What is the role of the structural components of corporate governance? Do they act to rein in or facilitate a charismatic corporate CEO? What is the role of a Board of Directors with such a person? Are there different obligations between public and private companies? What does the dramatic downfall of Steve Wynn over the past week tell us about the answers to these questions and many other.
In this episode, Matt Kelly and I take a deep dive into the events which led to the resignation of Steve Wynn as the CEO and Chairman of Wynn Casinos for sexual harassment and misconduct. We consider how quickly the scandal escalated after it was initially reported by the Wall Street Journal and the response (or lack thereof) by the Board of Directors to Wynn’s conduct which had been an open secret for almost 20 years. We review what structural inputs a company should have in place when it has a true charismatic leader. We consider the role of the Board of Directors in light of the recent Wells Fargo penalty levied by the Federal Reserve to limit growth and require the Wells Fargo Board to refocus its efforts on more robust corporate risk management.
What do the Wynn Casinos and Wells Fargo Boards have in common? They both failed to do their jobs.Click to tweet
For more on the Wynn scandal and corporate governance, see Matt’s blog post So Much Wynning You Can’t Stand It
For more on the Federal Reserve’s penalty on Wells Fargo and the Board of Director’s need for a compliance profession on the Board, see Tom’s blog post, Wells Fargo, Put a Compliance Professional on Your Board