Ann Skeet

Below are three examples of CEOs whose leadership of their firm has been called into
question over matters of their personal integrity and behavior. Issues have included their
personal political positions and contributions, personal behavior and relationships with
employees while CEO, and illegal and inappropriate behavior in college.

Mozilla

“Mozilla was built on the mission to promote openness, innovation and opportunity on the
Web. Every day, we bring together over half a billion users and thousands of contributors
from more than 80 countries to advance the cause outlined in the Mozilla Manifesto. The
web is a vital public resource and Mozilla exists to protect it. That is what we do at Mozilla,
our singular point of focus.” --From Mozilla’s blog Q and A regarding the resignation of
Brendan Eich

Brendan Eich was a co-founder of Mozilla, an organization set up as a nonprofit foundation,

passionate about its purpose. Eich’s previous political support for the Defense of Marriage
Act, which prior to 2015 defined marriage on the federal level as the union between one
man and one woman, was well known by the board and employees prior to his appointment
as CEO. What wasn’t known was how strongly employees and outsiders would react to a
perceived disconnect between Eich’s personal values and the values of the company. In spite
of posting about his commitment to continuing the organization’s support of the LGBTQ+
community through various policies and benefits and apology for “causing pain,” the issue
did not die down. Eich made his own decision to resign as CEO and declined the board’s
offer to take another C-level position in the company.

American Apparel

“Passion, innovation & ethical practices for the clothing industry. That's American Apparel.”-
-From American Apparel’s website under “About Us”

American Apparel founder Dov Charney has never apologized for using sex to sell clothes. In
fact, it’s been central to his company’s strategy and marketing from Day One. He has also
long acknowledged his personal behavior is strange and he is his own worst enemy.

For example, 10 years ago, “Charney gave a now infamous interview with Claudine Ko, a
reporter for Jane magazine, during which he masturbated, with her consent, while carrying
on a conversation about business. He engaged in oral sex with an employee with Ko nearby,
too” (Bloomberg Businessweek, July 9, 2014). Also, in 2006, American Apparel starting
asking employees to sign a form indicating that they knew they were coming to work in a
sexually charged environment.

According to board co-chairmen, in mid 2014, Charney was removed as chairman by the
board pending termination following a 30-day notice clause in his contract. The board first
gave him the choice to resign if he gave up voting rights to his 27 percent share of the
company. In that scenario, he would have received a four-year, multi-million dollar
consulting contract. Officially removed for violating the company’s sexual harassment policy
and misusing company funds, Charney refused to go quietly, which threw the company’s
ownership and governance into play. Hedge fund Standard General stepped in with a cash
infusion for the company following a loan call by another investment firm after Charney’s
ouster. Five of the seven board directors voluntarily agreed to step down, and Standard
General agreed to add three new directors. Charney stayed on as a strategic consultant but
was eventually fired as CEO in December 2014.

Snapchat

“Deletion should be the default.”--Snapchat’s mission statement

At the end of May 2014, details of sordid emails from Snapchat CEO Evan Spiegel’s college
days were released to the media. Trouble is, his college years were only four years prior to
these emails being released, because, in 2014, he was only 24. The e-mails detailed illegal
drug use, underage drinking, and misogynistic behavior, including urinating on one after she
passed out following sex, and harassing women who he believed were overweight. Some
found elements of his emails racist as well.

Spiegel’s privileged background and lavish lifestyle had always received plenty of press. After
the email release, he began getting more press for his bad behavior than his app. He
apologized immediately following the release of the e-mails saying, “ I’m obviously mortified
and embarrassed that my idiotic emails during my fraternity days were made public. I have
no excuse. I’m sorry I wrote them at the time and I was a jerk to have written them. They in
no way reflect who I am today or my views towards women.” Spiegel remains CEO and was
responsible for taking the company public in 2017.
Leader Company Issue Outcome

Brendan Eich Mozilla Personal support of Prop 8 Resignation

Dov Charney American Sexual relationships with Dismissed as CEO in

Apparel employees resulting in lawsuits December of 2014 and
for charges of harassment, removed as
misuse of company funds for chairman prior to his
personal expenses termination

Evan Spiegel Snapchat Misogynistic behavior, drug use Still in place

prior to serving as CEO
Questions to Consider

1. Are there ethical issues involved in all of these cases? Which ones and why?
Dov Charney, the founder of American Apparel, has been accused of breaking some
ethical rules. He makes money by selling clothes through sex. He also has sexual
relationships with employees, which has resulted in litigation for harassment and
misappropriation of business funds for personal expenses. Charney never accepted
responsibility for his actions and never apologized. His behavior is against the law,
morals, and norms, and it is clearly unacceptable to the public.

2. How important to a company’s investors and shareholders is the personal behavior

of the CEO? Do people have to like him/her for the company to be successful?

The CEO's personal behavior can have an impact on the company's operations,
management, and reputation. Employees and customers may lose interest in
patronizing a business if the CEO is implicated in some ethical issues such as
corruption, fraud, or sexual harassment. This incident could lead to a drop in sales. As
a result, the CEO's personal character must be considered by the company's investors
and shareholders.

3. Does mission matter when assessing gaps between a leader’s values and the
organization he or she is running?

Personal values of the leader may have an impact on the company's operations.
Brendan Eich, the co-founder of Mozilla, for example, supports the Defense of
Marriage Act, which emphasizes that marriage is a union between one man and one
woman, despite the fact that the organization he runs is supportive of the LGBTQ+
 population. Employees and outsiders have been confused as the leader's personal
values conflict with the organization's objective.

4. Should boards consider risky personal behavior in hiring executives? What should
boards do if the risky personal behavior comes from the founding CEO?

When recruiting leaders, boards should examine risky personal behavior because it
may put the company at a disadvantage. Personal behavior of the CEO can impact
and effect the company's operation, management, and reputation, as stated in
response #2. If the founder CEO engages in unsafe personal behavior, the board of
directors may vote on whether or not the present CEO should be replaced.
Irina Raicu

In 2017, Facebook’s “People Insights” blog published a post titled “What Mends a Broken
Heart on Facebook.” In it, the company’s researchers detailed insights that they had
gathered by examining “how the break-up moment influenced the online behaviors of
people across France, the Netherlands, Poland, the United Arab Emirates and the United
Kingdom who indicated on Facebook that they recently went through a break up.”

One of their findings was that “there could be a gap between the break up itself and the
Facebook post announcing it. During the two weeks before and the two weeks after their
break-up announcement,” they explained users “accepted more than one invitation to an
event 40% more than [during] the 60 days before and 60 days after their announcement

The researchers also noted that “’Healing,’ ‘detox,’ ‘drowning sorrows,’ ‘binge watching’ and
‘suffering’ are just some of the words and phrases that are more pronounced in men’s posts
before they mark themselves ‘Single.’ The same types of words and phrases are more
pronounced in women’s posts on the actual day of their announcement.”

As to what helps people get over a breakup, Facebook researchers wrote that “[g]aining new
experiences… seem to be more therapeutic than buying things.” Under the subhead “What
it means for marketers,” the post then asks, “How can brands be a part of the journey to help
mend people’s broken hearts?” Suggested answers include “Empathize with them” and
“Offer them new experiences.” The post concludes by encouraging potential Facebook
advertising clients: “Tracking signals of intent to travel, experience new things or take up a
new hobby can help you reach this group with a relevant ad at the right time.”

Is it ethical for Facebook to mine its users’ posts for signals that those users are about to
go through a break up? Is it ethical for the company to then help its clients target their ads
based on this research?

No, it is an invasion of privacy when a person or company seeks out information

about an individual without their permission for reasons other than the public good
(criminal investigation, for example). Intentions are not an issue of ethics if such technology
does not actually work other than to suggest some probability. The results are. Facebook
might be sued for wrongly accusing someone of having a mental illness when they don't.
No, it is unethical for the corporation to subsequently use this data to help its clients
target their adverts.

While the goal of mining users' posts to discover whether they're ready to break up is
to help, I don't see how targeting them with ads based on their information can improve the
problem. It also does not appear ethical to essentially collect personal information in order
to determine if they would be targeted by advertisements based on their research. Now, if
they accepted when they first created their account and Facebook asked for permission to
use their post to target them with these advertisements, then that's acceptable.

Is what Facebook is doing different from what other companies do?

So, after doing some research, I discovered that Facebook performs an excellent job
with marketing, mobile trends, and user engagement. In 2018, ads alone brought in 11.97
billion dollars. This is because Facebook uses a fraction of its users' data, such as likes,
shares, and comments, to promote the "new trend." Users can also scroll through products
and services to find new customers.

How might Facebook’s actions be perceived through the ethical prisms of utilitarianism,
rights, justice, virtue, and the common good? For more on those perspectives, see
“Thinking ethically.”

Facebook's actions in gathering information on users in order to offer targeted

adverts to those users are not unethical and should not be seen as such. If you buy a new
PC, for example, Facebook will promote more ads for other PC brands and parts, which is
such an exciting thing to look forward to and discover what's new.Now, I understand if you
don't want your data to be used to be bombarded with ads, but at the end of the day, if
that's something you don't want to happen, don't have a Facebook or computer for that
matter, because your data is always being used for google searches and other purposes.
 Through utilitarian ethical prisms as beneficial and desirable because they would
result in a large group of people's satisfaction They require these new experiences to heal
their shattered heart, according to Facebook. In terms of rights, I believe Facebook is
infringing on these people's privacy by assessing their relationship status, as well as other
aspects such as phrases they've noticed are utilized, and then using this information for their
own benefit. Facebook claims to be trying to assist these people by analyzing the words they
use and their status in order to offer these adverts to them via the ethical prisms of justice
and virtue. Facebook, on the other hand, is doing a good deed while also benefitting from it,
according to its vision of the common good.