OUSTING THE BOSS – NAVIGATING THE LEGAL LABYRINTH
The removal of a company’s most senior figure is anomalous in the business world, given that most ‘firing’ happens from the top-down in any hierarchical organisation. However, high-profile cases where senior figures have been forced out of their positions due to allegations of impropriety have brought into the spotlight this highly precarious corporate scenario that throws up a plethora of legal considerations.
Examples include Harvey Weinstein who was fired from his position as chief executive and resigned in October 2017 from the board of the independent film company he co-founded.
Likewise, in June 2017, Uber boss Travis Kalanick resigned from his position as chief executive following criticism that he fostered a male-dominated, sexist culture and bent the rules. Following a major internal investigation, several senior executives at Uber also lost their job. Bosses do sometimes return though: Steve Jobs was fired from Apple in a 1985 power struggle with John Sculley, but was reinstated in 1997. Removing senior directors is a legal maze that must be navigated carefully, and it is worth examining in detail the various yardsticks and potential pitfalls any company would have to consider. Given that senior individuals usually have an equity stake in the business, shareholder issues also need to be considered.
Apr-Jun 2018 issue