False dawns for leadership in the c-suites of two organisations have grabbed the headlines in the past few days – with observers left to wonder how the appointments were made in the first place.
In one instance, aerospace company GKN’s incoming CEO Kevin Cummings was fired before he could even spend a moment in the job. Due to take the helm on 1 January via an internal promotion, Cummings was ousted from the firm in the wake of an audit which showed that its North American division – which he oversaw – was heading for a write-down somewhere between $80 million and $130m.
One analyst pronounced the circumstances around Cummings’ departure a “major knock to management credibility”, given that the executive had been awaiting the keys to the corner office while in charge of a failing department.
Meanwhile, the media world reeled in shock from news that Gay Times editor Josh Rivers had been sacked, despite only being in the role since October. His swift removal followed an internal investigation by the paper’s parent company into racist, misogynist and transphobic tweets he issued between 2010 and 2015.
In a tweeted statement, Rivers acknowledged the “abhorrent” nature of his archived comments, and said that they were the products of a “deep self-loathing” that he had worked hard to overcome. The furore has been particularly uncomfortable for the Gay Times: up to that point, Rivers had been the first-ever BAME editor of a journal aimed at gay people.
What kind of due diligence should organisations conduct to ensure that incoming leadership figures are not laden with financial liabilities, histories of poor social conduct or any other potentially risky issues?
The Institute of Leadership & Management's head of research, policy and standards Kate Cooper says: “I think there are some competing forces at work, here. If you operate from a position of very low trust, where you have to forensically examine someone’s past in order to assure yourself that there are no skeletons in their cupboard, that comes with certain costs.
“Firstly, there’s your HR department’s time. Secondly, there’s the risk that the person who is about to start the job in question will think, ‘Oh – they don’t believe me.’ And however well a professional may understand why a firm would want to probe around, those who have a clear conscience, and don’t feel that they have anything in their pasts to be ashamed of, may not view such scrutiny as an ideal starting point.”
In Cooper’s analysis, organisations must balance the tensions between trust and cost. “Conduct a reasonable investigation,” she says, “but if facts come to light later on that make the individual’s position untenable, then take immediate action. Ensure you already have a recovery plan in place as a contingency for such events. Very often, it’s the indecision that arises in such circumstances that causes as much – or perhaps even more – reputational damage than the emerging facts. On those terms, I think the Gay Times handled the Rivers situation remarkably well: ‘This is unacceptable – you will have to go.’”
She adds: “There will be time to have an investigation about how you missed those points further down the line. But it’s that decisive action at the point of emergency that can prevent your organisation from slipping into crisis. It tells the outside world that you have, indeed, been trusting. But it also says that if you find your trust has been misplaced, it is absolutely clear what you will do about it.”
For further thoughts on building trust, check out these learning resources from the Institute
Other resources of interest
- 15 December 2017