Being the boss comes with a lot of responsibilities. They’re the person everyone else looks to for leadership and direction. But what happens when the boss is caught doing things they shouldn’t be? That’s when scandals can hit – and public relations nightmares begin.
A great boss – whether a business owner or C-suite executive – is often not only a role model inside a company, but also the public face of the business outside the office. The person in this role is usually skilled at building brand awareness and bringing positive attention to the organization. Sometimes, however, company leaders make news for all the wrong reasons. Here are some notorious examples and what small business owners can learn from them.
1. Dan Price, Gravity Payments
CEO Dan Price brought Gravity Payments, a payment processing company, into the national spotlight in 2015 when he garnered attention for changing how much he paid employees. He set a new salary minimum of $70,000, even slashing his own pay so all staffers could earn a livable wage. One would say this was a high mark for the company.
But Price’s newfound fame backfired a handful of years later. In 2022, he became the subject of sexual assault and abuse allegations. Just as his benevolence went viral, so did his alleged sordid behavior. Citing his presence as a distraction to the company, Price resigned – taking his now-tarnished reputation with him but sullying his company’s good name in the process.
Key lessons: It’s always great when the boss gets press and social media attention for good reasons – much less so when it’s for something bad (and potentially illegal). While as CEO, Price certainly wasn’t going to vet himself, it’s vital to do what you can to ensure the person you’re putting front and center on your company’s behalf doesn’t have skeletons hiding in their closet. If that person’s disturbing past comes to light, it’ll likely damage not only their career but also your business. When a controversy does erupt, the best way to mitigate the consequences may be to cut ties with the offender, even if (and perhaps especially if) they’re your CEO.
Before letting an employee go, even if it’s your CEO, make sure they don’t have grounds to sue for wrongful termination.
2. Scott Thompson, Yahoo
In 2012, Scott Thompson was hired to fill the role of CEO at Yahoo when Carol Bartz was fired from the company. Given Yahoo’s prominence in the marketplace, the leadership transition received a ton of attention, and the opportunity could’ve been the pinnacle of Thompson’s career after noteworthy stints at Visa and PayPal. But his time at Yahoo’s helm was doomed shortly after it began.
Just a few months into his tenure, Thompson scored somewhat-predictable bad press for laying off 2,000 employees. What happened next was far less predictable: Activist shareholder Dan Loeb publicly accused the new CEO of falsifying his resume with a degree he didn’t have. The shareholder cited an SEC filing that stated Thompson had a degree in “accounting and computer science” when he, in fact, held only an accounting degree.
This alleged embellishment reflected poorly on Thompson, yes, but also Yahoo’s board, which was accused of not sufficiently verifying the executive’s credentials. The company initially tried to chalk up the discrepancy to an “inadvertent error,” but as the bad buzz built, Thompson headed for the exits. His departure was said to be due to a cancer diagnosis, but the timing certainly made people think otherwise. [Read related article: The Shocking Cost of Resume Fraud]
Key lessons: As a business owner, you have a ton on your plate and often need to delegate. That may mean leaving background checks and job reference checks to your HR team. But when you’re hiring for one of your company’s more prominent roles, you ought to be heavily involved in the vetting process, and no stone should be left unturned. And if you’re going to cite something in an SEC filing, as Yahoo did about Thompson’s purported education, you had better make darn sure it’s accurate. If you don’t do your due diligence, your company’s integrity may be called into question, and you may also be stuck having to replace the person you just hired.
3. Braden Wallake, HyperSocial
Employees often want their bosses to see them as human – real people with real emotions and needs. Perhaps HyperSocial’s Braden Wallake wanted bosses to be seen that way too. How else to explain the crying selfie he posted on LinkedIn after laying off workers? Wallake, whose 2022 post went viral and earned him the nickname “Crying CEO,” asserted he was trying to show the emotional toll having to fire workers took on him, but his effort came off as tone-deaf. After all, he still had a job; many at his company didn’t.
Wallake was criticized for being out of touch and seemingly trying to make a difficult time for employees about himself. Amidst national headlines, he penned a public apology and did some interviews explaining the thinking behind his tear-stained snapshot. He even demonstrated that he could take the jabs coming his way in stride, updating his LinkedIn description to “Just your friendly neighborhood viral crying CEO.” And CEO he remains – unlike some other embarrassing bosses on this list, Wallake kept his job.
Key lessons: More and more, people are craving vulnerability in the workplace. But there are times when that vulnerability can come across as inauthentic or misplaced. Before posting emotion-driven messages and photos on social media, it’s wise to do a “tone check” with someone you trust. Have them take a look at your planned post and give an honest assessment. How do they interpret your message? How do they think it’ll go over with your intended audience and beyond? Your heart might be in the right place, but good intentions don’t always lead to the desired results. If you do make a misstep on social media, own up to it as soon as possible. Addressing the problem with honesty and humility can sway the court of public opinion back in your favor.
PR mistakes like Wallake’s can kill your business. That’s why it’s essential to closely manage your online reputation.
4. Steph Korey, Away
Perhaps the best way to sum up Steph Korey’s rise, fall, rise again and fall again from grace is “worst roller coaster ride ever.” Korey co-founded Away, a luggage company, in 2015 and helped build the business to a valuation of $1.4 billion by 2019. But toward the end of that year, an expose published by The Verge revealed a toxic workplace culture at Away, including Slack messages Korey sent berating employees. Days later, she acknowledged her bad behavior and resigned as CEO. [Learn about the types of toxic employees.]
A month later, however, Korey decided to give things another go, disputing the allegations she previously acknowledged and saying she would now be co-CEO with her replacement. How did that go over? Well, the company’s chief of human resources quit upon Korey’s return, and many staffers had no idea about her resurrection at the company until it was announced in the press.
Despite Korey’s attempted comeback in early 2020, by mid-year, it was revealed she’d be leaving the business again. This time, the news came after employees and consumers alike raised concerns about Korey’s social media posts, some of which made people question the company’s commitment to diversity, equity and inclusion. Still, Korey didn’t actually exit until a few months later.
Key lessons: First and foremost, while company communication channels may seem private, there is virtually nothing stopping someone from leaking those messages to the media. If you can’t stand by what you’ve said, you probably shouldn’t be saying it. It is especially incumbent upon bosses to communicate with respect and treat employees appropriately. If you step out of line and pledge to do better, then you actually have to do better. Continuing to engage in poor behavior shouldn’t be acceptable. And if you’re going to apologize for your wrongdoing, certainly don’t then do an about-face and suddenly take that apology back.
5. Bob Chapek, The Walt Disney Company
You know you’ve done a bad job as CEO when the guy who retired from the role comes back to take your place. That’s what happened when The Walt Disney Company kicked Bob Chapek to the curb in 2022 and brought back his predecessor, Bob Iger. What made this defenestration even more embarrassing is that Chapek was Iger’s hand-picked successor. You know what they say about best-laid plans.
In Chapek’s case, a number of questionable decisions and compounding scandals sealed his fate. He angered theme-park goers by raising prices, star talent like Scarlett Johansson by fighting her on compensation, employees by reorganizing divisions, and people on both the political right and left by his response (or lack thereof) to Florida’s controversial Parental Rights in Education Act. Despite all the ill will Disney engendered due to Chapek’s actions, the company’s board initially indicated its continued faith in him by awarding Chapek a three-year contract extension in June 2022.
By the fall, however, the board was regretting its decision, especially after Chapek further upset shareholders with his oddly upbeat demeanor on an earnings call where Disney addressed less-than-stellar performance numbers. With all confidence in Chapek’s leadership gone, the board invited Iger to return and, upon his acceptance, ousted Chapek in a move that will go down in Disney – and business – history.
Key lessons: It’s hard to fault a boss for wanting to make their mark. You take the helm, you want to shake things up, and you want to have an impact. But if you’re not careful, that impact may have more negative effects than positive ones. Maybe you can survive alienating one group of people, but being hated by employees, shareholders, customers and a significant portion of the general public? You’re toast. It doesn’t have to get to that point, though. A good boss will limit self-inflicted errors by being receptive to feedback, surrounding themself with the right counsel and understanding that sometimes brand image is more important than profits.
In addition to looking to Disney and other entertainment companies for business insights, you can also learn game-changing business lessons from Emmy-nominated TV shows and must-see business movies.
There’s value in looking at the stories of bad bosses beyond merely delighting in gossipy scandals and viral infamy. By studying the mistakes made by some of the worst of the worst, you can better understand how leadership affects your business from top to bottom. You may not be the CEO of companies as big or notable as Disney and Yahoo, but as outlined above, these bosses’ embarrassing behaviors have practical lessons that can apply to all companies.