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How To Survive An Employer Investigation

Posted: Thursday, 10 May 2018 @ 14:04

As has been widely reported Sir Martin Sorrell, Chief Executive of WPP has resigned following a company investigation into alleged financial misconduct.

While Sir Martin has let it be known that he is not happy to be resigning, on the face of it he has secured a good(possibly great) outcome compared to other CEOs in such a position facing an investigation of such a kind.

Due to what looks like a clear failure of due diligence by the Board of a FTSE100 company(no, not a rag tag outfit) there is no non compete with Sir Martin's employment contract meaning that he can work for any competitor in the future and while his former employer may bluster,there is not much they can do.

The results of the completed company investigation are not revealed. Airing dirty laundry can be such a bore for a company as any lack of corporate controls are exposed and Sir Martin does not have to address specific and inconvenient allegations.

The timing of the news coming out is all interesting - A Saturday evening so when prospective employers are reading their Sunday newspapers their attention is drawn to the fact that Sir Martin may be available for work.

Getting in Sundays newspapers is not the best day to bury bad news so Sir Martin (presumably) wanted as many people to know as possible about the terms of his resignation.

And rather than be deemed dismissed, Sir Martin has resigned(retired) continue to receive payment from his employer.

Presumably being a savvy PR operator Sir Martin got the news of his resignation out in the public domain as he may want to do bit of consultancy now that the full time job has disappeared.​

It is my understanding that he instructed three law firms to help him.

I think that between them the three they have done an excellent job.

On the one hand, the Company has got rid of their senior employee which when a company starts an investigation is usually what they want and do actually achieve.(whether that is done legally is another matter)

A thorough investigation often achieves the object of dismissal.  

But the employee(The Senior Executive) has secured a worthy and still relatively dignified exit despite facing the resources and the motivation of the Company.

If you think this is fanciful just consider the number of senior executives that you know who have been shown the door and are left to fight after the event.    

It is worth reflecting that many CEOs are potentially in such a position and over time my firm has represented a series of CEOs facing the threat of dismissal.

Fundamentally there are a series of dos and do nots in such a situation that CEOs must do to protect their position.

These include:

Do Not Act In Denial - When facing an investigation the CEO can act in denial and assume the problem will go away. The secret is to be totally aware of the threat to your livelihood and to deal in worst case scenarios. The fact Sir Martin instructed three different law firms may indicate desperation but shows that he was fully aware of the threat facing him and in my view represents a key reason why he got such a good outcome. He was fully aware of the threat facing him and did not wish the problem away.  

Manage Your Emotions - Fear and anger will lurk between the surface of any CEO put in such a position. Sometimes the goal of the Board is to provoke the CEO to say or do something to give additional ammunition to justify dismissal. In this case you REALLY do want to follow legal advice and shut up. For the time being go through your lawyer.    

If You Can, Get Time Out - Once you are subject to a company investigation things are not the same and as a lawyer I communicate the new reality. The new reality is that no matter what the Board is saying to you the likelihood is that you will be dismissed possibly with no pay if the employer can get away with it if is this way inclined. Given this consider seeing your GP and getting signed off. One of the benefits of this is that you do not give your employer additional justification for sacking you by remaining in the job if you are not suspended.    

Welcome To The World Of Negotiation - In brute terms when you are facing a company investigation what you are looking at is solely a negotiation about the terms of your exit. The overriding point of your lawyer is to help you secure the best possible terms of this exit. Nothing more, nothing less. Identify beyond money what is fundamentally important to you and agree a negotiation plan with your lawyer.       

Manage Your Own PR Against The Odds - It is quite clear that Sir Martin did not give up and much thought and work went in/continues to go in to protect his position and reputation despite the difficult position he was in. The lesson. Do not give up fighting for yourself. 

 

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