Honesty about why executives leave has a powerful effect on those who stay
How does a company choose its words when it publicly bids farewell to a leader who failed to live up to the organization’s values? It’s a question more companies are having to grapple with. Spencer Stuart, an executive search firm, found in its latest CEO Transitions report that CEO turnover at Fortune 500 companies was the highest it had been in the past decade. And a growing number of recent C-suite departures have been linked to workplace misconduct.
Historically, companies favored statements full of innocuous words but devoid of explanation. We’re accustomed to seeing executives suddenly depart “to pursue other opportunities,” or “for personal reasons,” or arguably the softest landing of all, “to spend more time with their family.” Stakeholders might have asked a few questions when they read about the departure, but ultimately they accepted – or at least weren’t outraged by – those euphemisms.
To put it mildly, times have changed. Trust in businesses has eroded. Organizations are operating in the post #MeToo era. Social media provides mistreated employees with a global audience, and reporters with a powerful way to dig out the “real story” inside a company. Workplace misconduct is being talked about and taken seriously in ways we’ve never seen before.
When a senior executive departs suddenly, organizations must now assume the question is not if the “real story” will emerge, but rather when it will, and how the underlying facts will leak. And even if there is no “story” there, companies should appreciate the context and recognize that stakeholders will be looking for one.
So how can you say enough without saying too much? How will your words be received by the people affected by the misconduct? Will stakeholders believe what you say – and if they do, will they be satisfied? What about a CEO with a strong following, or a CFO who’s had an outsized impact on the growth of the business, or a COO who’s spent decades rising through the ranks? Add in confidentiality and legal considerations, including the risk of defamation or wrongful termination litigation, and companies can understandably want to retreat to the well-worn territory of statements talking about “personal reasons” and “time with family” – or say nothing at all.
But holding back or choosing to be vague risks being labeled as dishonest, and can tinge the departure with the scent of scandal – a corporate “cover-up,” or perhaps even worse, cowardice. People care about these issues more than ever, and they expect companies to as well.
So how can businesses be on the front foot? If the misconduct hasn’t been reported in the press, the company can – and should – be the first mover. This offers the company far more than just control of the story: Candor sends a clear message that an organization will not tolerate the bad behavior, regardless of title or tenure. Sharing the “why” in a sensitive and considered manner can also help stop the culturally corrosive practices that others in the company may be modeling. Good luck getting employees to buy into your values if you don’t embody them during turbulent times.
As for the words themselves, there’s no one-size-fits-all approach. Context matters immensely. Each departure will have its own complexities and considerations. But if the details will vary in each case, the power of transparency won’t. Honesty about why executives leave has a powerful effect on those who stay.