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The new president of consulting firm Bain & Company said the firm will pull back from advising certain industries in China as rising tensions between Beijing and Washington lead to increased scrutiny of Western companies operating in the country.
Christophe de Vousser, who takes over as Bain’s global chief executive on July 1, said the US-based company would do “less” business in “sensitive industries” in China.
This follows Chinese police raiding Bain’s Shanghai offices last year, questioning staff and seizing computers and mobile phones as part of a wider series of measures by Beijing against Western companies.
“We will continue to operate within the regulatory and legal environment that is necessary to operate in China,” de Vusser told the Financial Times in an interview. “There are clearly sensitive industries that are at the center of discussion from a geopolitical perspective, so we will certainly operate less frequently in those industries.”
He did not specify which industries Bain would exit, but said all of the firm’s operations in China are first reviewed by a central risk committee.
While Bain is adjusting its business to comply with new Chinese regulations on data and cybersecurity, he added: “Is it clear how the regulatory environment will evolve? [in China]”I don’t think anyone really knows how it’s going to evolve specifically.”
Mr De Vousser, a Belgian who previously headed Bain’s European private equity advisory business, cited geopolitics as one of four dominant global trends during his time at the helm of the firm, which employs about 19,000 people.
His appointment comes after a tough period for the consulting industry, with most firms cutting salaries and bonuses and limiting hiring as trading slowed. Bain has avoided wholesale layoffs but earlier this year offered some of its London consultants the option of six months’ salary, partially paid furlough or relocation to its overseas offices.
“We went through two years of decline as an industry, but we’re now back to double-digit growth rates. [growth] “We’ve had a strong first half of the year,” de Vusser said, adding that recent growth has been driven by its technology and artificial intelligence advisory business. The firm has also benefited from a pick-up in M&A activity, given its traditional focus on working with private equity.
Bain also had to deal with the fallout from a corruption scandal in South Africa, where an investigation found the firm had helped undermine the country’s revenue collection services through its advisory work for former President Jacob Zuma’s inner circle. The firm was banned from working in South Africa’s public sector until 2032.
In 2022, the UK government banned Bain from bidding for UK government contracts for three years over the South Africa scandal, but reversed that decision less than a year later.
“We have made mistakes in the past in South Africa that we regret,” de Vusser said, “and the most important thing we have learned from those mistakes is that our behaviour in terms of risk has changed significantly. We now have a structural risk committee on the board.”
