Examining CEO Integrity and Ethics

Feb 21, 2025

Case on Executive Integrity

Overview

This case study discusses the ethical challenges faced by three CEOs whose leadership was questioned due to personal integrity issues. The cases highlight the implications of CEOs' personal behavior on their companies and the ethical dilemmas faced by boards in managing such situations.

Case Studies

Mozilla

  • CEO: Brendan Eich
  • Issue: Personal support of Proposition 8 (Defense of Marriage Act)
  • Details:
    • Eich was a co-founder of Mozilla, committed to promoting openness and innovation on the web.
    • His political stance on defining marriage as a union between one man and one woman was known by the board before his appointment.
    • After backlash from employees and the public due to perceived value misalignment with Mozilla's inclusive values, Eich resigned as CEO.

American Apparel

  • CEO: Dov Charney
  • Issue: Sexual misconduct and misuse of company funds
  • Details:
    • Charney was known for using sexually provocative marketing strategies.
    • Engaged in controversial and inappropriate personal behavior.
    • Removed as chairman and dismissed as CEO due to violations of sexual harassment policy and financial misconduct.
    • Post ousting, company governance was destabilized, leading to a restructuring involving hedge fund intervention.

Snapchat

  • CEO: Evan Spiegel
  • Issue: Past misogynistic behavior and drug use
  • Details:
    • Emails from Spiegel's college days highlighted inappropriate behavior.
    • Despite backlash, Spiegel issued an apology, and the incident did not affect his position as CEO.
    • Led Snapchat to become a publicly traded company in 2017.

Questions for Consideration

  • Ethical Issues:
    • What ethical issues arise in these scenarios?
    • How does a CEO's personal behavior affect investor and shareholder sentiment?
    • Importance of alignment between personal values and company mission.
    • Board responsibilities in addressing risky personal behaviors in leadership, especially with founding CEOs.

Additional Resources

  • Articles and frameworks on leadership ethics and decision-making.
  • Teaching notes and interviews on ethical leadership.

Contact Information

  • Markkula Center for Applied Ethics at Santa Clara University
  • Address: 500 El Camino Real, Santa Clara, CA 95053
  • Phone: 408-554-5319

This case was originally written in 2014 and revised in July 2018.