With allegations of sexual misconduct swirling around CBS chief executive officer Leslie Moonves, the network giant’s board of directors has also come under scrutiny over what board members knew about the allegations, and how they’ve handled the situation.
While no formal charges against Moonves were filed, the CEO informed the board of a criminal investigation against him earlier this year. Directors then hired an outside law firm to look into the matter.
The CBS board of directors has announced that it is conducting an investigation into the conduct of Moonves and other network execs that will be led by former Securities and Exchange Commission chairwoman Mary Jo White at Debevoise & Plimpton and attorney Nancy Kestenbaum at Covington & Burling.
“With the two people that the board hired to oversee this, they wanted to take out any doubt that they had very independent and competent people handling this,” TK Kerstetter, CEO of Board Resources LLC, and editor at large of Corporate Board Member says. “Mary Jo White, former chairwoman of the SEC and Nancy Kestenbaum has a great reputation, as well. The board is saying that they’d like to make sure they do this right.”
“In the old days you might have had some time to think things through, today it’s viral in 30 minutes.” – TK kerstetter
Situations like this pose a big challenge to directors because the board needs to be on top of serious allegations such as these, but also needs to make sure that the allegations are indeed true before taking action against its own employees.
“It doesn’t matter what industry, what walk of life you’re in, it seems like these are issues that all boards and managers should be learning from,” Kerstetter says. “It’s a fine line, because you can’t delay. You’ve got to get your arms around this as fast as possible so that you can take a position, and that’s a challenge.”
For corporate directors handling CEO scandals and other corporate crisis situations, media coverage isn’t the only area to focus on, according to Kerstetter. With the rise of social media and online media outlets, these situations can spiral out of control quickly and negative public perception of a brand can leave lasting damage.
“The internet and Twitter beats the media most of the time, that’s the new phenomena. In the old days you might have had some time to think things through, today it’s viral in 30 minutes,” Kerstetter says. “At the same time, as a board member you can’t react to a lot of what happens because it is not always true. I certainly would be sensitive to wanting the facts before jumping to conclusions relative to a situation like this.”
As the CBS investigation moves forward a clearer picture of who knew what and when should emerge, and it will be up to directors to make the right decisions for the future of the network.