Whether the issue is a misuse of corporate power, the inability to keep one’s personal and corporate finances separate or a stunning lack of empathy with customers and the public at large, the position of chief executive officer is not currently revered the way it once was.
Take, for example, the results of a survey by Weber Shandwick and KRC Research, “The Company Behind the Brand: In Reputation We Trust – CEO Spotlight.” The firm surveyed 1,375 consumers and 575 senior executives in the U.S., the UK, China and Brazil. Among its findings:
- 49% of a company’s reputation can be attributed to its CEO’s reputation.
- 60% of a company’s market derives from its reputation.
- 50% of consumers have lost respect for CEOs and other corporate leaders in recent years.
CEO MISCONDUCT AND BAD JUDGMENT
As noted by Susanna Kim, ABC News Business Digital Reporter, CEO misconduct was the root cause for former Best Buy CEO Brian Dunn’s 2012 resignation, after an investigation determined he’d had an inappropriate relationship with a female employee. Things got worse; a subsequent investigation showed that founder Richard Schulze (Dunn’s successor) neglected to inform the Best Buy board of directors about Dunn’s alleged misconduct.
An even more spectacular example of CEO mismanagement was Lehman Brothers CEO Richard Fuld’s actions prior to the collapse of the U.S. economy in 2008. Because of a refusal to concede that Lehman was undercapitalized, Fuld put off raising desperately needed capital and clung to the mistaken belief that the U.S. government would eventually bail Lehman Brothers out of trouble. Instead, the venerable firm crashed and burned.