In a move that comes as exactly no surprise to anyone, Equifax chairman and CEO Rick Smith has announced his retirement in the wake of a data breach that compromised the private financial information of 143 million people, sent the company’s stock plummeting and sparked Congressional investigations.
“This is well past due,” Yale School of Management senior associate dean for leadership studies Jeffrey Sonnenfeld told Chief Executive. “In our recent CEO survey last week, 80 percent said Smith should be fired.”
The news comes after of the resignations of three Equifax executives who sold off company shares once the data breach was discovered—but before it was announced to the public. After the CEO’s apology to the public in the wake of the breach was widely derided, many expected this move to follow in short order.
“The buck stops in the corner suite.” Jeffrey Sonnenfeld, Yale School of Management senior associate dean for leadership studies
“The buck stops in the corner suite,” Sonnenfeld says. “This is a mid-sized company with devastatingly broad reach. The errors are not due to wild unknowns in emerging technologies. The errors are basic management missteps in intelligent data management and crisis response.”
An overwhelming number of questions that have arisen over Smith’s leadership, or lack thereof, in the wake of the Equifax data breach, including why security patches were not installed when the company first detected a breach in March, and why additional intrusions from hackers in May and June intrusions not detected and reported.
Sonnenfeld compared Smith’s poor response and lack of transparency in the wake of the data breach to GM’s response when ignition issues forced a worldwide recall of 2.6 million cars in 2014.
“Mary Barra of GM was far more transparent, put her A-team on the repairs and did not put the burden on the victims,” Sonnenfeld says.
Smith took over as Equifax CEO in 2005 after a 22-year career at GE and oversaw a $2.7 billion revenue growth for the company over his tenure. Paulino do Rego Barros, Jr., who most recently served as Equifax’s Asia Pacific president, has been appointed as interim CEO as the company searches for a permanent successor.