“Our CEO may be an SOB”
Most nonprofit board leaders want their organizations to run as they were designed, operating smoothly, focused on their mission and free of any “extraneous” problems and distractions. Unfortunately, unexpected problems can come calling. Even then, many problems can be ignored, but doing so can lead to more serious problems surfacing in the future. One example of that type of problem could be realizing that you might have an abusive CEO.
First the Rumors
The organization performed very well during the four years he was the CEO – targets were met and budget projections were beaten. He was excellent at strategic planning and built a forward-looking organization using long-range plans, annual operating plans and detailed annual budgets. The CEO maintained a very positive working relationship with the board and went out of his way to ingratiate himself with the board leadership. He was also excellent at building close ties to the most powerful leaders of the community – corporate executives, politicians and powerful business owners.
But there were rumors that he had a problem with anger management and could be verbally abusive. He went through five secretaries in his first six months. At times, his interactions with his senior staff seemed a bit harsh, and then there was the matter of the frozen butter. During one board dinner, he slipped into the kitchen and could be heard loudly berating the chef for sending firm butter out into the dining room. “Every f-ing no-star chef knows you can’t spread frozen butter on an f-ing dinner roll,” he yelled and then calmly slipped back into the dining room.
But is being an SOB illegal?
A fair question, with a nuanced answer – your CEO can be an SOB as long as he is an equal-opportunity abuser and as long as he avoids any behavior or language of a sexual nature or language that targets a protected class or category. So calling the chef stupid is fine, calling him a stupid Frenchman is not. Also, even if the CEO does not use the word “Frenchman,” we are probably going to need to prove he does not have some grudge against Frenchmen whom he regularly abuses.
Here is an important warning: Juries tend not to like bad bosses, and a long history of “legal” abusiveness, while defensible, could still pose a high risk of a very bad verdict. Counsel may recommend that the matter be settled out of court with a tight non-disclosure agreement, at significant cost to the organization.
Do we REALLY need to worry about this?
Right, history is filled with great leaders who could be a little over the top at times, like Jack Welch, Miranda Priestly or Genghis Khan. Plus, lawsuits against abusive CEOs are not common – unless they involve sexual abuse. With a highly effective CEO, it is very tempting to let it slide. But there are several reasons to confront the problem before it gets worse:
1. Aren’t you hoping to be “One of the 100 Best Places to Work”? Don’t you aspire to be recognized as an “employer of choice,” an agency known to be a great workplace? That might be hard to achieve with employees who hate coming to work because of an abusive boss.
2. Bad bosses prompt staff turnover. Most people don’t enjoy being yelled at, especially for minor errors or failing to read the CEO’s mind. Faced with a hostile boss, good people leave and are often vocal about the reason why.
3. Bad behavior can be infectious. Junior leaders often mimic senior leaders’ behavior, and over time, abusive behavior can be found at all levels of the organization.
4. Bad behavior promotes a dysfunctional workplace. Abusive bosses stifle dissent and creativity. Organizations don’t get the best effort from their management team, and abusive CEOs tend to make decisions as a committee of one, then hand implementation over to their staff. The results are often less than optimum.
5. Addressing the problem will be good for the CEO. Anger and abusiveness have likely been part of his conduct since his first job, yet his skills and abilities have enabled him to advance his career. He carries with him anger, a character flaw or a behavioral abnormality that will ultimately short-circuit his career.
OK, we need to address this. Where do we start?
What not to do. Several years ago, I heard this story from a former healthcare CEO:
“I had been working successfully in my position for about five years when there was a turnover in the Board Chair. The new chair came in with a lot of energy and many questions. After several months, the tone of the questions changed and became more hostile, and it seemed he was not trusting my answers. One day in a private meeting, he told me that “to get a better idea about what was really going on”, he had been interviewing my direct reports, telling them that under penalty of losing their jobs, they were not to tell me about the conversation.”
This board chair was wrong on so many different levels.
Rule Number One – Repeat after me – The Board is NOT an investigatory body. You are dealing with a very sensitive matter – you have a highly effective CEO; no formal complaints or lawsuits have been filed and there are just whispers of an anger management problem. A good outcome might be as simple as some counseling. A board-conducted Star Chamber inquiry will forever destroy the Board-CEO working relationship and will result in a resignation, a move to another organization, or an expensive lawsuit.
Any activity must be conducted with the utmost confidentiality and by people experienced in such matters. The first person on this team needs to be an experienced labor and employment attorney; the second, perhaps, a behavioral psychologist or an executive coach. Together, these experts will work with your Executive Committee to develop a course of action that will likely include some intervention. That conversation will likely be extremely offensive to your CEO. The degree to which your process has remained confidential and limited in scope, there is a good chance that the CEO will accept that its motives were a genuine concern for his well-being.
Are there steps that could have been taken to get ahead of this problem?
Yes, there are defensive measures that can be implemented to catch these problems early or address the root cause before they affect an executive’s performance.
Employee Opinion Surveys. One effective way to gauge the pulse of your workforce is a detailed Employee Opinion Survey. Many organizations conduct these surveys every few years, using outside consultants to lead the process. In addition to probing employee attitudes about pay and benefits (“could be better”) and the work environment (“I like my coworkers and think we do a good job”), questions can also explore attitudes toward managers and senior staff (“Senior staff cares about my opinion (or not)”).
Do not think, however, that these surveys will give people the opportunity to “spill the beans” on the CEO. Employees, particularly the CEO’s direct reports, are smart enough to know that even though the survey is confidential, it may still be possible to identify the malcontent; thus, most surveys report that senior staff are the happiest people in the organization. The Board needs to take an active role in reviewing the results of any employee survey and see results compiled not only for the entire organization, but also for major divisions and departments.
360 Reviews. More targeted than employee opinion surveys, 360 (Degrees) reviews solicit feedback from an executive’s direct reports, peers and superiors about their perceptions of the executive’s leadership style and general behaviors. For the same reason that Employee Opinion Surveys may fail to identify an abusive boss, many employees will remain reluctant to raise an inflammatory issue, such as the boss’s bad behavior. Both the results of the Employee Opinion Survey and the 360 reviews need to be treated with a high level of confidentiality, and to the extent they focus on individual employees, they should only be shared among a small number of board leaders.
Senior Vice President of Human Resources Mandatory Reporting Obligation. There is a good chance that to many employees, the fact that the CEO is an SOB is hardly a secret. Likely, many have seen his abusive behavior, and some have been targets of it. Why then is the board the last to know? Because the risk of reporting outweighs the benefit. Employees suspect that any complaint will go nowhere and will likely get them into trouble. There needs to be a mechanism to make sure the board is not kept in the dark. An effective mechanism is a board-adopted policy that says that any complaint against the CEO must be reported to the Board Chair. The burden of reporting should be placed on a member of senior management, preferably the head of Human Resources (Personnel). The policy needs to be clear, simple and unequivocal, leaving the head of HR no discretion. All complaints are reported.
A gentle intervention – with a quiet listener. Being a CEO or a top executive can be a lonely and stressful position. Executives are expected to be on top of their game at all times, fearless, always right and free of any complicated personal problems, whether medical, family or marital. Unfortunately, all those things can contribute to a personal behavior that is problematic. Many healthcare organizations have a social work department or a chaplaincy program that is skilled at helping people deal with the stresses of real life. For many years, I have advocated for a chaplaincy program for senior executives. Executives would meet with the senior chaplain monthly and could speak about any topic they chose, anything from the weather to problems at home or challenges at work. As with any counseling, discussions would be confidential. The chaplain could also make suggestions and raise issues – “I brought a book I thought you’d like (The Soul of a Team by Tony Dungy),” “Have you considered taking a vacation? “I heard you were yelling at your secretary again.” This might be the softest and most effective method of rescuing an executive headed for a fall.
Here is the quick summary:
If you think you have a problem, confront it now before it gets worse. If you don’t think you have a problem, create controls that will catch a problem early or even avoid one.
Related Topics. Prior blogs have discussed the amorous CEO and the sexually abusive CEO (Sex and the CEO Part One and Part Two), and future blogs will address two other CEO problems – Illegal Activity and what to do when the board believes that poor performance requires the CEO to be terminated. Stay tuned.
