the post of chief marketing officer, something many Goldman bankers felt was beneath the institution. Sneader has form in being different too: not many McKinseyites begin key speeches with “sorry”, as he did in South Africa. If he can help Goldman grow in Asia while avoiding future apologies, he will be a smart hire indeed.
Sourced from Reuters - written by Jennifer Hughes