Recently, Forbes published a list of the top ten CEO screw-ups for 2010. It confirms what most of us expected to see, but there were a few that stood out.
My favorite was a late entry – something that blew up recently. Gary Holden, the chief executive of Canadian energy company Enmax, fired off a long e-mail note to his entire staff in an attempt to justify his $2.7M salary and the lavish parties he threw on company dollars. By all accounts (that I’ve read so far), the note was overly defensive, even paranoid. It seemed to go as far as to threaten the staff if they leaked information to the media.
So what did the staff do? Leaked, leaked, leaked! As you can imagine, the media had their fun. The public responded by demanding an apology and more transparency. The company cancelled their holiday party. After all this, how much cheer could you rally now?!
The Enmax board of directors now has two agenda items on their “to do” list that they never asked for or wanted: fix the tarnished image and communicate more with constituents. The latter should become a permanent performance task.
The list serves as a reminder of how important PR, communication and reputation are to the welfare of a company. It is also further evidence that even as the economy improves and CEOs regain the confidence of the public, what remains is the public’s call for transparency and genuine efforts to earn trust. Just because a company is turning profits again, paying dividends and restoring its stock value, this does not mean that the public will turn a blind eye to C-level antics.
If the company leadership had affixed a trust “lens” on all actions and decisions and ensured that all executives used it, Holden might have recognized the reputational risk in sending such an email. If the board had a mechanism in place to oversee the executive management committee’s communications, this misstep may have been avoided. And if they were already communicating transparently with stakeholders, they wouldn’t find themselves in such a deep reputational hole.
Instead of asking themselves “what if?” they could be getting ready for a fun holiday party.
What do you think? Will some CEOs never learn?