Strategy & Leadership

CEOs face the axe for embarrassing opinions

May 06, 2014


May 06, 2014

Victoria van Lennep
Contributor, The Economist Intelligence Unit

Victoria is Head of Operations at Lendable, a peer-to-peer lending platform. Previously Victoria worked as a deputy editor in the EIU's Thought Leadership team. She holds a Bachelor and a Master in Economics from the Universite Libre de Bruxelles, and an MSc in Environmental Policy from the University of Oxford.

Two thirds of the EIU's Opinion Leaders Panel agree that companies should be able to fire their CEOs for potentially damaging personal views

CEOs are public figures and, as such, clearly have a responsibility to behave in a way that reflects well on their companies. But should this extend to their personally held beliefs?

Two high-profile businessmen recently learned the hard way that, in the 21st Century, private opinions – especially controversial ones – have a habit of becoming public, often with disastrous effects.

Donald Sterling, the owner of the LA Clippers basketball team, was last week banned for life by the NBA following public outcry at racist remarks he allegedly made in a private conversation.

Sterling’s fall from grace came soon after Brendan Eich, newly appointed CEO of the Mozilla Foundation (the company behind the Firefox browser), was forced to resign after it emerged that he had donated money to a campaign against marriage equality back in 2008.

These examples saw business leaders toppled for manifestly unpopular (not to mention offensive) opinions. Does that mean CEOs should be fired if it is revealed that they hold an unpopular view? And should companies make sure candidates for top jobs don’t hold opinion that might damage the company reputation before hiring them?

We asked our Opinion Leaders’ Panel, made up of over 100,000 executives and senior managers from around the world. We got over 1,500 responses and the results were as follows:

  1. Two thirds (66%) of business leaders agree that companies should be able to fire senior executives for potentially damaging personal views

  1. Just over two thirds (69%) say that companies should ask candidates for senior positions about their personal views?

This is good news, says Philippa Foster Back, director of the Institute for Business Ethics. She argues that CEOs that make unbalanced or derogatory comments should always be held accountable for them, particularly if they are made public and become detrimental to shareholders. “You expect your CEO to be honest but only in a way that is supportive of the business,” she says.

Furthermore, Ms Back feels it is essential that senior executives have personal views that are in line with the company culture. “If you have got a set of values of how the business is done, you want to be looking for somebody who is going to share those values in order to promote the business in the right way,” Ms Foster Back explains. “That is the art of interview, isn’t it?”

What do you think?

Is it right that CEOs should be vetted for the personal opinions? Is there a danger that people with unpopular but valid views will be discriminated against? Or is it simply common sense that companies should avoid appointing executives who are in danger of becoming pariahs?

To share your thoughts, come over to our Opinion Leaders' Panel LinkedIn group. 

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.

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