Directors, skeletons in the cupboard, and revolving doors

The case of Brendan Eich, forced to resign as CEO of Mozilla Corporation just 11 days after in the position over a $1,000 donation he made to a campaign against same-sex marriage in 2008 illustrates all-too clearly the extent to which company directors in the age of the social networks can be slaves to their past.

Brendan Eich is without doubt a highly skilled professional; the creator of JavaScript and co-founder of navigator Mozilla, he had the full support of the board of directors that named him, who knew about his donation. Even so, the situation that developed quickly once he had been named made his position impossible and required his resignation.

Should Eich have been forced to stand down? This is a complex issue, and the reality is that opinions count for little. The important thing here is that for whatever reason, and regarding his professional abilities, he continued presence at the company could have created huge problems. Despite his measured public apologies, threats from many on the workforce to resign, along with announced boycotts by users and companies, suggested that this was going to turn into a public relations disaster if he stayed. And all this in a company that still relies on donations and goodwill to a large extent for its survival.

But even before the waters have calmed over the Eich affair, Dropbox announces that it is naming former secretary of state during the first Bush administration Condoleezza Rice to its board. During her term in office, Rice was heavily involved in developing secret programs to put the general population under surveillance, which has prompted outrage in some quarters, and an online “drop-Dropbox” campaign that invites users to boycott the company and use other services if the company doesn’t change its mind. For the moment, the company has defended its decision, arguing that she will help raise the company’s international profile, but if the protest campaign takes off, don’t be surprised if they rectify.

The Rice case also illustrates the close relationships that exist between the worlds of politics and business, the so-called revolving door whereby politicians in a growing number of countries are being appointed to senior positions in large corporations, often producing conflicts of interest.

The growing popularity of the internet means that it works both as a kind of collective memory, as well as being a permanent and readily available source of information about the past of public figures.

At the same time, the internet is also breaking down the barriers to activism and protest campaigns: even until a few years ago, the Rice and Eich affairs would have had a relatively limited reach, dependent on word of mouth; nowadays, news spreads around the planet in a question of minutes via the social networks and specialist news sites, quickly creating a media firestorm.

Today, companies are subject to unprecedented pressure if they make an unpopular decision. The outcome is that if these pressure campaigns are no managed properly they can quickly escalate, producing serious and lasting damage to a company’s image that can cause huge financial losses, meaning lost clients and business.

Will the companies of tomorrow also find themselves under scrutiny or being boycotted when they appoint former politicians to their boards as a way of paying back favors? Given recent events, this is not a possibility that can be ruled out. Above and beyond the schadenfreude that we might be tempted to enjoy when a high flyer we don’t like is brought down to earth with a bump, what we need to be asking ourselves is whether this is good for society.

For senior figures in business and politics, the social networks are the go-to place for explaining certain issues, for making apologies, or for trying to show a more human face, a way of defusing possible threats before they appear. Meanwhile, I am going to include both cases in a course I am preparing for public sector directors. Stay tuned.

(En español, aquí)