How boards and communicators can react when leaders behave badly

When leaders behave badly, it’s on comms to react decisively. Consider recent instances of CEOs from Astronomer and Nestlé being ousted from their positions due to impropriety that has cast the companies in a negative light. That sort of embarrassment doesn’t just ding the company’s reputation — it also can chip away at internal morale.

For an internal communicator, it’s all about getting information to your employees to preserve their experience and the organization’s reputation for current and prospective employees. However, a less-discussed aspect of the equation during these leadership crises is the role of the board. Their influence can greatly affect the internal communications process.

Montieth Illingworth, CEO of Montieth and Company, told Ragan that when a leadership crisis does happen, communicators should work with the board to create messaging that preserves both the company’s internal culture and external image. When employees see that the board wields influence over leadership, a sense of stability can take hold.

“You want to be able to convey that people in the company who have authority also have certain responsibilities and that’s what protects the integrity of the culture,” Illingworth said. “We’re going to make sure to say that if people in authority do not take responsible action, there will be consequences.”

Working with the board in a crisis

When a CEO is terminated or pushed out for publicly embarrassing the company, the decision will often come from the board. When that happens, comms pros need to be on deck to share that news internally and externally. That can also include the transitions that come after. The Nestlé situation is a great example of this in action — the board issued press releases when former CEO Laurent Freixe was forced out and when Philipp Navratil took the top job. These communications make it clear to employees and stakeholders that the CEO isn’t the end-all, be-all at the company and operations will go on. A snippet of the memo is below.

Nestlé’s Board of Directors today announces that Philipp Navratil has been appointed as CEO of Nestlé, S.A., following the dismissal of Laurent Freixe with immediate effect.

The departure of Laurent Freixe follows an investigation into an undisclosed romantic relationship with a direct subordinate which breached Nestlé’s Code of Business Conduct. In line with best practice corporate governance, the Board ordered an investigation overseen by Chairman Paul Bulcke and Lead Independent Director, Pablo Isla, with the support of independent outside counsel.

Paul Bulcke, Chairman, stated: “This was a necessary decision. Nestlé’s values and governance are strong foundations of our company. I thank Laurent for his years of service at Nestlé.”

He continued: “I am pleased to announce Philipp Navratil as CEO. Philipp is recognized for his impressive track record of achieving results in challenging environments. Renowned for his dynamic presence, he inspires teams and leads with a collaborative, inclusive management style. The Board is confident that he will drive our growth plans forward and accelerate efficiency efforts. We are not changing course on strategy and we will not lose pace on performance.”

“The board has to be involved in these processes,” he said. “The head of HR is not the only person who’s responsible for enforcing or policing the policies of the company. When the C-suite is involved, the board has to weigh in. It’s a financial and ethical responsibility of the board to speak up to protect the reputation of the company.”

Internal comms should ensure that any statement from the board is based on the company’s policies and standards to reinforce what is and isn’t acceptable.

“Being clear about the reason for the termination sends a message from the board,” he said. “The company takes the policies seriously. Termination in and of itself is not enough. It’s enforcing the policy, really owning up to the importance of the consequences in your messaging.”

Illingworth also said that internal communicators tasked with creating employee-focused statements should work with the board to craft messages that address the fact that the board was involved in the decision to remove the leader. A minimalist approach with statements is the way to go. “Typically, the messaging states as little as you need to about the event itself, because there’s always that possibility of a wrongful termination suit,” he said. “You contain it within the four corners of the policies of the company. Say as few words as you possibly can and make sure you’ve got legal reviewing that statement before it goes out to your employees.”

Illingworth added that even in chaotic moments like a hasty leadership exit due to bad behavior, communicators can take board decisions as an opportunity to reinforce the cultural norms of the organization. Even in the chaos, there are positives communicators can draw.

“The trick is to turn that into a positive message by saying what you stand for as a company, Illingworth said. “It applies to everyone. And if we protect this part of our culture, we’ll be a stronger company for it.”

Sean Devlin is an editor at Ragan Communications. In his spare time he enjoys Philly sports and hosting trivia.