The past year has seen the departure of many CEOs of large, prosperous companies across both California and the rest of the country. Prior to 2018, NPR reports that the main reason CEOs departed ways with their companies was due to financial reasons.
However, over the past year, many CEOs have become mired in conflict over allegations of sexual harassment or misconduct. PwC recently released a study detailing that of the 89 CEOs who parted ways with large companies in 2018, 38% left or were forced to leave due to unethical behavior, including sexual misconduct. Some of the biggest names with high profile CEO departures included CBS, Barnes & Noble, Lululemon, Intel and more.
A Substantial Shift After 19 Years of Consistency
Dating back to 19 years ago, PwC’s study has consistently found poor financial performance to be the leading reason for CEO departure across the country. This was the case until this past year, when unethical behavior, often connected to sexual misconduct, took over this top spot.
The hardest-hit companies include those in the communications, materials and energy sectors. While poor financial performance was still a leading cause of CEO departures, the findings of the study are reflective of a culture growing tireless of sexual harassment and misconduct in the workplace.
A Growing Trend of Holding CEOs Accountable
A University of Chicago professor notes that while the #MeToo era first focused on the highest profile names, companies and others, 2018 and 2019 now see trends of holding accountable CEOs of the lesser known companies and names. Companies across California and the country are learning that without an aggressive strategy to confront sexual harassment in the workplace, both workplace culture and public relations can suffer.
The PwC study shows that as more victims of sexual misconduct in the workplace come forward with allegations, companies face growing pressure to hold perpetrators accountable and take action. This pressure applies to all at the company, from lower level managers to those at the top, including CEOs. The study found that more corporate boards have taken a “zero-tolerance” approach to allegations involving executives. Swiftly addressing concerns and allegations is the most effective solution.