Lessons for boards on how unexpected boldness sometimes wins the day
“If in my position I can’t stand up to this kind of extortion, how many people can?”
With those words, written in a Medium blog post last week announcing that he would not give in to extortion by American Media LLC (AMI) and its publication the National Enquirer, Jeff Bezos set off a firestorm, and charted a course that few CEOs or boards have equaled.
What the founder of Amazon, and the richest man in the world, did was show us how the head of a public company could put it all on the line to stand up to bullies. “Courage comes first,” he essentially told us, no matter what the personal or professional cost.
And apparently his prestigious board agreed.
Boards don’t always give founders a pass on morals clauses when they misstep very publicly; missteps that can make executives and companies vulnerable. No matter how rich, how successful, or how innovative they are, corporate leaders are always vulnerable to extortion or blackmail plots if they make a mistake.
They can be ousted by their boards, as we saw with Uber’s Travis Kalanick and Papa John’s John Schnatter, as well as a number of #MeToo perpetrators.
This is what makes Bezos’ handling of AIM’s extortion plot so exceptional and highly unusual. Not only did Bezos not cave – he affirmatively called out his extorters, published their threatening let-ters himself, and made himself more vulnerable than he has probably ever been – in order to escape the jaws of blackmail. And in this way, he made himself and his company even more powerful.
We’re not used to such personal nerve from our leaders – corporate or otherwise – these days. And from Wall Street’s reaction to Bezos’s actions, it seems pretty clear that stockholders and stakeholders are reacting positively.
What can the CEOs and boards of other companies take away from this?
- Success really can make you less vulnerable.
- There may be more tolerance for personal misbehavior today — possibly because of the growing lack of privacy the internet dictates (and reality TV).
- As a culture we are getting tired of bullies and are looking for he-roes.
- Some founders are the exceptions, and given Amazon’s success Bezos is one.
- Sometimes doing the right thing is counterintuitive.
Defining your process beforehand about how the board will handle such a crisis — and other types — is sound governance process. It might be wise to have someone with this expertise on the board already.
When a crisis hits, eventually the board will come under scrutiny as well.
No matter how you perceive Bezos’ own indiscretions, his decision to take the situation public appears to have been the right call.
It’s rare that someone stands up to this type of extortion. And all kinds of travesties are committed because leaders were being blackmailed. Bezos has singlehandedly beat this down.
Indeed, if he can’t do it no one can. Which could start a new line of inquiry in all our boardrooms when facing a tough situation: What would Bezos do?
Davia Temin is the CEO of Temin and Company Inc.