When a scandal hits an organization or a company, should its leader stay or should he leave?
Often scandals lead to resignations. But sometimes a leader can take action to steer the organization through turmoil.
Consider two recent and highly publicized examples.
Bell Media announced late last month that its vice president of news, Michael Melling, would take a leave of absence following the controversy surrounding the firing of longtime CTV National News anchor Lisa LaFlamme, pending results. a workplace review.
Hockey Canada also made headlines. Following allegations of sexual assault against players, the chairman of Hockey Canada’s board of directors has resigned. But the leaders of the organization remained, despite calls from some for their resignation. This week, the interim president of Hockey Canada released a statement saying that its president and CEO, Scott Smith, and the management team have the support of the board of directors.
The two approaches are radically different. How companies react affects their image and ultimately their bottom line. Here’s how experts say organizations can weigh their options before rallying to their leaders or showing them the door.
The case of departure
One perspective is that an organization should almost never support a leader facing controversy, because it is important that leaders demonstrate accountability.
“As leaders, we have the responsibility for the strongest and most comprehensive way to bring a level of inclusivity and equality to our workplaces, and that people can feel safe and feel that ‘they are able to unleash their full creativity and potential,’ said Kenneth Evans, managing partner at APEX Public Relations.
In the case of allegations that have not been proven, Evans says executives should always step aside while an investigation is ongoing.
But another expert said the decision comes down to whether an organization has the trust of the public and its employees during the crisis, as well as the company’s intentions – whether it appears to serve stakeholders, customers, the public and employees, or his own. best interests.
Changing leaders is “one of the tools in (a company’s) toolbox” for rebuilding reputation, said Warren Weeks, director of Weeks Media, a communications and media relations firm.
For example, after two plane crashes killed nearly 350 people, Boeing fired CEO Dennis Muilenburg in December 2019.
“At the end of the day, is the business able to do its day-to-day operations, (or) is the brand tarnished to such a degree that it needs to make a change?” he said.
Weeks said Melling’s furlough would allow Bell Media to take some distance from the scandal.
“They call it throwing meat at dogs,” he said. “You’re just trying to save time, create space, create the perception that something is going on, and take some of the pressure off some of the other leaders and the company.”
From a communications perspective, the shorter the news cycle of a controversy, the better, Weeks added. Ideally, its trajectory resembles a triangle: the crisis arrives, it is managed and it goes away. The shorter the triangle, the better.
“Bell Media’s is like a roller coaster,” he said.
But allowing public relations considerations to dictate management decisions can also give the impression, internally, that an organization cares only about its image, another expert said.
Instead, to promote the good of a company, the interests of all stakeholders must be taken into account, said Yair Berson, professor of human resources and management at McMaster University. This includes a company’s board of directors and employees.
“What matters to leaders on a personal level translates into actions, policies and even performance,” said Berson, whose research has found it also affects a company’s bottom line.
“What is expected when they hire leaders is that they will be the type of people (who) promote the wealth of the organization,” he continued. “When that doesn’t happen, boards and sometimes even employees should revolt and leaders should leave.”
The case to stay
In contrast, says Stéphane Prud’homme, in the interests of stakeholders, an organization should avoid changing leaders in the midst of a scandal unless the leader is implicated.
“Executive turnover has a very negative impact on reliability, credibility and legitimacy,” said the president of Credibility Institute, a Montreal-based communications firm with a global clientele. “Organizations and their stakeholders, including staff and shareholders…need stability in the leadership team.”
Prud’homme and other experts cite Michael McCain in 2008, who was president of Maple Leaf Foods when more than 20 people died in a listeriosis outbreak linked to the company’s products. Maple Leaf Foods voluntarily recalled its products, and McCain attended press conferences and posted an apology on YouTube.
“It was avant-garde. No big budget company is making YouTube videos in the middle of a crisis,” Weeks said.
If leaders continue to be seen as credible by their stakeholders, Prud’homme says they shouldn’t be fired. “They should rather handle the situation with both hands on the wheel.”
At the same time, someone has to take responsibility.
He mentions Rogers Communications Inc., which replaced its chief technology officer after his nationwide outage in July. Prud’homme says that if a company determines that an individual is responsible for a problem and holds them accountable, leaders can stay put.
“If there was no one guilty, yes, the CEO should take responsibility,” he said.
The case of waiting
Changes of direction should be delayed immediately.
For example, Bell Media and Hockey Canada both conduct reviews. The results of those reviews should determine what happens next, commentators said.
“They’re following due process,” said Jeff Lake, managing partner at PUNCH Canada, a Toronto-based public relations firm. “You can’t arbitrarily kick everyone off the bus without any sort of review.”
Without the facts, it’s hard to know if a leader is directly to blame. “If the CEO is not personally or directly involved in the scandal or the crisis, that person shouldn’t leave right away,” Prud’homme said.
That said, after Prime Minister Justin Trudeau told reporters this week that the government and Canadians “have lost faith in the leadership of Hockey Canada,” that organization may not have much choice in rebuilding its image with the public. , government and stakeholders.
“In light of these comments, Hockey Canada’s senior management should do the right thing and step down to restore confidence in the organization,” Lake said. “It’s basically over when the prime minister takes a tough stance like this.”
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