Protecting the Corporate Reputation

An important fiduciary obligation of the board is to protect the reputation of the organization, as a significant enterprise asset. In that regard, the new academic study, “Scoundrels in the C-Suite,” from the Stanford Graduate School of Business. The Stanford study examines actions that corporate boards take in response to executive behavior that, while ‘not illegal’, remains questionable or otherwise inconsistent with the interests of the company or its shareholders. Such questionable behavior includes, but is not limited to, conduct such as making controversial public statements, having relations with an employee or contractor, or developing a reputation for overbearing or verbally abusive behavior. The study also summarizes why responding to such conduct “matters.”