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Charlie looks at how the behaviour of your senior management can have a major impact on your organisation.

This week I am going to discuss yet another risk for you to worry about! This potential risk involves the behaviour of your senior management, and whether it could have a major impact on your organisation. There have been numerous cases in the media recently, ranging from accusations of fraud and espionage to inappropriate behaviour and drug taking. All of these accusations can have an impact on the organisation involved in a number of ways.

Where you have serial behaviour, such as the accusations of sexual harassment and assault against Harvey Weinstein, questions are immediately asked, including how was this allowed to go on for so long, and if everybody knew, why did nobody do anything about it? The answer is often that people look the other way and ignore it. This then calls into question the culture of the organisation, and what else could be happening if they allowed this to occur. This impacts further on the organisation’s reputation.

With the #MeToo movement, more staff now feel empowered to speak out about their bosses, and despite having powerful senior managers, they feel they will be believed and supported, even if the events took place a long time ago. This will lead to more cases and accusations coming forward. In the current climate, even a single accusation can be enough to have a CEO suspended. Even if subsequently, after an investigation, they are found ‘not guilty’ or the case was not proved, their reputation will always be tarnished by the accusation. We can expect more cases of powerful, senior managers accused as part of #MeToo .

Perhaps events which in the past would have been hushed up or overlooked, are now being called out and CEO’s have had to resign. Cases such as the Co-op bank chairman Paul Flowers pleading guilty to possession of cocaine, crystal meth and ketamine, might have been brushed under the carpet in the past. The most high-profile case recently, is perhaps the accusation that Sir Martin Sorrell had bullied junior employees, and had used company money to pay for a sex worker. Once this reached the papers, he stepped down from WPP, the company he took over in 1985 and developed in to one of the ‘big four’ advertising agencies worldwide. There is also the case of former Nissan chairman Carlos Ghosn, who was arrested in Japan and accused of financial misconduct, which he denies. He claims that the charges were “plot and treason” by executives at Nissan who opposed the relationship with Renault and the future plan to integrate Nissan, Mitsubishi and Renault. All these events call into question the reputation of the organisations they are working for and can also, in some cases, bring paralysis to the organisation, caused by senior management’s time being spent dealing with the fallout, or by those looking to replace them jockeying for the position.

As well as misconduct, senior managers can also get caught up in politics and wider political battles between countries. The daughter of the founder of Chinese telecoms giant Huawei, Meng Wanzhou, has been arrested in Canada and faces extradition to the United States, over a possible violation of sanctions against Iran. Following the arrest of Meng, two Canadian citizens were reported to be detained in China and taken into custody on suspicion of “endangering national security.” The two cases may not be connected, but the media were quick to tie them together. If one of your senior managers are arrested in a seemingly political context, a lot of the organisation’s time will be spent trying to fight the charges and get them returned to their home country.

Even a poorly conducted interview of a potential new member of staff can have a major impact on an organisation’s reputation, if details of the interview go viral. This week on the news and across social media there was the case of Olivia Bland who rejected a job offer with a travelling software company, Web Applications UK, because of her “abusive” interview with CEO Craig Dean. Details of how she was treated in the interview, the inappropriate questions she was asked and how she left the interview in tears, were widely reported in the news. Although for the rest of us this story will very soon be forgotten, I suspect those who have dealings with the company will think differently about them for quite a long time.

We cannot be responsible for the actions of our senior managers, but I think we can keep an eye out for behaviours which could come back and haunt the organisation. I also think looking at how the organisation would deal with bad behaviour would be an interesting exercise scenario. As part of this scenario, the company could review its record keeping, policies and adherence to the policies, to check that the appropriate records can be found, and that people would adhere to these policies if an event occurred. Perhaps an exercise might be a little uncomfortable for some senior managers, but an audit or review might ensure that best practice is being followed. Unfortunately, professional misconduct of senior managers and the potential impact on your organisation is yet another risk you need to think about.

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