Johannesburg - 25 June 2019 - Through the Nugent Commission of Inquiry last year it became evident that Bain & Company’s involvement with SARS beginning in 2015 was a failure, for SARS, South Africa, and Bain.
Following the firm’s own investigations as well as the release of the Commission’s report on SARS in December 2018, Bain recognised multiple points of failure on our part. Since then, the firm has taken several concrete actions and created a remedy plan under the guidance of Athol Williams, who has been working with Bain since September 2018, first to provide his own opinion on the independence and adequacy of the Baker McKenzie investigation into Bain, and then as an advisor on the development of our remedy plan.
The remedy plan focuses on three important objectives:
- To make amends for Bain’s role in the harm caused to the specific affected parties, including SARS and its employees, our clients, our employees, our alumni and South Africa
- To become a leader in corporate responsibility, reaffirming Bain’s commitment to ethical business and being a force for good in South Africa
- To ensure the mistakes we made are not repeated in the future.
The firm has already taken several actions including:
- Acknowledging that our SARS work did not meet our standards, which led to the decision to return all fees plus interest that we received for our engagement. The repayment was discussed with SARS during the course of October and effected in early November.
- Resetting the leadership of the South African business with the appointment of John Senior, a highly experienced Bain partner, as the head of Bain Africa.
- Establishing a global Public Sector Risk Function, independent of line leadership and accountable to our global Board with a chief risk officer reporting to Bain’s global managing partner
- Creating a Bain Africa Oversight Board to provide risk oversight of client and project selection. The Board will comprise seven directors: four independent directors, two local Bain partners and one global Bain partner, and will help ensure that Bain properly manages its relationship with a broad set of societal stakeholders.
Additionally, we are pleased to announce that, as part of the leadership and governance enhancements at Bain, Norman Mbazima, a highly regarded business leader, has agreed to chair the Bain Africa Oversight Board. Williams has also agreed to rejoin Bain & Company as a partner in the firm’s Johannesburg office, where he will lead the firm’s Corporate Responsibility practice locally and oversee the implementation of Bain’s remedy plan. He will also serve on the Bain Africa Oversight Board.
Mbazima said: “Bain has learnt the lessons from what happened with SARS and implemented significant remedial steps. I have great confidence in the quality of the firm and its people, and believe Bain can make a significant, positive contribution to the South African business community and society more generally. We will benefit from having a healthy Bain working in South Africa, and I look forward to working with the other members of the Board to help guide the firm’s future.”
Commenting on his appointment Williams said: “Leveraging the insights gained from my previous work as well as my expertise in corporate governance and corporate responsibility, over the past five months I have worked closely with the new leadership team to formulate a remedy plan that goes beyond the measures already announced by the firm.
“My decision to rejoin Bain was heavily influenced by my own belief that I can better effect these remedies from the inside and, over time, help Bain & Company regain trust as a one of the pre-eminent consulting firms in Africa, while continuing to contribute to promoting the positive role that business must play to advance social justice”
Managing Partner for Bain Africa, John Senior, said: “Bain & Company is committed to ensuring that we do what it takes to regain South Africa’s trust. We want to be regarded as responsible corporate citizens and understand that we need to make amends for our role at SARS and face the consequences of our errors. The appointments of Norman and Athol are an indication of our commitment to this.”
About Norman Mbazima
Norman Mbazima is the deputy chairman of Anglo American South Africa and a member of the Group Management Committee (GMC). He retires on 30 June 2019.
From 2012 to 2016 he served as CEO of Kumba Iron Ore. He joined Anglo American in 2001 at Konkola Copper Mines plc and was subsequently appointed global CFO of Coal. He became finance director of Anglo American Platinum in 2006 and later stepped in as joint acting CEO. Norman was CEO of Scaw Metals from 2008 and later CEO of Thermal Coal from 2009 to 2012.
Mbazima is a Fellow of the Association of Chartered Certified Accountants.
About Athol Williams
Athol Williams is an experienced senior executive and an expert in corporate responsibility and business strategy, and a regular public commentator on social justice and nation-building.
He previously worked in Bain’s Boston, London and Johannesburg offices for varying periods between 1996 and 2010, and more recently provided his own opinion on the independence and adequacy of the Bain investigation by Baker McKenzie.
A multi-award winning author of 11 books, youth literacy activist through Read to Rise, the NGO he founded in 2013, he holds Masters degrees from Harvard, MIT, Oxford, LSE and London Business School, as well as undergraduate degree from Wits.
Williams will split his time between Bain & Company and UCT, where he currently works as Senior Lecturer at the Allan Gray Centre for Values-Based Leadership in the Graduate School of Business. He is also a Research Fellow in the Centre for Applied Ethics, Stellenbosch University.
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About Bain & Company, Inc.
Bain & Company is the management consulting firm that the world's business leaders come to when they want results. Bain advises clients on private equity, mergers and acquisitions, operations excellence, consumer products and retail, marketing, digital transformation and strategy, technology, and advanced analytics, developing practical insights that clients act on and transferring skills that make change stick. The firm aligns its incentives with clients by linking its fees to their results. Bain clients have outperformed the stock market 4 to 1. Founded in 1973, Bain has 58 offices in 37 countries, and its deep expertise and client roster cross every industry and economic sector. For more information visit: www.bain.com. Follow us on Twitter @BainAlerts.