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Information Wall – A Growing Need

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On May 9, 2022, the website “Policy & Medicine” published an interesting article signed by Thomas Sullivan titled “McKinsey – Serving as a Double Agent?”. It describes that the Oversight and Reform Committee on the US House of Representatives issued a report concluding that 22 consultants from the renowned McKinsey consulting firm were assigned to work simultaneously with the US government and with opioid manufacturers.

The same report then noted that said consultants took advantage of their connections with the FDA (Food and Drug Administration) to secure further advisory work with drug manufacturers, spelling out the details of the blatant conflict of interest.

The case above brings to light a very common situation which every consulting company and service provider faces in their daily operations.

In an increasingly competitive market, the fact remains that consulting companies and service providers cannot afford to have a single, exclusive customer within a market segment. However, how do we deal with the potential conflicts when defending the interests of companies that are fierce competitors in the same segment? Especially when considering the fact that confidentiality agreements are signed in order to protect all available information.

The million-dollar answer is the Information Wall, or sometimes also called “Chinese Wall”, in allusion to the Great Wall of China. However, in practice, how does the Information Wall work?

It is relatively simple in operation, but precautions do need to be taken. When a service provider or consulting company provides services to two competitors in the same market segment, the way to avoid conflict of interest is to ensure that those working on one case do not have access to information or documents from the other case. As such, internal teams are segregated, so as to prevent confidential information from one party to unduly privilege a competing party.

The information wall is already well known and widespread in the financial sector, especially in financial consulting companies and banks. However, service providers and consulting companies that do not take it seriously run a significant risk of losing clientele by already serving potential competitors in that segment, without being able to offer guarantees that access to certain information will not leak or unduly contribute to the other customer's business.

For an information wall to function properly, it is recommended that the service and consulting company adopt the following precautions:

1. Including the concept of Information Wall in its code of ethics or code of conduct.

2. Elaborating an Information Wall policy, establishing the principles that will govern the segregation of services.

3. Employee training that highlights the importance of the Information Wall, as well as the financial and reputational consequences of violating the segregation of services, depending on potentially competing customers.

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