#370 Dealing with Misconduct by Managers and Executives

Dealing with misconduct by managers

Recommendations for action, possibilities and limits

Managerial misconduct is occurring more and more frequently.

Often accompanied by media coverage, organisations seem increasingly unable to recognise misconduct, initiate adequate countermeasures, and draw the necessary consequences. The result is a poor image as an employer and significantly higher expenditures on employer branding and recruiting. This does not include the costs of sickness, other absences, and staff turnover. It is worthwhile and imperative to prevent management misconduct or, if it happens, to punish it.

How can you set up your organisation in the best possible way?

Business Cases

The CEO of UBER, Travis Kalanick, was accused of being responsible for a toxic work culture. The investigation by US Attorney General Eric Holder led to 47 cases of necessary improvement and Kalanick's resignation. Leslie Moonves of CBS was fired, and his misconduct cost the organisation a further 120 million dollars in compensation to victims. However, it is not always about behaviour without the other side's consent. Steve Easterbrook, then CEO of McDonald's, did not disclose relationships with staff and lost his position.

However, there are also unfounded accusations. Herbert Diess, then Volkswagen's manager, was acquitted in court on all counts.

Proceedings are currently underway against Daniel Lieberberg, head of Sony Europe. Regardless of the outcome, he is no longer employed by Sony.

This situation shows a comprehensive need for organisations to take action to prevent escalations.

Handling issues

One aspect must be emphasised: the presumption of innocence applies. Everyone is entitled to this. If you are not part of the public eye and are not well-known, there is no need to make a public statement. However, if you are a well-known brand or your organisation is in the public eye, the pressure increases considerably, and a statement is necessary. Bear in mind the so-called Streisand effect. Barbra Streisand used legal means to prevent the publication of photos of her property. However, this made the photo much better known than if she had done nothing. Any action on your part can trigger this effect. If you get involved, you can decide in which form, length and depth you want to do this. Denials, in particular, can also be very short.

Implementation

Managers need to be professionally and permanently trained and educated. The 'no time' argument is irrelevant here; after all, you don't have time for the scandals that arise from misconduct. According to the Chartered Management Institute (CMI), 82% of managers have received zero minutes of management training. In such cases, you are responsible for the consequences and damage, and if you have decided on those measures with and against them, you are at least conditionally complicit. In no other professional field would you give such responsibility to people without training and experience. The same care must, therefore, be applied to management work.

Dealing with power must also be learnt. In large organisations, employees complain about a lack of decisiveness at lower management levels and, therefore, too little use of power. In contrast, at the highest levels, there is often talk of the exact opposite, i.e. abuse of power. The importance of professional learning in these aspects is no longer even up for debate in modern organisations. Correspondingly, comprehensive training programmes are already the standard for sustainable organisations.

You also need some guidelines. These must include the right to a safe space. No person should have to fear the integrity of their physical or mental health at work. If allegations are made, confidential channels must be created. This right applies to everyone involved. The presumption of innocence applies to all those involved. If guilt is established, appropriate measures and consequences must be taken. Releasing misbehaving managers with financial support instead of dismissing them will cost you credibility in the workforce for the foreseeable future and cause low motivation, high absenteeism and equally high staff turnover. Sanctions must be imposed for minor misconduct, and once these have been applied, everyone has the right to reintegration and a return to normality in the workplace. These are democratically guaranteed rights. In the case of serious offences, however, there is no way around dismissal, even for the most senior managers. In times of crisis, you will be viewed particularly critically, as this shows how much the organisation stands by the communicated values in reality.

Conclusion: clear rules, clearly communicated knowledge and experience, clear implementation - this is how you deal with mistakes.

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Niels Brabandt is an expert in sustainable leadership with more than 20 years of experience in practice and science.

Niels Brabandt: Professional Training, Speaking, Coaching, Consulting, Mentoring, Project & Interim Management. Event host, MC, moderator.