Leaders

4 of the biggest CEO scandals of 2016

We look at four CEOs who were rocked by scandals in 2016: Deborah Thomas, John Stumpf, Elmer Funke Kupper and Darren Huston.

By Nicola Heath

CEOs are not immune from adversity. We look at the fate of four chief executives who were beset by scandal in 2016.

Deborah Thomas Ardent Leisure CEO

1. Deborah Thomas 1. Deborah Thomas

Deborah Thomas became CEO & Managing Director of Ardent Leisure Group in April 2015. Thomas took on the role after 30 years in the publishing industry, including a decade-long stint as Editor-in-Chief of The Australian Women’s Weekly.

The former journalist faced the biggest challenge of her career when in October 2016 four people died in a tragic accident on a ride at Dreamworld, a Gold Coast amusement park owned by Ardent Leisure. Thomas immediately faced criticism for the way Ardent handled the crisis, including a delay in contacting the victims’ families and the ill-timed announcement in the week after the accident detailing Thomas’ bonus, which totalled $843,000 over four years. Thomas donated her entire $167,000 cash bonus to the victims’ families via the Australian Red Cross, acknowledging that errors were made in the response to the tragedy.

Some commentators have questioned whether Thomas deserved the severe criticism, which included death threats, she received. Do “we still judge women in leadership positions more harshly than men particularly when – as all humans do – they stumble and make mistakes?” asks Jane Carowriting for The Age, who believes Thomas’ experience following the Dreamworld tragedy reveals a double standard in the way we treat men and women in positions of leadership.

John Stumpf Wells Fargo CEO

2. John Stumpf 2. John Stumpf

John Stumpf stepped down as CEO of Wells Fargo & Company in October 2016 after it was revealed thousands of unauthorised bank accounts had been opened in customers’ names without their consent.

Stumpf initially tried to blame the misconduct on junior employees, many of whom defended their actions on the basis that the practice was encouraged to meet aggressive sales targets. According to a Bloomberg report, junior staff said “managers told them to do whatever it took to open new accounts, even if customers didn’t ask for them.”

News of multimillion dollar settlement following misconduct allegations led to a U.S. Senate hearing, where Senator Elizabeth Warren accused Stumpf of “gutless leadership”. Wells Fargo was fined nearly A$250 million for opening 2 million fake accounts, and Stumpf agreed to forfeit A$55 million in pay amid calls for his resignation. After nine years as CEO, during which time he guided Wells Fargo through the global financial crisis to become one of the most successful home lenders in America, Stumpf quit on October 12.

Elmer Funke Kupper ASX

3. Elmer Funke Kupper 3. Elmer Funke Kupper

Elmer Funke Kupper resigned from his position as Australian Securities Exchange CEO in March 2016 following an investigation by the Australian Federal Police into an alleged bribery payment made by Tabcorp when Funke Kupper was its CEO. An illegal payment of A$200,000 was allegedly made to the family of the Cambodian prime minister Hun Sen at a time when Tabcorp was trying to secure a gambling licence to operate in Cambodia ahead of the 2010 FIFA world cup.

Funke Kupper, who denied any wrongdoing, said at the time that he resigned in “the interests of good corporate governance and the interests of strict process. I have taken this step so that the company is able to build its future.”

The ex-Tabcorp chief received a payout of nearly A$3 million following his resignation. He has since been replaced as ASX CEO by Dominic Stevens.

Darren Huston Priceline Group

4. Darren Huston 4. Darren Huston

Darren Huston stepped down as CEO of the Priceline Group in April 2016 following revelations that he had engaged in a relationship with an employee.

While the employee was not under Huston’s direct supervision, an investigation by the board found that his actions violated the company’s code of conduct. A statement released by the board said the Canadian CEO “had engaged in activities inconsistent with the board’s expectations for executive conduct, which Mr. Huston acknowledged and for which he expressed regret.” Huston also resigned as CEO of Booking.com, also owned by The Priceline Group.

Thumbs up/down

Thumbs up: One company pays working mothers an extra $10,000 a year

One company pays working mothers an extra $10k a year

A Queensland medical research institute shows how to support working mothers, while two Australian businesses are caught out exploiting migrant workers.
A Queensland medical research institute shows how to support working mothers, while two Australian businesses are caught out exploiting migrant workers.

Focus

The HP Way: When a progressive corporate culture is part of the strategy

Culture vs Strategy: The HP Way

It may be fashionable to put culture above strategy in the leadership pecking order, but in the real world one supports the other.
It may be fashionable to put culture above strategy in the leadership pecking order, but in the real world one supports the other.

Legal

How to resolve a workplace bullying claim

How to resolve a workplace bullying claim

Employers may suffer palpitations at the thought of claims of bullying in the workplace, but the Fair Work Commission takes a pragmatic approach to resolving claims.
Employers may suffer palpitations at the thought of claims of bullying in the workplace, but the Fair Work Commission takes a pragmatic approach to resolving claims.

Diversity

Why is inclusive leadership the next big thing?

Inclusive leadership: the next big thing

Diversity must be inclusive if it has a chance of delivering benefits to businesses.
Diversity must be inclusive if it has a chance of delivering benefits to businesses.

Gender

Do we need quotas to improve gender equality in the workplace?

Do we need gender quotas in Australia?

The number of women in leadership positions in Australia remains low. Overseas, targets have helped improve gender equality in the workplace. Would they work here?
The number of women in leadership positions in Australia remains low. Overseas, targets have helped improve gender equality in the workplace. Would they work here?

Trends

Take a closer look at the top 4 workplace trends of 2017

The top 4 workplace trends of 2017

Say hello to the workplace of 2017: performance reviews and permanent jobs are out, and the gig economy and family violence leave are in.
Say hello to the workplace of 2017: performance reviews and permanent jobs are out, and the gig economy and family violence leave are in.

Jane Caro

Gender diversity means nothing without inclusion

Jane Caro: Diversity needs inclusion

Having a quota for women and minorities isn’t inclusion if you treat them as outsiders.
Having a quota for women and minorities isn’t inclusion if you treat them as outsiders.

Features

7 ways to future-proof the Australian workforce

7 ways to future-proof the Australian workforce

As the digital revolution rolls on, leaders now and in the future face great uncertainty but also unprecedented opportunities. So how should we prepare the Australian workforce for what happens next?
As the digital revolution rolls on, leaders now and in the future face great uncertainty but also unprecedented opportunities. So how should we prepare the Australian workforce for what happens next?