By Jason Richmond, CEO and Chief Culture Officer at Ideal Outcomes, Inc.
The forced departure of McDonald’s CEO Stephen Easterbrook because of a romantic relationship with a subordinate grabbed the headlines recently. Hot on its heels came reports of an investigation into sexual misconduct by Google executives including parent company Alphabet’s Chief Legal Officer David Drummond.
What is going on? In this day and age, after the rise of the #MeToo movement and all the talk about ethical behavior in the workplace why are such high-profile cases happening? At a time when employees are seeking to work for companies with the right kind of culture why is this conduct seemingly on the rise? More importantly, what can be done about it?
It used to be the case that CEOs were fired because their failure was financial, not moral. But that’s all changed. The number one reason for executive dismissals is bad behavior rather than inferior financial performance, according to a 2018 study of the world’s 2,500 largest public companies conducted by PwC.
It was the first time since PwC, one of the country’s largest auditing firms, began tracking executive turnover nineteen years ago in its “CEO Success” study. In fact, 39 percent of the eight-nine CEOs were let go because of sexual misconduct allegations or other ethical lapses such as fraud, bribery, and insider trading.
Why the rise in these kinds of dismissals? The PwC report suggests three key reasons:
What is going on? In this day and age, after the rise of the #MeToo movement and all the talk about ethical behavior in the workplace why are such high-profile cases happening? At a time when employees are seeking to work for companies with the right kind of culture why is this conduct seemingly on the rise? More importantly, what can be done about it?
It used to be the case that CEOs were fired because their failure was financial, not moral. But that’s all changed. The number one reason for executive dismissals is bad behavior rather than inferior financial performance, according to a 2018 study of the world’s 2,500 largest public companies conducted by PwC.
It was the first time since PwC, one of the country’s largest auditing firms, began tracking executive turnover nineteen years ago in its “CEO Success” study. In fact, 39 percent of the eight-nine CEOs were let go because of sexual misconduct allegations or other ethical lapses such as fraud, bribery, and insider trading.
Why the rise in these kinds of dismissals? The PwC report suggests three key reasons:
- More aggressive intervention by regulatory and law enforcement authorities,
- new pressures for accountability about sexual harassment and sexual assault thanks to #MeToo, and
- the increasing zero tolerance stance adopted by boards of directors.