A man-made disaster triggered the worst of last year’s Forbes CEO screwups list, when BP chief Tony Hayward committed a series of public gaffes in the wake of the April 2010 Gulf oil spill, and then resigned the following October. This year, forces of nature created the backdrop for the boss behavior we deem the worst: Masataka Shimizu, head of the Tokyo Electric Power Co., known as Tepco, largely disappeared from public view after the devastating March 11 earthquake and tsunami set off the worst radiation release since Chernobyl. Subsequently, reports surfaced that senior Tepco engineers had known for years that five of the company’s ten nuclear reactors in Fukushima prefecture had a dangerous design flaw. But the company failed to make upgrades, dooming the reactors to a series of meltdowns and explosions when the 45-foot tsunami hit. Following the disaster, Shimizu made few public appearances, checking himself into a hospital for a week. He resigned in May.
To put together our list, we consulted two professors at Kellogg School of Management, Daniel Diermeier and Harry Kraemer; Yale School of Management professor Jeffrey Sonnenfeld; a list provided by Sydney Finkelstein, who teaches management at the Tuck School of Business at Dartmouth; and Richard Levick, who runs Levick Strategic Communications, a crisis communications firm in Washington, D.C.
ValueWalk's Raul Panganiban interviews William Burckart, The Investment Integration Project’s President and COO, and discuss his recent book that he co-authored, “21st Century Investing: Redirecting Financial Strategies to Drive System Change”. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors.
Finkelstein calls William Weldon, the CEO of Johnson & Johnson, the “Tony Hayward of 2011,” for presiding over a two-year string of product recalls which Finkelstein maintains are “a direct result of Weldon’s emphasis on cost-cutting.” International consumer and environmental groups have been pressing J&J to remove two potentially cancer-causing chemicals from baby products, including Johnson’s Baby Shampoo. Though the chemicals have been eliminated from products in several other countries, including the U.K and South Africa, J&J has yet to alter its baby products in the U.S., saying it would reduce or remove the chemicals over the next two years. “[Weldon] seems to talk the talk, but what can he make actionable?” asks Finkelstein.
Rupert Murdoch also makes the list, for his regrettable handling of the phone-hacking scandal at his News of the World British tabloid. Finkelstein calls Murdoch’s style “management by hubris.” After the scandal broke last summer, Murdoch dragged his feet on accepting responsibility for employees who hired a private investigator to hack into the voicemail of missing 13-year-old Milly Dowler. The investigator deleted messages, giving the murdered girl’s family false hope that she was alive and checking messages.