Saturday, September 22, 2018

Let's talk more about CBS

Back when the CBS Board first decided to revolt against its controlling shareholder, Shari Redstone, I posted a collection of immediate thoughts.  My final one was:

[T]here’s a subtext in all of this, and it’s that Shari Redstone in particular is an untutored interloper, interfering in a business that she knows little about having finally managed to wrest control from her ailing – and often-estranged – father….It’s hard not to wonder about something of a gendered undercurrent in this kind of commentary, and that, in turn, taints CBS’s general depiction of Shari Redstone as a gossipy – and they don’t use that word but that is the implication when they allege that Redstone basically is saying mean things about people – busybody in corporate affairs.

In light of what transpired and came to light since then, I’m going to emphasize that point again.  Because there’s even more evidence today that the Board’s hostility to Redstone – and its support of Moonves – was tainted by (what I assume was unconscious) bias.  And now, after an expensive and pointless legal battle, terrible publicity, and a general waste of corporate resources, we have a cautionary tale about how sexism distorts and inhibits business judgment.

[More under the jump]

By now, probably everyone’s aware that Moonves has been forced out of CBS due to numerous, credible allegations of sexual harassment, assault, and retaliation that go back decades.  CBS apparently has a pervasive misogyny problem, fostered by Moonves, with women describing a “boys club” atmosphere in which their complaints were ignored.  One of CBS’s crown jewels, 60 Minutes, has come under particular scrutiny, and its executive producer, Jeff Fager, was fired for bullying and threatening a reporter who was investigating.  In other words, Moonves has a years-long history of belittling and demeaning women, and this attitude apparently pervaded the company.

We also learned from this WSJ article that Redstone had to deal with sexism and doubts about her abilities from her earliest involvement with CBS and Viacom.  Now, I assume that this article was carefully nurtured by Redstone’s PR team, coming as it did in the middle of her battle with Moonves, but still, it reports that, for example, when Viacom and CBS were still one company, Viacom’s then-president questioned whether Shari Redstone’s presence at the company was due to “take-your-daughter-to-work day,” and that her father and National Amusement’s board refused to trust her judgment and nearly lost control of CBS and Viacom as a result.

We learned that in the early days of Redstone’s skirmishes with Moonves, he was oddly condescending towards her.  One conversation, described in the NYT, stands out.  Moonves tried to persuade Redstone to come around to his point of view by complaining that she “liked” Robert Bakish more than him, and that she didn’t “like” Joseph Ianiello.  The phrasing raises red flags and is genuinely creepy; rather than appealing to her as a fellow business person, Moonves tried to knock her off balance personally, and force her into a position where social norms would require that she placate him.

These attitudes toward women apparently made it to the Board.  Leaving aside how they allowed the culture at CBS to flourish, at least part of the reason that Shari Redstone wanted Charles Gifford off the board was because in 2017, in the middle of an argument with Redstone, he grabbed her face and demanded she listen to him – an action that he later excused on the ground that it’s how he gets the attention of his daughters

Before filing its lawsuit challenging Redstone, the Board was apparently aware of the allegations against Moonves but did not take them seriously, assuming that Redstone herself had planted them.  In other words, there was an instinctive distrust of Redstone - and an assumption that she’d resort to gossip and rumor to get her way - and an instinctive faith in Moonves.  Even after the first allegations were made public, board member William Cohen insisted on standing behind Moonves, and director Arnold Kopelson openly stated that “I don’t care if 30 more women come forward and allege this kind of stuff.” 

Ultimately, the Board only turned on Moonves when they discovered that he had been withholding information from them – including that he’d been trying to buy the silence of one victim with a job at CBS. 

The overall picture, then, is one of a board that was inclined to doubt women, whether they were controlling shareholders or actresses or corporate employees, and that led them to put undue faith in an abusive and deceptive CEO, to the ultimate detriment of the company.

It also raises another point, namely, what Valerie Aurora and Leigh Honeywell have called the “Al Capone theory of sexual harassment.”:

So what is the Al Capone theory of sexual harassment? It’s simple: people who engage in sexual harassment or assault are also likely to steal, plagiarize, embezzle, engage in overt racism, or otherwise harm their business. ... Ask around about the person who gets handsy with the receptionist, or makes sex jokes when they get drunk, and you’ll often find out that they also violated the company expense policy, or exaggerated on their résumé, or took credit for a colleague’s project….Organizations that understand the Al Capone theory of sexual harassment have an advantage: they know that reports or rumors of sexual misconduct are a sign they need to investigate for other incidents of misconduct, sexual or otherwise.

Ben Edwards has also posted on sexual harassment as a canary for other compliance failures; but it looks like it may be a while before that lesson is fully internalized, both in the boardroom and in other areas of life.

http://lawprofessors.typepad.com/business_law/2018/09/lets-talk-more-about-cbs.html

Ann Lipton | Permalink

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