HOW #METOO IS DRIVING GOVERNANCE CHANGES IN THE BOARDROOM
The #MeToo movement is propelling a long overdue examination by boards of directors of corporate governance that addresses culture and conduct. Since October 2017, when sexual misconduct allegations against film producer Harvey Weinstein surfaced, literally hundreds of executives have faced similar accusations as the influence of the #MeToo movement has spread far beyond Hollywood.
Indeed, more chief executives were dismissed in 2018 for ethical lapses reflecting scandal or improper conduct than for financial performance or board struggles, according to a PwC study of CEO turnover. As such, many companies now realise it is not a matter of ‘if’ they will face similar scandals, but ‘when’.
A number of major publications in the US – The New York Times, The New Yorker, The Washington Post and The Wall Street Journal – have uncovered decades of misconduct, as well as secret settlements for millions of dollars and potentially criminal activities. Long ignored by corporate human relations (HR) departments under the thumb of offending CEOs, women are often now going to the media even before contacting attorneys. The threat of involving the media hangs heavy even when internal demand letters or attempts to settle allegations internally occur.
Consequently, the court of public opinion has been brutal against alleged CEO offenders, with stock prices falling significantly upon news of allegations against corporate chieftains such as CBS’s Les Moonves, Wynn Resorts’ Steve Wynn and Barnes and Noble’s Demos Parneros. New York-based celebrity chef Mario Batali sold stakes in all his restaurants and moved to Michigan following a criminal investigation for sexual assault and sexual harassment claims that went back decades.
Jul-Sep 2019 Issue