A leader in trouble – should they stay or should they go?

Doug Baird, the CEO of New Street Consulting, suggests what leaders should consider if they find themselves in an ethical dilemma

CREDIT: This is an edited version of an article that originally appeared on Management Today

Does the failure to follow COVID rules warrant the resignation of a senior leader? Earlier this year we had contrasting examples in Credit Suisse’s chairman Antonio Horta-Osorio (who resigned) and prime minister Boris Johnson (who is currently refusing to step aside). 

After a lapse in judgement, how do senior leaders decide whether their situation is salvageable or beyond repair and how do they take the next steps to protect their reputations and manage professional relationships, whether they are moving on or remaining in their role? Here are three things to consider. 

Timing

The timing of a crisis heavily influences its impact and any consequent requirement for resignation. There’s been growing public outrage about senior and public figures breaking COVID rules during the pandemic and this reached a peak in the run up to Horta-Osorio’s resignation.

This is not to say that the Credit Suisse chairman would have continued in his role if there hadn’t been such a well-reported outcry about lockdown breaches, but the severity of his failings to follow the rules took on new meaning given the context. There’s growing unrest among people who’ve changed how they live and work to tackle the pandemic’ – they are increasingly unforgiving of those who choose to ignore – or think they are above – the rules.

This becomes especially problematic for leaders who are aiming to inspire and influence others; indeed, this appears to have been acknowledged in Mr Horta-Osorio’s departing statement, which references that his personal actions have led to difficulties and compromised his ability to represent the bank internally and externally.

When considering a resignation, leaders must have the awareness, and self-awareness, to fully read the situation and understand its gravitas. This involves a full appreciation of not just what wrongdoings have fuelled the crisis, but how the issues are being interpreted by the people who matter, such as employees, customers and investors. 

In the prime minister’s case it’s interesting that he didn’t pay any real heed to the Number 10 lockdown party allegations when they broke; perhaps his awareness of the significance of the problem was lacking, because he had ridden out similar issues before Christmas. This leads us nicely on to the next point.

Everything in context

It would seem that the context of Johnson’s lockdown breaches clouded his awareness and judgement. His leadership style has often been quite forthright and decisive; these aspects were lacking in this instance, which cost him valuable time in addressing the problem and made it more difficult for him to reassert and rebuild his leadership credentials. It remains to be seen how this story will play out for Johnson; at the time of writing the police investigations have not yet run their course.

In contrast, Horta-Osorio seemed to have fully-grasped what had gone before at Credit Suisse and was aware of how this context made his position all the more untenable. (His predecessor left the bank in 2020 after it was revealed he had spied on senior leaders and the bank has also suffered huge losses in connection with collapsed hedge fund firm Greensill.)

The outgoing chairman would probably have been acutely aware of how his COVID rule-breaking would have undermined his credibility during such a pivotal time for the bank. He, perhaps, realised that fighting for his position was futile when the bank needed responsible and accountable leadership.

Always be a leader first

To successfully resign during a crisis, leaders must maintain one of the key attributes of leadership; considering the interests of the parties they lead and represent.

This can be particularly challenging, as it’s natural for the departing individual to be concerned about their own standing and future. However, if they can acknowledge they are acting in the interests of others by leaving their role, and are doing so with sincerity and decency, they will be better able to manage the impact of the situation on their reputation.

Taking such an approach can invite less scepticism about the departing leader and can also avoid prolonging negativity and speculation about their exit. Recognising the interests of others can also help remind key stakeholders of the resigning leader’s more positive attributes – beyond the issues associated with them stepping down – and help minimise the prospect of them becoming a pariah.

Although making the decision to resign during a crisis can be tough – especially when most leaders will instinctively opt for fight over flight – it can prove more beneficial in the long-term to graciously accept defeat and focus on moving forwards.