Will corporate boards crack down?

Executive Summary

It has been a season of upheaval at the highest levels of major U.S. corporations, from Barnes & Noble to Intel to CBS, as boards of directors have ousted CEOs over conduct that was once shrugged off. The #MeToo movement sparked last year by sexual assault allegations against Hollywood producer Harvey Weinstein is partially responsible for the new climate. But even before this, things were starting to change, as evidenced by the actions of several boards against top executives over a broad range of behavior earlier in this decade. Boards are moving to head off reputational damage in an environment dominated by social media-induced volatility and what one corporate governance advocate describes as a long overdue “zero-tolerance attitude.” In this new environment, experts say, companies must establish clear policies about what will not be tolerated and how it will be dealt with, and engage in careful succession planning to be prepared when the unexpected strikes.

Some key takeaways:

  • Company board members are becoming less patient with a wide variety of CEO failings, ranging from racially tinged remarks to corporate culture.

  • Most boards have not yet implemented a succession plan in the wake of the #MeToo movement, even though more are discussing the issues raised by the movement, according to a recent survey.

  • The ultimate fate of dismissed CEOs can vary greatly. Some have faded from the ranks of corporate leaders, while others have resurfaced relatively quickly.

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Resources for Further Study



George, Bill, and Peter Sims, “True North: Discover Your Authentic Leadership,” Jossey-Bass, 2007. The former Medtronic CEO (George) and a venture capitalist (Sims) examine executive leadership via interviews with 125 CEOs.

Seierstad, Cathrine, Patricia Gabaldon and Heike Mensi-Klarbach, “Gender Diversity in the Boardroom,” Palgrave Macmillan, 2017. A collection of academic essays examines and analyzes the lack of female representation on corporate boards.

Weinstein, Bruce, “The Good Ones: Ten Crucial Qualities of High-Character Employees,” New World Library, 2015. A consultant who bills himself as “The Ethics Guy” says employers must hire for character and lists 10 qualities of high-character employees.


“Time for Boards to Catch Up to VC’s When it Comes to Addressing Workplace Sexism and Sexual Harassment,” Medium, April 11, 2018, https://tinyurl.com/y8smsv2k. The blogpost discusses the results of a survey by theBoardlist, a group formed to promote women as board members and executives, on companies’ responses to workplace sexism and harassment.

Guth, Robert A., Ben Worthen and Justin Scheck, “Accuser Said Hurd Leaked an H-P Deal,” The Wall Street Journal, Nov. 6, 2010, https://tinyurl.com/y7q2n8oh. A behind-the-scenes look at deliberations among Hewlett-Packard directors shows how one board wrestled with the possibility that its CEO misled it about his personal relationships.

Hagey, Keach, and Joe Flint, “CBS’s Handling of Les Moonves Accusations Hampered by Battle for Control,” The Wall Street Journal, Sept. 10, 2018, https://tinyurl.com/yd8tpevj. The Journal reveals how problematic personal dynamics on the CBS board may have prevented the directors from dealing promptly with allegations of its CEO’s misbehavior.

Hymowitz, Carol, and Joann S. Lublin, “Many Companies Look the Other Way At Employee Affairs,” The Wall Street Journal, March 8, 2005, https://tinyurl.com/y8vtj4gw. An article detailing Boeing’s decision to ask CEO Harry Stonecipher to resign illustrates how different corporate culture was 13 years ago.

McGregor, Jena, “What do companies really have to reveal when a CEO is ousted?” The Washington Post, July 6, 2018, https://tinyurl.com/y7a7rlu5. A journalist shows that companies have wide discretion in not giving too many details about why a CEO is leaving the company.

Ovide, Shira, “Intel Is Corporate America’s Biggest #MeToo Moment,” Bloomberg, June 21, 2018, https://tinyurl.com/y7t3vwcp. In examining the departure of Intel’s CEO, a Bloomberg Opinion columnist says “the zero-tolerance era for workplace conduct has its biggest cautionary tale so far.”

Rampenthal, Chas, “Is Workplace Dating Really Off Limits?” Inc., Sept. 18, 2012, https://tinyurl.com/ybj2qxqn. As stories of companies dismissing their CEOs for workplace relationships became more commonplace, the general counsel of law-services company LegalZoom examined how companies should develop policies on office romance.

Saia, Chuck, “Reputation: How to Protect, Preserve and Enhance a Precious Asset,” The Wall Street Journal Risk & Compliance Journal, Sept. 7, 2016, https://tinyurl.com/yaq8e8pg. The chief officer for risk, reputation and regulatory affairs at the financial consulting firm Deloitte examines how to build a solid reputational risk framework.

Reports and Studies

“2020 Women On Boards Gender Diversity Index,” 2020 Women On Boards, accessed Sept. 21, 2018, https://tinyurl.com/ybnfq82m. A group founded in 2010 by two women concerned about the lack of women in corporate leadership roles tracks the progress of women corporate directors from 2011 to 2017.

“How the Reputation Risk of #MeToo is Forcing Businesses to Reevaluate Their Corporate Culture,” Temin and Company, 2018, https://tinyurl.com/yd4j6fjv. A crisis-management firm says #MeToo incidents in the workplace “happen within a culture that somehow sanctions them.”

Graf, Nikki, “Sexual Harassment at Work in the Era of #MeToo,” Pew Research Center, April 4, 2018, https://tinyurl.com/y99fqe9y. A survey of attitudes about workplace harassment by a Washington-based research group.

McLaughlin, Heather, Christopher Uggen and Amy Blackstone, “The Economic and Career Effects of Sexual Harassment on Working Women,” Gender & Society, May 10, 2017, http://tinyurl.com/y7a5q68d. Researchers found that sexual harassment “increases financial stress, largely by precipitating job change, and can significantly alter women’s career attainment.”

The Next Step


Hsu, Tiffany, and Alexandra Alter, “Barnes & Noble Says Former C.E.O. Demos Parneros Was Fired for Sexual Harassment,” The New York Times, Aug. 28, 2018, https://tinyurl.com/y9cq9b26. The recently dismissed CEO of Barnes & Noble filed a lawsuit against his former employer alleging defamation and breach of contract. The company responded by saying that he was fired over accusations of sexual harassment.

James, Meg, “CBS hit with shareholder lawsuit over CEO Leslie Moonves’ alleged sexual misconduct,” Los Angeles Times, Aug. 27, 2018, https://tinyurl.com/yabfll9k. CBS shareholders have filed a class-action suit against the media company for failing to disclose harassment claims against former CEO Leslie Moonves to the U.S. Securities and Exchange Commission.

Wise, Alana, and Liana B. Baker, “Papa John’s founder says successor not right fit for CEO,” Reuters, July 26, 2018, https://tinyurl.com/y89vf99q. The founder of the Papa John’s pizza chain, who was ousted after he allegedly made racially insensitive comments, is suing the company and criticizing its choice for his replacement.

Silicon Valley

Abadi, Mark, “Twitter’s former CEO called Mark Zuckerberg a ‘ruthless execution machine,’ but many Silicon Valley insiders don’t agree,” Business Insider, Sept. 13, 2018, https://tinyurl.com/ydzxvt2e. Silicon Valley executives have sharply divergent views about the Facebook CEO, ranging from “ruthless” to “highly capable.”

Browne, Ryan, “Elon Musk smokes weed, sips whiskey on Joe Rogan’s podcast,” CNBC, Sept. 7, 2018, https://tinyurl.com/yccelre7. The Tesla CEO’s recent podcast interview, during which he smoked marijuana, was the latest in a series of controversial actions.

Manjoo, Farhad, “The Metamorphosis of Silicon Valley C.E.O.s: From Big to Boring,” The New York Times, Sept. 12, 2018, https://tinyurl.com/y7s6jjk8. With the exception of Musk, the current generation of tech CEOs is made up of low-key executives, a contrast to their brash predecessors, says a New York Times columnist.


American College of Governance Counsel
c/o Frank M. Placenti, Squire Patton Boggs LLP, 1 E. Washington St., #2700, Phoenix, AZ 85004
Professional, educational and honorary association of lawyers recognized for their achievements in the field of corporate governance.

995 Market St., Suite 304, San Francisco, CA 94103
Group that works to promote women as corporate board members.

Council of Institutional Investors
1717 Pennsylvania Ave., N.W., Suite 350, Washington, DC 20006
Coalition of major investors, particularly public pension funds, that has advocated for corporate governance changes, such as greater board diversity, since 1985.

Equal Employment Opportunity Commission
131 M St., N.E., Washington, DC 20507
Agency responsible for enforcing federal anti-discrimination laws.

International Corporate Governance Network
Saffron House, 6-10 Kirby St., London, EC1N 8TS, UK
+44 (0) 207 612 7011
Global group of professionals and investors who advocate for good governance.

John L. Weinberg Center for Corporate Governance
103 Alfred Lerner Hall, 20 Orchard Road, University of Delaware, Newark, DE 19716
Established in 2000, one of the longest-standing corporate governance centers in academia and the only one in Delaware, the legal home for a majority of U.S. public corporations.

101 North Brand Blvd., 11th Floor, Glendale, CA 91203
For-profit company that provides internet-based legal services for entrepreneurs and small businesses.

ValueEdge Advisors
111 Commercial St., Suite 302, Portland, ME 04101
An advisory firm that includes corporate governance leaders Nell Minow, Robert A.G. Monks and Richard A. Bennett.

DOI: 10.1177/237455680429.n1