Top Reason For CEO Departures Among Largest Companies Is Now Misconduct, Study Finds
Marchers protest sexual harassment in January 2018 in Seattle.
Ted S. Warren/AP
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Ted S. Warren/AP
Heads are rolling in the corner office.
For decades, the main reason chief executives were ousted from their jobs was the firm’s financial performance. In 2018, that all changed. Misconduct and ethical lapses occurring in the #MeToo era are now the biggest driver behind a chief executive falling from the top.
That’s according to a new study from the consulting division of PwC, one the nation’s largest auditing firms.
It is the first time since the group began tracking executive turnover 19 years ago that scandals over bad behavior rather than poor financial performance was the leading cause of leadership dismissals among the world’s 2,500 largest public companies.
“A lot of bad actors are being cleared out of the reaches of corporate American,” John Paul Rollert, a professor at the University of Chicago who studies the ethics of leadership, told NPR.
Thirty-nine percent of the 89 CEOs who departed in 2018 left for reasons related to unethical behavior stemming from allegations of sexual misconduct or ethical lapses connected to things like fraud, bribery and insider trading, the study found.
Executives are still being pushed out because of poor financial performance, but only about 35% of the time.
And that shift, the researchers say, is meaningful.
Increasingly, according to the study, corporate boards are approaching allegations of executive misconduct with a “zero-tolerance stance,” fueled in part by societal pressures since the rise of the #MeToo movement.
“For companies, they are recognizing that if they don’t get aggressive with this type of behavior, they are going to face exceptional liabilities when it comes to court cases,” Rollert said. “And so better to address these concerns now than to deal with multi-million-dollar lawsuit and the bad PR that comes with that sometime down the road.”
Some former CEOs say the study is proof that more women are feeling emboldened to share stories of alleged abuse or misconduct, and it is reshaping corporate America.
“Employees are starting to say, ‘how can you enforce a policy on us without holding CEOs accountable?’ ” said Bill George, a senior fellow at Harvard Business School and former chief executive of Medtronic, who has served on the boards of Goldman Sachs and Exxon Mobil. “The CEO’s behavior has to be beyond reproach. Boards are aware of this and are really feeling pressure around that now.”
Corporate boards, George said, realize “there’s a greater reputational hit of not acting than acting” to remove the executive.
Communication companies were hardest hit, reporting executive turnover around 24 percent, followed by materials and energy business. Health care companies logged the lowest rate of CEO attrition at around 11 percent.
Scores of CEOs were knocked down after allegations of sexual misconduct or impropriety in 2018. In July, the chief executive of Barnes & Noble was forced out. Two months later, Les Moonves, CBS’s chairman and chief executive, resigned after facing accusations from a dozen women.
The year also saw the chiefs of apparel company Lululemon and Intel exit after an internal findings of a violation of the company’s ethical guidelines.
The purge from the upper echelons of white collar jobs, Rollert predicts, will start to hit company leaders who may not be as well known as media executives and the heads of brands that are household names. Soon, he said, the movement that is forcing out top bosses will make its way down to smaller firms, and he said could even reach into blue-collar workplaces.
“The first wave of #MeToo took out some of the most high-profile figures,” Rollert said. “What we’re beginning to see in this second and now third wave is corporate America taking responsibility for itself,” he said. “There are clearly a lot of bad actors who are still hiding in the shadows that need to be swept out.”
What Abortion Was Like In The U.S. Before Roe V. Wade
NPR’s Mary Louise Kelly talks with Karissa Haugeberg, assistant professor of history at Tulane University, about what it was like to get an abortion before Roe v. Wade.
MARY LOUISE KELLY, HOST:
Over the weekend, hundreds of people marched on Alabama’s state capitol in Montgomery, protesting what is now the nation’s most restrictive abortion law.
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UNIDENTIFIED PROTESTERS: Alabama women matter. Alabama women matter. Alabama women matter. Alabama women matter.
KELLY: Abortion rights groups are calling for a national day of action tomorrow in response to new abortion bans in several Southern and Midwestern states. Supporters of these bills welcome the challenge if it will take them all the way to the Supreme Court.
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TERRI COLLINS: My goal with this bill – and I think all of our goal – is to have Roe versus Wade turned over.
KELLY: That’s Alabama State Representative Terri Collins.
So if the ultimate goal of these abortion bans is to overturn Roe and go back to the way it was before that landmark decision, let’s paint a picture of what it meant to get an abortion back then. Karissa Haugeberg is here to help us do that. She teaches history at Tulane University, and she joins me now. Professor Haugeberg, welcome.
KARISSA HAUGEBERG: Delighted to be with you.
KELLY: Start with the numbers. Before the Roe versus Wade decision 1973, how many American women got abortions?
HAUGEBERG: Scholars will probably never be able to answer that question with precision precisely because the procedure was illegal. But scholars estimate that between 20% and 25% of all pregnancies ended in abortion before Roe v. Wade.
KELLY: Well, that prompts me to the next thing I want to ask you about, which is, how risky was it when a woman did decide that she wanted to get an abortion in those days pre-Roe versus Wade – because I think the picture a lot of people maybe have in their head is of back-alley abortions or of women using coat hangers or drinking rat poison to induce abortions.
HAUGEBERG: Immediately before Roe v. Wade, officially approximately 200 women died per year. Historically, the most commonplace method that women have used when they haven’t been able to obtain legal abortions is self-induction. Those are the horror stories that you hear of women trying to fall down stairs or ingesting poisons or using instruments to try to induce an abortion.
Another method that women commonly used was turning to the unregulated market. And some women were able to find providers who were willing to perform abortions safely but criminally at great risk to their professional careers and at risk of being imprisoned themselves.
KELLY: Stay with the question of providers for a moment. As you know, the new Alabama law would make performing abortions a felony. But you are describing that there were, pre-Roe versus Wade, competent doctors and midwives and others who were performing abortions. How did that work?
HAUGEBERG: So one thing that’s kind of interesting is that throughout the period when abortion was criminalized beginning in the mid-19th century – for the most part, physicians were the people who were providing it as well as midwives. And as long as a physician was offering the service, until about the 1930s, they were less vulnerable to being prosecuted or having a police raid their practice. And so there was a vibrant word-of-mouth network that enabled many women to find safe providers. But again, they were always operating in a gray area.
KELLY: So big picture, what aspects of history might repeat should today’s Supreme Court overturn Roe versus Wade?
HAUGEBERG: So when we look at the provision of abortion in the immediate pre-Roe period, I think it’s actually very instructive. We had a patchwork system where women in certain places, like New York, and in certain areas – for example, cities – had much better ability to be able to get to a licensed provider and to afford a provider than women who lived in rural areas. So even in 1971, a woman who lived in rural Louisiana had very little ability, often, to be able to afford to get to New York.
And I think that’s one thing that I see coming back – is that we’re returning to this period where geography matters tremendously, that women in certain states will have the ability to exercise the right to abortion while it’s quickly disappearing and diminishing for women in rural states and in states that have a higher proportion of African-Americans.
KELLY: Let me flip the question around and ask what might look quite different in 2019 from the way things looked in 1971, 1972?
HAUGEBERG: Well, among the differences are some of the technologies. And there are concerted efforts to try to get abortion pills into states that are passing these criminal prohibitions on abortion.
KELLY: So options to terminate a pregnancy chemically, which may not have been available and certainly weren’t widely available in the early ’70s.
HAUGEBERG: Precisely. But if the recent history on contraception and these states’ reluctance to cover contraception is any guide, it wouldn’t be surprising if next there will be a crackdown even on these other chemical options.
KELLY: Karissa Haugeberg – she is an assistant professor of history at Tulane University. Professor Haugeberg, thanks very much.
HAUGEBERG: Thank you.
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GoldLink Turns Up As A Hologram For ‘Zulu Screams’ Video
YouTube
GoldLink is riding a well-deserved tide of goodwill ever since his 2017 studio debut At What Cost, a record that birthed “Crew” and resulted in his first Grammy nomination.
“Zulu Screams” is the latest glimpse of new material from the rapper since January’s “Got Muscle.” It’s a low-key, welcome return for the rapper’s nimble flow, setting his sights outside of his hometown’s go-go music. His voice snakes around P2J’s delightful production infused with sped-up highlife guitar, assisted by the similarly agile DMV singer-songwriter Bibi Bourelly and Brit-Nigerian singer Maleek Berry.
Directed by Meji Alabi, the visual for “Zulu Screams” finds GoldLink as a maestro of a particularly rowdy warehouse function — neon strobelights, a game of craps, and a lot of athletic dance moves on display. The only catch? GoldLink, in these modern times, is a hologram.
