The Weinstein Co.’s Board Not Off the Hook After Firing Namesake CEO

Allegations surrounding his sexual misconduct forced The Weinstein Co.’s board to fire co-founder and CEO Harvey Weinstein earlier this week, but publicly stepping away from the disgraced Hollywood mogul won’t stop the questions—or the lawsuits—from coming.

The big questions surrounding the Weinstein mess is how could his company’s board not have known about this behavior if it was so widespread, and why didn’t someone come forward sooner?

“Boards are often not privy to the personal and intimate dealings of a CEO. But the scale of his misbehavior and the tendency for Hollywood and the press to gossip make the board’s being blindsided not credible,” Jeffrey Cunningham, professor of global leadership at Arizona State University’s Thunderbird School of Global Management told Chief Executive.

“Typically, a leave of absence runs its course first, but in Weinstein’s case, they wanted to avoid a social media swarm.” – Jeffrey Cunningham

“When the CEO is a founder and an icon like Weinstein, it’s called the ‘that’s just Harvey being Harvey’ syndrome. Add to this the fact the company was so politically connected, it meant anything was treated as a rumor and those who wanted to call it out risked their careers.”

Given the gossip-driven nature of the entertainment industry, Cunningham believes it is likely that Weinstein was warned by the board about his alleged behavior informally, and told that if it blew up in the media further action would be taken.

“Typically, a leave of absence runs its course first, but in Weinstein’s case, they wanted to avoid a social media swarm,” Cunningham says. “It happened anyway, but not against the company, which was their intention. Because of the progressive/liberal leanings of this company, it was a death knell for their credibility. Female actors, even those who did not come out and criticize, would have boycotted Weinstein, and that drove this action [by the board].”

Removing Weinstein may not provide enough cover for the board, and the company could face additional legal action if it’s found that the board knew of his behavior previously and failed to take action.

“Given the severity of the charges, the board would be likely a generous ‘settler,’” Cunningham says. “So expect more publicity, despite the board’s belief that they put this behind them.”

And while Weinstein’s alleged actions have resulted in major public backlash and horrific PR optics, it may not mean the end of his career in showbiz.

“I doubt he is gone for long. He has friends, even among the female acting community, who love to work with him because his Midas touch,” Cunningham says. “When someone can enrich the community, their indiscretions are forgiven. Two months at a plush rehab facility and he’ll be on the next Oscar checklist.”

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Patrick Gorman
Patrick Gorman is managing editor at Chief Executive magazine, based in Stamford, CT. His business journalism background includes 12 years covering the C-level marketing and technology spaces.

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