The other day, the man who has probably the best nose for corporate corruption and mismanagement popped in.
John Di Lemme came in to be on the radio show we do Thursdays at my PR firm, TransMedia Group.
Having held lofty, tense and perspiring positions at NBC and ABC, I couldn’t help asking John about what caused CEO Leslie (Les) Moonves to self-destruct at the one network where I never worked–CBS.
John, a high-end business consultant, turnaround specialist and marketing genius who coaches and counsels CEOs under the attention-grabbing brand “My CEO Stinks,” had this to say about the Moonves downfall.
He told me how MyCEOStinks.com ties into the Moonves disaster, not to mention other failing or fledgling CEOs out there headed for the same reputational furnace.
Culture of sexual misconduct and harassment
The fire starts when companies allow a culture of sexual misconduct and harassment to fester, he said. In other words, most people knew what’s going on or at least have some idea, but do nothing for fear of reprisal.
Moonves allegedly preyed on numerous women from the early 1980s to 2006. The women suffered loss of jobs and a decline in their careers, while Moonves’ success continued to climb.
How did such a culture remain hidden so long?
According to Di Lemme, it takes money and power, but Moonves was also very good at covering his tracks, which often includes blaming/shaming the victim and charming others so that they don’t believe the victims.
“Fear was the main ingredient in Moonves recipe for staying in control, something rampant in corporate America today. The women were afraid to come forward and others who knew didn’t want to challenge the boss,” he said.
Fear is the driving force that keeps the board of directors at bay as they fear stirring the pot would reveal shameful things that could jeopardize profits, stock value, customers and reputation.
“In this situation, Moonves thought he knew exactly how far to push the boundaries in order to keep the wool pulled over the board’s eyes as well as over directors and other decision makers. However, his past caught up with him when his alleged victims spoke out and forced the board’s hand.”
For decades, no one held Moonves accountable for his actions, said Di Lemme.
“Instead, they looked the other way. When CEOs or other corporate executives aren’t accountable to the board of directors or anyone else for that matter, they have free reign to do what they want, when they want, until they eventually drive the company out of business or end up in a scandalous situation.
“One of my top quotes on accountability was featured in the June 2016 issue of Inc. Magazine in an article titled 49 Quotes that will Help You Avoid the Blame Game and Boost Your Accountability: ‘Accountability separates the wishers in life from the action-takers that care enough about their future to account for their daily actions.’
“Moonves was more concerned about getting what he wanted and led with a ‘me’ mindset rather than putting the future of the company above his own personal ambitions. As the overall success of the company continued to flourish, no one questioned his tactics.”
How could the board have prevented this disaster?
Moonves should have been held accountable for his actions so that it didn’t continue for decades. Well before he became the CEO, there was an opportunity for someone in control to call him out for his behavior, but no one did.
“As for the board of directors, instituting a simple Accountability system in their company would have likely exposed what was going on earlier so that it could have been handled in a way to protect CBS and its investors.
“Unfortunately, this lack of Accountability gave Moonves the power to persuade the majority of the directors this entire situation was a farce. They believed him and held off on taking action that should have led to his termination months ago.”
A Company in Danger Zone Due to Actions of CEO
“Even down to the bitter end, Moonves most staunch supporters defended him. That is everyone, but Shari Redstone and a few other directors, who thought that he needed to be let go due to the allegations. Moonves campaigned for himself expressing that the allegations were ‘false or hyped.’
“Unfortunately, the truth was revealed approximately two weeks later when one of Moonves’ accusers threatened to go public. Moonves once again tried to cover up the truth by trying to find the woman a job at CBS to buy her continued silence.
“It was then obvious to the board that they had been misled and the man that they had solidly backed was not who they thought he was. Meanwhile Moonves continued to make crucial decisions in the company including filing suit to dilute Ms. Redstone’s voting power and block a proposed merger of CBS and Viacom.
“Moonves irresponsibility put CBS in the danger zone with his underhanded attempts to hide the truth. The company stocked dropped and the integrity of the board is now in question especially with Moonves being one of the highest paid executives in the world earning nearly $70 million in 2017.
“CEOs should be accountable to the board of directors and not given so much leeway especially if there’s any sign that the CEO’s action or lack of action could result in damage to the company and/or its investors.”
$120 Million Severance
Forbes recently reported that under his contract, Moonves was due as much as $120 million in severance and a production deal, though the numbers could be upward of $280 million.
The board offered approximately $100 million in an exit package, holding back the additional $80 million for future settlements for the sexual misconduct allegations. This might cheer shareholders who may get to keep millions.
What effect if any will this have on CBS?
There’s a lot of uncertainty surrounding the impact that any payout at this point would have on CBS. While their contractual obligations to Moonves may be clear, the waters are very murky for everyone else watching to see what CBS will do.
“While the board’s ultimate decision will be scrutinized either way, it will be the decades of lack of action and accountability that will likely have more of an impact than the actual payout,” said the man with Olympic olfactory abilities, John Di Lemme.