In Flagrante Indiscretions

Today’s entry is based on one of the 20 case studies in my position paper, “Beyond the Bottom Line: 20 Ways to Reduce Reputational Risk.”

The risk

Your all-American, squeaky-clean, and very much married CEO is caught having an affair.

The Background

Your chief’s peccadillos stomped all over your planned new product launch. So much for its smooth addition to your revenue stream.

Rumors had been circulating for some time that your supposedly happily married CEO strayed. His torrid extramarital affair with his long-time executive assistant was confirmed when a corporate responsibility gadfly posted a Twitter video of a romantic tête-a-tête between the two lovebirds. The video tweet quickly went viral. Did your tormentor time its release to coincide with your product release? It’s possible, though it really doesn’t matter now, for the damage has been done.

On a personal financial level, how much do you think this dilemma will affect his next performance and salary review by your board? He could be in line to lose out on some serious cash.

Lovers in sunset

The Reputational Costs

Your primary trade association cancelled the CEO’s scheduled keynote speech to its annual meeting, diplomatically citing “last minute scheduling conflicts.” At least they didn’t refer to him as the laughingstock of your industry, as others have.

An interview on CNBC, which took your communications staff weeks to cultivate, is dead. It’s not that CNBC doesn’t want an interview; they certainly do. Their current interest, however, rests not with your new product launch, but with your chief’s personal travails. You cancel his appearance.

Meanwhile, the gadfly who circulated the video—long a thorn in your company’s side—is traveling the media circuit to discuss his triumph. Thanks to your CEO’s indiscretions, your tormentor now has a bigger platform than ever to spread his antagonistic thoughts.

Recommended Action

  1. Your CEO has to face the music. If he is adept at parrying tough questions, schedule an interview with a relatively friendly trade publication. If he is easily tongue-tied, issue a statement.
  2. Devoting more budget resources toward communications is a must. Other executives will need to step forward as the public voice of your firm for now. This means more work for your communications shop as they (and the external communications training consultants you use) need to rapidly improve the communications skills of your second tier of leaders.
  3. Reference “A Buyer’s Guide to Communications Training Consultants” to ensure you select an external expert who is truly capable of helping that second rank of executives.

Have you faced this type of CEO snafu? What steps have you taken to minimize the reputational damage?

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