retail news in context, analysis with attitude

by Kevin Coupe

The Washington Post this morning reports that a new study from study by Strategy&, the strategy consulting arm of PwC, reveals that last year, for the first time, “as boards clamped down on misconduct in the #MeToo era and placed greater scrutiny on executive behavior, more CEOs were pushed out for ethical lapses than for poor financial performance or struggles with their board.”

The Post writes:

“Thirty-nine percent of the 89 forced CEO departures in 2018 were due to ethical misconduct, which the study defines as the removal of a CEO following a scandal or improper conduct; examples include fraud, bribery, insider trading, environmental disasters, inflated résumés or sexual indiscretions. Meanwhile, 35 percent of ousters in 2018 were a result of poor financial performance and just 13 percent were because of conflicts at the board level or with activist investors that weren’t about financial performance but led to the CEO’s ouster.

“Compare that to a decade earlier, during the financial crisis in 2008, when 52 percent of forced exits were tied to financial performance, 35 percent to board conflicts and just 10 percent to misconduct.”

The Post goes on:

“The rise in ousters for ethical misconduct comes in a year when a strong economy meant strong numbers for many CEOs, and it may seem logical that the proportion of terminations from financial figures was slightly lower. But 2018′s results also follow a 12-year trend of more CEOs getting the ax for their misconduct as boards have been expected to play a greater oversight role.”

An Eye-Opener indeed, and on many levels. I’m glad that boards are opening their eyes to this nonsense, though of course they’ve been forced to by the fact that women no longer are standing for it, are finding their voices and courage in numbers, and are becoming a far more visible economic, political and cultural force than ever.

All of which is good.
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