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Boards Rely on Intense Vetting for New Leaders After #MeToo

Jan. 11, 2019, 11:03 AM

Sexual harassment allegations have incinerated many enterprise companies since the #MeToo movement gained prominence in October 2017, and companies are learning that traditional succession plans need an update.

Corporations are taking what was already a somewhat proactive process into overdrive, by carefully crafting communications messages, conferring with legal teams, and intensely vetting candidates—basically amplifying the traditional steps to select a new face of the company in case of a crisis or just a run-of-the-mill personnel change, according to lawyers, communications experts, and other professionals involved in the process.

CBS Corp. announced Jan. 6 that Susan Zirinsky will take the helm of the news division in March, the first woman to occupy that role, replacing David Rhodes who has held the job for eight years, according to a CBS report. The network has seen its share of scandals in the past months, with corporation head Les Moonves stepping down in September 2018 after allegations of sexual harassment. CBS didn’t immediately respond to a request for a comment.

“In the wake of a crisis, an organization needs to rebuild broken trust, and understand the failures that led to the crisis and how to prevent it from recurring,” Pamela Coukos, CEO of Working IDEAL, told Bloomberg Law. The consultancy helps companies, universities, and other organizations achieve inclusive workplaces, diversity of talent, and fair pay practices, according to its website.

“Leadership transition can be a good way to support both those goals, but they don’t come automatically just by putting a new person into place,” she said in an email.

Thinking Ahead

Succession plans have always been a consideration for board members and top executives, but the urgency of the #MeToo movement has pushed the conversation to the forefront, Sard Verbinnen & Co. managing director Lisa Green told Bloomberg Law. Sard Verbinnen & Co. is a full-service communications firm, with international and domestic offices.

Companies are considering strong leaders in advance and also seeking someone “who could pinch hit in the short term if they need to make a quick decision,” she said. They’re also raising the bar for candidates who wish to take over a company in recovery.

“They’re being more rigorous about seeking a culture and value fit,” she said.

An engaged leadership style, matched with a healthy dose of employee respect, is important when thinking of who would take over control, Seyfarth Shaw partner Camille Olson told Bloomberg Law.

Zirinsky, or “Z” as she’s known at work, knows the company from the bottom up, having started as a production assistant in 1972, according to a CBS statement announcing her new role. “She gets us, she knows us,” the network’s Gayle King said of Zirinsky on a recent broadcast.

“No broadcast news producer is more highly respected and admired than Susan Zirinsky,” Joe Ianniello, president and acting CEO of CBS, said in the statement.

What stakeholders should ask when screening candidates about their commitment to a new culture, Olson said, is “How involved do they get? Do they stay involved?”

Who Runs the World?

Male leaders have been the primary offenders in terms of sexual harassment, but that doesn’t mean that a woman always has to be chosen to succeed a falling star. In fact, stipulating that a woman must take over after a disgraced man steps down would be “perfectly unlawful,” Olson said.

Picking someone based on gender alone would be addressing a complex issue too simply, she said. Having sensitivities to the issues doesn’t reside in solely one gender. That being said, having women in higher echelons of an organization empowers women at lower levels, she said.

Promoting diversity at higher levels, and making sure there’s a clear runway, could also be a helpful communications message for a recovering company, Green said.

Squeaky Clean

It’s nothing new to vet candidates for executive and board positions, but companies are increasingly seeking deep dives into a potential leader’s past with more harassment allegations coming to light, president and COO of Nardello & Co. Sabina Menschel told Bloomberg Law. Nardello & Co. is a global investigative firm. Gone are the days of a “check the box” background check, she said.

“Zero tolerance has to start with the hiring process,” she said. “Really that’s your biggest opportunity to create the culture.”

“Exhaustive open source investigation of the public record” is coupled with supplemental interviews from a candidate’s past, Menschel said. It also helps when women are already on the boards of companies looking for a new leader.

“A female board member’s network is likely very different from a male board member’s network,” she said. “You’re just going to have a wider variety of sources or networks to pull from.”

Seyfarth Shaw’s Olson said the increased scrutiny for potential successors is also permeating below the C-suite level.

“It’s happening not just at the CEO level, it’s also happening at any level where the person has broad responsibility for groups of employees,” she said.

More scrutiny, a new face, and effective communication are great, but they mean nothing without accountability moving forward, Coukos said.

“For example, you may need temporary external oversight through an outside task force or ombudsperson to provide feedback and accountability to new management, especially if the board or other members of management who remain were complicit in the prior misconduct,” she said.

Rebuilding a company’s reputation requires a combination of many practices, she said.

“So you need to pick the right person, and empower and support them as they put a new program into place, and have a good mechanism to hold them accountable,” Coukos said.

To contact the reporter on this story: Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editors responsible for this story: Cathleen O'Connor Schoultz at cschoultz@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com