The data was compiled from the world’s top 2,500 corporations by PwC. PwC has performed the same study for 15 years and it is the first time ethical violations are the primary reason for high-profile CEO dismissals. In 2008, only 10% of CEOs departed for such reasons.
There are two trends driving this shift.
Increased social media visibility
Warren Buffet once said, “I want [CEOs] to judge every action by how it would appear on the front page of their local newspaper, written by a smart but semi-unfriendly reporter, who really understood it, to be read by their families, their neighbors, their friends.”
Buffet’s advice for CEOs–and everyone else for that matter– is more relevant than ever. Today anyone can put us on the front page. The new front pages are the social media newsfeeds that millions of Americans open every day, multiple times.
If a CEO does wrong, he or she can potentially be called out in front of everyone. The media may remain quiet in instances in which they have a vested interest in the information not to spread. But ordinary citizens will not hold back if they think a CEO has misbehaved. This is why companies are facing increased pressure to oversee and punish objectionable behavior.
Even minuscule indiscretions can draw complaints:
Social media users didn’t like that Bezos was sledding in Norway when Amazon was in the midst of accusations because of poor warehouse conditions and employee strikes over low wages.
The rise of activism
Activism is at an all-time high. More people are joining demonstrations than at any other time in American history. And social media is at the core of it. The Pew Research Center reported in 2018 that around half of Americans have engaged in some form of political or social-minded activity on social media in the past year. The survey also found that 69% of Americans feel social media is important to accomplish political goals.
Social media’s reach allows for quick organization and collective pursuit of a common goal. Social media campaigns can have a direct impact on the removal of a CEO, such as the #DeleteUber campaign that prompted 500,000 users to delete their Uber app and began Travis Kalanick’s downfall.
#MeToo is another example of a movement that acquired strength on social media. Hollywood producer Harvey Weinstein’s actions forced a thorough assessment of sexual misbehavior all over the world. A Pew analysis of public tweets found that the #MeToo hashtag has been used nearly 30 million times on Twitter – an average of 17,002 times per day, as of May 2018.
The movement led to multiple dismissals of men in positions of power. From corporate America to the highest echelons of entertainment, sexual misconduct was the culprit of the majority of the 2018 CEO dismissals.
#MeToo cemented the relevance of activism coupled with increased social media visibility.
How can CEOs gain more control over the conversation?
Follow Warren Buffet’s advice. There is nothing more reliable than committing to the highest standards of ethics. While you can’t always control what others say on social media, you are responsible for your own messaging. As in golf, you can’t control the wind, but you can control your swing.
For this reason, CEOs need to build an online audience. Owning your own audience gives you a channel for sharing your story. Your followers will help you to regain control of what is being said about you by dispelling false information and communicating the facts.
Transparency is important. A Sprout Social study indicates 85% of people are more likely to give a business a second chance after a bad experience – and stick by it during a crisis – if it has a history of being transparent. And 89% of people say a business can regain their trust if it admits to a mistake and is transparent about the steps it will take to resolve the issue. Hiding information is no longer a viable option since it will most likely spill anyway on social media.
Offer an authentic response in case of a crisis. Air Asia’s CEO Tony Fernandes sent out a dozen tweets in the first 12 hours after his airline’s flight lost contact with air traffic controllers. He addressed the families of the passengers, his staff, and the public. His response was praised.
However, you need to be careful when responding, especially the first response since it will be remembered the most. The CEO of United Airlines Oscar Muñoz received a backlash for his weak apology after a passenger was dragged out of a United flight. His response: “I apologize for having to re-accommodate these customers,” was seen as insensitive.
CEOs are under heavy scrutiny. Additionally, they need to build an online presence so they can strengthen their own story rather than being dragged down by what others are saying. The current environment not only forces CEOs to maintain the highest ethical standards, but to engage in advocacy themselves.
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