When the CEO Is the Problem

Although having leadership be vocal and visible in repairing a company’s reputation is a keystone in any crisis-control situation, sometimes leadership is the problem.

So how should companies involve their C-suite when their top players are the ones in the hot seat?

Common sense would say to replace them. Larry Griffin of executive search firm Bridge Partners points to the Los Angeles Clippers’ ownership situation in April after the team’s owner was recorded making racially offensive remarks as an example of how removing a toxic leader can turn a negative into a positive.

“You start to see all of these diverse individuals raising their hands and saying they want to be a buyer of the organization,” he said. “That is going to set them [the Clippers] up as an organization that focuses on diversity and equality.”

But removing a controversy-laden CEO or leader is sometimes easier said than done, said Fred Kiel, executive director of the KRW Research Institute, a leadership research firm.

In a large company, replacing bad leaders is a job for the board of directors, Kiel said, but sometimes they won’t act quickly enough. If shareholders and other outside influences don’t push them to make a change, the chief human resources officer has to step in and bring the problem to the board’s attention.

But a bad leader isn’t a death sentence. “If the company itself is something that stands for adding to the common good, then you’ve got something to build on,” Kiel said.

“The current leadership can be seen by prospective employees as something that will pass when new leadership comes in.”

— Kate Everson