CEOs are not immune from adversity. We look at the fate of four chief executives who were beset by scandal in 2016.
We look at four CEOs who were rocked by scandals in 2016: Deborah Thomas, John Stumpf, Elmer Funke Kupper and Darren Huston.
1. Deborah Thomas 1. Deborah Thomas
Deborah Thomas became CEO & Managing Director of Ardent Leisure Group in April 2015. Thomas took on the role after 30 years in the publishing industry, including a decade-long stint as Editor-in-Chief of The Australian Women’s Weekly.
The former journalist faced the biggest challenge of her career when in October 2016 four people died in a tragic accident on a ride at Dreamworld, a Gold Coast amusement park owned by Ardent Leisure. Thomas immediately faced criticism for the way Ardent handled the crisis, including a delay in contacting the victims’ families and the ill-timed announcement in the week after the accident detailing Thomas’ bonus, which totalled $843,000 over four years. Thomas donated her entire $167,000 cash bonus to the victims’ families via the Australian Red Cross, acknowledging that errors were made in the response to the tragedy.
Some commentators have questioned whether Thomas deserved the severe criticism, which included death threats, she received. Do “we still judge women in leadership positions more harshly than men particularly when – as all humans do – they stumble and make mistakes?” asks Jane Caro, writing for The Age, who believes Thomas’ experience following the Dreamworld tragedy reveals a double standard in the way we treat men and women in positions of leadership.
2. John Stumpf 2. John Stumpf
John Stumpf stepped down as CEO of Wells Fargo & Company in October 2016 after it was revealed thousands of unauthorised bank accounts had been opened in customers’ names without their consent.
Stumpf initially tried to blame the misconduct on junior employees, many of whom defended their actions on the basis that the practice was encouraged to meet aggressive sales targets. According to a Bloomberg report, junior staff said “managers told them to do whatever it took to open new accounts, even if customers didn’t ask for them.”
News of multimillion dollar settlement following misconduct allegations led to a U.S. Senate hearing, where Senator Elizabeth Warren accused Stumpf of “gutless leadership”. Wells Fargo was fined nearly A$250 million for opening 2 million fake accounts, and Stumpf agreed to forfeit A$55 million in pay amid calls for his resignation. After nine years as CEO, during which time he guided Wells Fargo through the global financial crisis to become one of the most successful home lenders in America, Stumpf quit on October 12.
3. Elmer Funke Kupper 3. Elmer Funke Kupper
Elmer Funke Kupper resigned from his position as Australian Securities Exchange CEO in March 2016 following an investigation by the Australian Federal Police into an alleged bribery payment made by Tabcorp when Funke Kupper was its CEO. An illegal payment of A$200,000 was allegedly made to the family of the Cambodian prime minister Hun Sen at a time when Tabcorp was trying to secure a gambling licence to operate in Cambodia ahead of the 2010 FIFA world cup.
Funke Kupper, who denied any wrongdoing, said at the time that he resigned in “the interests of good corporate governance and the interests of strict process. I have taken this step so that the company is able to build its future.”
The ex-Tabcorp chief received a payout of nearly A$3 million following his resignation. He has since been replaced as ASX CEO by Dominic Stevens.
4. Darren Huston 4. Darren Huston
Darren Huston stepped down as CEO of the Priceline Group in April 2016 following revelations that he had engaged in a relationship with an employee.
While the employee was not under Huston’s direct supervision, an investigation by the board found that his actions violated the company’s code of conduct. A statement released by the board said the Canadian CEO “had engaged in activities inconsistent with the board’s expectations for executive conduct, which Mr. Huston acknowledged and for which he expressed regret.” Huston also resigned as CEO of Booking.com, also owned by The Priceline Group.