McKinsey Letter, Ginni Rometty, International Women’s Day: CEO Daily for March 8, 2019

Good morning.

McKinsey & Co. has long been considered the world’s most prestigious, pricey, and private consulting firm, fighting mightily to keep its name and those of its clients out of the news. But in the last year, that fight has failed, and the firm has found itself at the center of a number of controversies, in South Africa, Saudi Arabia, China and even here in the U.S. The New York Times, in particular, has latched onto McKinsey like a bulldog, apparently seeing a potential Pulitzer Prize in the making.

Yesterday, McKinsey’s top partner, Kevin Sneader, sent a letter to his colleagues acknowledging that “mistakes” were made—without being too specific—and promising to learn lessons from those mistakes. He also said the firm was reviewing its criteria for accepting clients, to better screen for the effects of its work on society.

The big change came in acknowledging that McKinsey can no longer avoid the spotlight, however. “We have a long-standing commitment to client confidentiality, shunning publicity and keeping a low public profile,” wrote Sneader. “The problem is that in a world of social media, distrust for business and heightened transparency, our historic approach looks evasive and secretive. That is why likely actions include stepped up efforts to share who we are and what we do.”

That’s a refrain I hear repeatedly these days from CEOs. The old approach—keeping your head down, and tending to your business—just doesn’t work anymore, for a bunch of reasons that I’ve written about previously. More than ever, business leaders need to step up and show their actions are benefitting society…and admit when they aren’t. Transparency isn’t just a good idea; it has become a business imperative.

Sneader talked with Fortune’s Adam Lashinsky, providing more insight into what went wrong, and expanding on what he is doing to make it right. You can read the full interview this morning here.

By the way, as Adam discloses, McKinsey is a Fortune partner, sponsoring a number of our events. More news below.

Top News

Ginni Steps Up

Speaking of business leaders who step up: IBM CEO Ginni Rometty, in her leadership role at the Business Roundtable, wrote a frank letter on Thursday demanding that Congress pass the Equality Act to protect LGBTQ individuals from a broad range of discrimination. "As employers, America's leading companies know that our economy works best when our employees can be who they are, without fear of bias, discrimination, or inequality—in the workplace or in their communities," wrote Rometty, who leads the Business Roundtable's education and workforce committee. Axios

Beijing Praises Huawei

Someone's happy with Huawei's lawsuit against the U.S.: China's government. Foreign Minister Wang Yi on Friday applauded the telecom giant for "refusing to be victimized like a silent lamb," as he tied the outcome of the dispute to China's national interests. Huawei on Wednesday sued the U.S. government, claiming that the ban on U.S. government agencies buying its equipment violated multiple constitutional principles because it singled out the company without evidence. Wall Street Journal

Chinese Stocks Sink

Meanwhile in China, stocks took their biggest hit in nearly five months after a leading brokerage issued a rare 'sell' rating on the People's Insurance Group of China, saying the shares were “significantly overvalued” and sending waves across the wider market. Adding to the woes: data that showed China's economy was weaker than expected last month. Oil prices also dropped 1.6% on Friday on a worsening global economic outlook. Bloomberg

Finnish Government Collapses

As we well know, health care is "complicated." Just ask Finland. Its centre-right government collapsed today after health and social care reforms failed. The changes had been in the works for more than a decade as the nation tries to cope with its rapidly-aging population. Prime Minister Juha Sipila says he will resign, tossing Finland into political turmoil a month before parliamentary elections. Financial Times

Around the Water Cooler

Labor Department Eyes Overtime

The U.S. Labor Department wants to broaden overtime eligibility to cover most salaried workers earning less than roughly $35,000 a year. The expansion is much higher than the current $23,700 threshold, but lower than the $47,500 cut-off proposed by the Obama administration, which a judge threw out last year. New York Times

Philly Outlaws 'Cashless' Outlets

Philadelphia is the first major U.S. city to outlaw 'cashless' stores and restaurants. A new law just signed by Mayor Jim Kenney requires city businesses to accept paper money by July 1 or face fines up to $2,000. The new legislation is part of a growing movement against the cashless trend that's based, in part, on the argument that cashless businesses discriminate against people—often vulnerable populations like the poor and elderly—who don’t have access to debit or credit cards. Fortune

Tim Cook Laughs Along

At a Wednesday White House event, President Donald Trump flubbed Tim Cook's name, thanking instead "Tim Apple" for boosting the American workforce. The moment wasn't lost on the media—or Cook himself, it seems. The Apple CEO embraced the amusing mistake on Thursday by changing his Twitter name to Tim with the Apple logo. And in what's being called "the most legendary ‘Tim Apple’ sub tweet of all time," Cook's inside joke was apparently only visible to users on Apple devices. Washington Post

Serena Celebrates IWD

Today is International Women's Day, which celebrates the achievements of women and calls for even more action on gender equality. To mark the occasion, tennis icon Serena Williams wrote an op-ed for Fortune in which she urges women to "band together and fight for what’s fair." Fortune

This edition of CEO Daily was edited by Claire Zillman. Find previous editions here, and sign up for other Fortune newsletters here.

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