A Dangerous Precedent

4/11/14

The recent exit of Mozilla CEO Brendan Eich may set a dangerous precedent for the management of future C-suite executives. In 2008 Eich had given $1000 to a pro-Proposition 8 group promoting that California only recognize marriage as between one man and one woman. Six years later, threatened by LGBT groups with boycotts for their Firefox web browser, Eich was seemingly pressured into resigning the CEO post he had been promoted into only weeks before.

Forgetting the marriage issue itself (think of all the "hot" political issues such as abortion, global warming, etc.), what does this say for (a) the distinction between public and private lives of senior executives and (b) the courage of Boards of Directors?

Regarding (a), Mozilla's actions may have sent a message that senior executives cannot hold private political beliefs or use their personal wealth to support political causes in which they believe. Mr. Eich had made clear that no company policies regarding LGBT employees would change and, if anything, protections would be greater, so the pressure was exerted around his beliefs rather than his behavior as CEO. What will happen if anti-abortion groups begin calling for boycotts of companies whose CEO donated to Planned Parenthood? Clearly, the message sent is that performance as a CEO does not matter if one holds a belief that some find unpopular. And while some of Eich's critics said his beliefs were OK when he was the Chief Technology Officer, but not the CEO, what is to stop future groups from expanding litmus tests to the entire executive team? Freedom of speech without the freedom to speak is no freedom at all.

Regarding (b), certainly BOD's need to think ahead as to how they will handle such controversies in the future. Mozilla's spineless response may have been due to being caught off guard and seeking the immediate path of least resistance. The spokesperson's statement that "Mozilla believes in both freedom of speech and equality..." after pressuring the CEO to resign smacks of an attempt to whitewash a decision that they knew was wrong, but was driven by expediency. Certainly given Mr. Eich's long tenure in the company, his beliefs were known by board members before he was appointed. If they weren't known to the board, they should be fired for negligence. As it is they should be fired for cowardice.

Given the number of hot-button political issues that exist today Boards should begin developing a clearly stated philosophy, policy, and statement regarding the relevance of the personal beliefs of a CEO or other C-Suite executive. Perhaps something along the lines of "America was founded on the principles of free speech, free association, and freedom of religion. Our role as a board is to ensure the sustainability of our business through the effective governance of the corporation. In creating an environment of diversity and tolerance we recognize that the personal political beliefs and actions of our senior executives may differ from ours and from those of certain segments of society. However, unless those beliefs result in actions that directly violate our values or the rights of our employees, we do not consider them relevant to our governance responsibilities." Then the next time an LGBT group protests a CEO's contribution to a pro-traditional-marriage group or an anti-abortion group protests a CEO's contributions to Planned Parenthood, the board will be prepared.