When the chief goes on trial
If you are arrested and jailed on a business trip or accused of improper conduct by a whistle-blowing colleague, it would be comforting to know you could rely on a sympathetic hearing from your employer. Comforting, but unrealistic - especially if you are the chief executive.
David Carruthers discovered this harsh reality when he was sacked last week as chief executive of BetonSports, the UK-listed online gambling company, while being held in a Texas prison on charges of fraud, racketeering and conspiracy.
The company explained it had been unable to speak to Scottish-born Mr Carruthers, who pleaded not guilty to the charges this week. "While he remains in the custody of the US government he is unable to perform his duties," it said.
Is pulling the plug the right way for companies to deal with employees who land in hot water or is there a kinder option?
Strictly speaking, an employer has to follow careful procedures in order to satisfy an employment tribunal that dismissal for misconduct was fair, says Toni Lorenzo, a partner in the employment practice of Lewis Silkin, a UK law firm.
"We get calls from panicked employers about a senior director or an employee who's been arrested, asking: Can I dismiss them?" he says. "The answer is: No. You've got to conduct your own investigation and conclude yourselves that the individual is guilty of gross misconduct before dismissing them."
When there are serious, public allegations involving a top executive, however, boards may have little choice but to take swift action, he says. In these cases, they must balance the executive's rights and potential claim for unfair dismissal and breach of contract against their duty to protect shareholders from the damage the allegations do to the company.
"Many people think senior executives get more protection, but it's not the case," he says. "Investor confidence looms so large that I'm afraid chief executives will be sacrificed, even if nothing is proven. If they had gone down the route [of supporting him], they would have the moral high ground but the company might not have survived."
Mr Carruthers' arrest sent BetonSports' shares down sharply before they were suspended and wiped millions of pounds off the value of companies in the sector amid fears of a broader US crackdown on gambling. US authorities have suspended BetonSports' American operations, accounting for 85 per cent of the business.
Faced with an accusation against a senior executive, boards must weigh up other factors, too: how closely is the alleged crime linked to the company's business, did it take place on company time or in the executive's own time, and how does it look in relation to the the company's own code?
"The shareholders might not care about the CEO looking at porn or driving while drunk, but they would care about the CEO committing fraud," says Frank Partnoy, a professor at the University of San Diego School of Law.
Once charged, things become even trickier for an executive. "It becomes very difficult for the board to say 'we'll continue to go with this CEO', given the relatively high probability he will be convicted and the logistical nightmare of the CEO trying to manage the criminal case and the day-to-day issues of the company."
Nonetheless, in Mr Carruthers' case, his treatment has elicited outrage from some quarters. An executive from a rival company has criticised BetonSports for leaving him "to the sharks". As the FT reported, the share-tipping website UK-Analyst.com has called for his reinstatement, saying he was arrested "not for breaching company rules but for implementing them".
Sue Ashtiany, head of employment at Nabarro Nathanson, the UK law firm, is also uneasy. "I think it's rather distasteful to sack someone straight away in situations like this," she says. "My feeling is: why don't you suspend [the executive], see what's happened and give yourself time for a proper inquiry."
This is what happened in the recent high-profile allegation of price-fixing against British Airways, in which two senior executives were suspended pending the results of an investigation.
Disciplinary procedures that came into force in the UK just under two years ago require employers to take three steps: write to the employee telling them what they have done wrong and inviting them to a meeting to discuss it; hold the meeting and follow up with a written decision and the offer of an appeal; hold an appeal hearing if requested.
In extreme cases, employers can cut out the meeting. Given Mr Carruthers' incarceration in the US, while on his way to the company's headquarters in Costa Rica, "this might be a classic case to do that", says MsAshtiany.
Rather than being fired, chief executives often resign under pressure - as did Harry Stonecipher at Boeing, the late Kenneth Lay at Enron and Bernie Ebbers at WorldCom.
A recent US case underlines how chief executives of public companies can be forced out, even if they do not admit to the accusations against them. Brian Keane resigned in May as chief executive of Keane, the US-listed technology services company founded by his father, after two employees alleged sexual harassment against him, knocking the share price. The company said Mr Keane had denied any unlawful behaviour but added that its high standards for employee conduct went beyond what the law required. It reached settlements with his accusers, one of whom, the vice-president of marketing, received $1.14m (￡605,000) but also stepped down.
Some see the dispensability of top executives as part of a wider shift in behaviour by boards that are increasingly fearful of regulatory crackdown, criminal investigation, media scrutiny and shareholder lawsuits.
"For a long time, boards tended to look the other way and not hold CEOs to the highest standards," says David Nadler, chairman of Mercer Delta, a consulting firm. "Now boards are too ready to dump the CEO, even on a suggestion or an uncorroborated accusation.
"There are some boards where directors are more concerned about their own well-being. Rather than find out the truth and take some time over it, they quickly want to head for the line of least resistance."
Boards have a duty to assess the character as well as the performance of the chief executive, but action should not be taken against them on skimpy evidence, he says. "I think boards really need to have a balance between vigilance on the one hand and the courage to support the presumption of innocence on the other."
Yet allegations and suspicions disrupt productivity, and boards know that. Steve Mader, vice-chairman of Christian & Timbers, the US executive search company, has two pieces of advice. One is that boards should hold the accuser to account, as well as the accused. The other is that senior executives need to be aware how vulnerable they are once accusations become public, sometimes simply because of a grudge.
"If you want someone to go, you make an accusation," he says. "It's a vulnerability in the way the system works. People can use public reaction as a device, and I'm sure it's been done."
易被抛弃的CEO
如
果你在商务旅行中被捕入狱，或者被某个告密的同事指控有不当行为，那么，知道你能从雇主那儿听到一些同情的话，或许会让你感到安慰。会感到安慰，但不现实――如果你是首席执行官，就更是如此。
戴维?卡拉瑟斯(David Carruthers)发现了这个残酷的现实。上周，公开上市的英国在线赌博公司BetonSports解除了他的首席执行官之职，而他当时正因作假、诈骗和共谋等指控被关押在美国德克萨斯的一所监狱里。
该公司解释说，一直无法和卡拉瑟斯取得联系。出生在苏格兰的卡拉瑟斯本周进行了无罪辩护。公司表示：“由于仍然在美国政府的羁押之下，他不能履行自己的职责。”
想说“留你”不容易
面对陷入困境的雇员，断绝关系是企业应该采取的正确方式吗？是否还有更友善的选择？
英国Lewis Silkin律师事务所雇佣关系领域的合伙人托尼?洛伦佐(Toni Lorenzo)表示，严格地说，雇主必须审慎地照章办事，以确保对行为不当的雇员做出的解雇决定是公正的。
“我们接到许多惊慌的雇主打来的电话，就高管或雇员的被捕询问我们：我可以解雇他们吗？”他说道。“答案是：不。在解雇他们之前，你必须自己着手调查，得出自己的结论，确认这个人确实犯有行为不当的罪名。”
然而，他表示，当公开的严厉指控涉及最高层管理人士时，董事会也许别无选择，只能迅速采取行动。在这种情况下，一方面是高管的权利，以及可能因不公正的解雇和违反合同而遭到索赔，另一方面是保护股东利益免受指控对公司造成的损害，董事会必须在两者之间进行权衡。
“许多人认为，高管能得到更多保护，事实并非如此，”他表示。“投资者信心显得如此重要，恐怕只好牺牲首席执行官了，即便一切都没有得到证明。如果董事会选择支持他，他们会占据道德高地，但公司也许无法生存。”
卡拉瑟斯被捕，导致BetonSports股价在停牌前一落千丈，而对美国加大赌博打击力度的担心，使业内企业市值锐减数百万英镑。美国当局已暂停BetonSports的美国业务，而这项业务占该公司总体业务的85%。
面对高管受到的指控，董事会还必须考虑其它因素：高管涉嫌的犯罪行为与公司业务的联系有多密切？是发生在工作时间还是在高管的私人时间？看起来与公司本身的规定关系如何？
美国圣迭戈大学(University of San Diego)法学院教授弗兰克?帕特诺伊(Frank Partnoy)称：“股东也许不在乎CEO看色情小说或醉酒驾车，但他们在乎CEO的欺诈。”
一旦受到指控，高管的情况就会变得更加棘手。“考虑到他被判有罪的可能性比较大，而CEO既要应付刑事案件，又要处理公司日常事务，这也是一件非常可怕的事，因此，‘让他继续当我们的CEO’这种话，董事会也很难说出口。”
合理待遇应可期
话虽如此，卡拉瑟斯的遭遇还是激起了一些人的愤慨。某同业公司的一位高管批评BetonSports听凭他“落入虎口”。如《金融时报》此前的报道称，股票信息共享网站UK-Analyst.com呼吁让卡拉瑟斯复职，指出他被捕“不是因为违反了公司规定，而是因为执行了的公司规定”。
英国律师事务所Nabarro Nathanson雇佣部门主管休?阿什蒂亚尼(Sue Ashtiany)也感到不安。“我认为，一个人遇到这种情况就马上被解雇，这很令人反感，”她表示。“我的感觉是：为什么不先让这位高管停职，看看发生了什么，给自己留出进行适当调查的时间呢？”
在最近备受关注的英国航空(British Airways)价格操纵案中，就发生了这样的事情：公司两名高管被停职，等待调查结果。
英国近两年前开始施行的纪律程序要求，面对这种情况，雇主必须采取以下3个步骤：写信给员工，告知其所犯的错误，邀请他们参加会议讨论这个问题；召开会议，然后作出书面决定，并给员工上诉的机会；如果当事人提出要求，召开上诉听证会。
在极端的情况下，雇主可以省去会议程序。阿什蒂亚尼表示，鉴于卡拉瑟斯在前往哥斯达黎加公司总部的途中在美国被捕，“这可能是采取这一措施的典型情况。”
首席执行官通常不是被解雇，而是迫于压力辞职的，就像波音(Boeing)的哈里?斯托尼斯弗(Harry Stonecipher)、安然(Enron)已故的肯尼思?莱(Kenneth Lay)和世通公司(WorldCom)的伯尼?埃博斯(Bernie Ebbers)等。
美国最近的一个案例突出表明，即使不承认对其提出的指控，上市公司首席执行官也会被迫离职。美国上市公司Keane的首席执行官布莱恩?基恩(Brian Keane)今年5月离开了他父亲创建的这家科技服务公司。此前两名雇员对他提出性骚扰指控，令公司股价大跌。该公司表示，基恩否认存在任何违法行为，但公司强调，公司员工的行为准则标准要严于法律要求。公司与原告达成了和解。其中一名原告是公司营销副总裁，获得了114万美元赔偿，但也下台了。
奥秘尽在董事会
一些人认为，高管的可有可无，说明了董事会行为的更大转变，他们越来越害怕监管部门的打击、刑事犯罪调查、媒体的监督和股东诉讼。
“长期以来，董事会往往会以另一种方式看问题，不按最高标准约束首席执行官，”咨询公司Mercer Delta董事长戴维? 纳德勒(David Nadler)表示。“现在董事会则过于愿意抛弃首席执行官，哪怕仅仅是因为一个建议或是一项未经证实的指控。”
“在一些董事会中，董事们更关心自己的利益。他们不想找出事实真相，花时间进行调查，而是马上就想采用最省力的方法。”
他表示，董事会有责任评估首席执行官的人格和表现，但不应在证据不足的情况下就采取行动。“我认为，董事会确实需要作出权衡，一方面要保持警惕，另一方面还要有勇气支持无罪假设。”
然而，指控和猜疑会影响生产效率，董事会明白这一点。美国高管猎头公司Christian & Timbers副董事长史蒂夫?马德(Steve Mader)有两点建议。第一，董事会应让原告和被告对自己的行为负责。第二，高管们需要意识到，一旦指控被公开，他们可能会变得多么脆弱，而有时这些指控仅仅是出于忌恨。
“如果你想让某人离开，你就提出指控，”他表示。“这是整个系统运作中的一个弱点。人们可以借助公众反应作为工具，我确信有人已经这么做了。”
