Why Transparency Is Tricky

I’ve posed the question before on this blog: Who is responsible for holding mean men accountable? For exposing their wrongdoing when necessary?

There may be hundreds of reputable news outlets covering business, but they often don’t do as much as they should. It doesn’t help that mean men are, almost by definition, charmers. Combine money with power with connections with influence, and you begin to see why the mainstream media seems to “miss” certain truths that the general public has always sensed. And while the media catches up or reorganizes its priorities, we need greater transparency inside our largest corporations and organizations.

Just a few decades ago, it was unthinkable that subordinates would evaluate a leader. We aren’t talking as far back as Mad Men even—we are talking the era of Friends. The 360-degree evaluation didn’t become popular in US organizations until the 1990s. Now, in Fortune 500 companies and top nonprofit organizations, it’s the norm.

Executive coaching also used to be a rarity, and when it came into full bloom—also in the nineties—it carried as much stigma as seeing a shrink did back in my parents’ day. A CEO that needed a coach was a CEO who couldn’t manage his or her problems. Today, a large percentage of people are turning to executive coaches, and surveys show that having an experienced professional coach in their corner helps good leaders achieve more.

Let me emphasize that last statement: experienced coaches help good CEOs and leaders, not those who are “successful” psychopaths with highly complex narcissistic issues.

I should know: I’ve been in the executive coaching business for two decades, and I’ve worked with young, unpolished entrepreneurs who simply needed a little sanding around the edges, and I’ve also worked with egomaniacal mean men. Only in the rarest of the latter cases did we make significant, sustainable headway.

Tools exist for making any one of us more accountable, but forcing people to use these tools—even if they themselves claim they are up for change—can be challenging. Not many of us can easily open up a part of ourselves and allow others to sit in judgment. Entertaining the idea of change is one thing—being forced to do things differently based on feedback others are giving you can be anathema, particularly to entrepreneurial men who thrive on control.

Most leaders today recognize that if they want to be considered “modern,” they’d better step into the coaching and self-evaluating ball game. That said, how do we advise employees who have information about unethical or illegal behavior in the higher levels on how to proceed without fear? Transparency for transparency’s sake does no good unless each and every employee feels they can offer the truest feedback and criticism. But in organizations led my mean men, it’s a sure route to HR for the exit interview.

It’s clear we need to also address how to better advise CEOs and boards about handling reports of unsavory or illegal misconduct. We’ve seen in the news what happens when powerful people get tossed a damaging report only to then juggle it like a hand grenade—take Dov Charney and the American Apparel case for example. Talk about a story with excessive shrapnel.

So what took everybody so long?

One person—whether he or she is reporting misconduct or is the board member taking note of it—can make a difference. In all my years of coaching CEOs and advising boards, I’ve found it exceedingly rare that any serious concern finally being reported has not already long been on the minds of other employees and executives. All it takes is one person to get up the nerve to act, and the situation, if handled properly, can then move quickly and directly into action against the perpetrator.

Too many boards wrongly assume that the absence of complaints means that all is well. I am often called in on these cases after employees reached their limits and reported to external parties. Boards must invite transparency before it’s too late. They must reach out, ask questions, and encourage dialogue. In the age of the web, sure, powerful founders and CEOs can spin stories and create impressive branding to match their narcissism. But the web is also gaining power as a mouthpiece for employees. Glassdoor is only one of many websites that invites people to anonymously share the pros and cons of where they work and whom they work for. Leaders can snub sites like Glassdoor.com if reviews are horrific and may even go on a witch hunt in search of the employee who posted about the SoB CEO, but that typically leads nowhere. And despite what I said in the opening of this post about media sellouts, more and more online news outlets are making it their business to highlight controversial leaders.

Responsibility for creating a system that encourages constructive self-criticism belongs to those at the top. Responsibility for maintaining the integrity and usefulness of this system lies with every employee at every level. Firms that don’t allow for a transparent culture risk great peril.

Credibility and reputation are lost quickly in the Internet era. No firm is too big to fail. Once the story of Dov Charney’s firing broke, pundits came out of the woodwork, asking: Why didn’t the board do this years ago when they had more than sufficient evidence for cause? But why should a board failing to act surprise us? Charney was no fool when he put the American Apparel board together—he recruited members who had little experience running a major public company and was therefore able to keep them at bay. Board members have traditionally been left in the dark, and mean men are calculating—this does not surprise us.

The message that boards and mean men cannot help but hear right now is this: if you don’t fully embrace a transparent culture, the Internet will eventually out you. Some of your media ties will do the dance with you, but stories leak. Stories about assholes leak faster. The Internet has more muscle than you do, and you will only get away with it—whatever it is—for so long.

As of early June 2015, in response to Charney’s case against them for defamation, American Apparel delivered a restraining order against him, prompting one reporter to refer to him as the bad ex-boyfriend who just isn’t taking the hint and another to ask: “Does anyone know if American Apparel even makes clothes anymore?”