More CEOs are being dismissed from large companies for “ethical lapses” rather than financial performance, according to a new study by PwC’s consulting division.
The shift marks the first time in the 19 years PwC, also known as PricewaterhouseCoopers, has been tracking executive turnover that incidents involving bad behavior rather than poor financial performance was the main cause of leadership turnover among the world’s 2,500 largest public companies.
{mosads}Of the 89 CEOs who departed their roles last year, 39 percent left for reasons related to unethical behavior, the study found. According to PwC, the behavior stemmed from allegations of sexual misconduct or ethical lapses related to fraud, bribery or insider training.
PwC defines ethical lapses as “fraud, bribery, insider trading, environmental disasters, inflated resumes, and sexual indiscretions.”
The study found that companies’ chief executives were being pushed out for poor financial performance around 35 percent of the time.
PwC’s findings come amid a rise in the “Me Too” movement, which has seen a number of powerful men across industries pushed out of leadership following allegations of sexual misconduct.
The study found that corporate boards are beginning to approach such allegations with a “zero-tolerance stance,” driven in part by societal pressures since the beginning of the Me Too movement.
A wave of allegations against disgraced Hollywood producer Harvey Weinstein helped sparked the broader Me Too movement. Women and men in the past year have accused figures including former Sen. Al Franken (D-Minn.), Matt Lauer, Charlie Rose, Louis C.K., Kevin Spacey and other high-profile men of sexual misconduct.