CEO not spared from layoffs
According to a PwC study on top 2,500 global public companies released on 15 May 2019, a record 18% of CEO were fired for ethical lapses. This is the first year out of the study’s 19-year history that CEOs are fired for ethical lapses from misappropriate behaviour, embezzlement to sexual harassment vs the usual reasons of poor performance or disagreements with their boards.
List of major casualties:
- Brian Krzanich, Intel 1982 – 21 June 2018
- Travis Kalanick, Uber 2009 – 2016
- Darren Huston, Priceline Group 2014 – 2016
- Jed Bernstein, Lincoln Center for Performing Arts 2014 – 2016
- Christopher Kubasik, Lockheed Martin 2010 – 2012
- Gary Friedman, Restoration Hardware June 2010 – 16 August 2012
- Harry Stonecipher, Boeing 2003 – 2005
- Mark Hurd, HP 2005 – 2010
- John Schnatter, Papa Johns 2010 – 2017
- Harvey Weinstein, The Weinstein Company
- Dov Charney, American Apparel
- Renaud Laplanche, Lending Club Corporation
- Roger Ailes, Fox News
- Lee Jae-yong, Samsung
- Justin Caldbeck, Binary Capital
- Tom Preston-Warner, GitHub
It is now even more important that an organisation refocuses on its corporate values and how its CEO can lives and breathes these values. A Harvard Business Review “The CEO Reputation Premium: Gaining Advantage in the Engagement Era” in 2015 highlighted that a CEO’s reputation is a key part of a company’s success. The research of > 1,750 executives in 19 markets worldwide revealed that the CEO reputation is responsible for nearly one half of a company’s corporate reputation (45%), 44% of a company’s market value and > 70% on new employee hiring and retention.
If you as a board member has been focusing on your CEO driving that company performance with rising share price as the sole KPI, it may be about time that you start to go back to the basics – on the corporate ethical values. Are these corporate values still relevant and driving the correct behaviours of your company ? Or you as a CEO would be wise to start looking at what values would be important to you and how should you drives these values through the company as a leader. As true as ever, the purest treasure mortal times can afford is a spotless reputation.