BUSINESS ETHICS

Final project

Submitted by:
Priyanka Adwani & Sanjana Chimnani

CASE ON EXECUTIVE INTEGRITY

Following are three instances of CEOs whose initiative of their firm has been brought into
question on the issues of their personal integrity and behavior. Those issues include their
personal political positions and contributions, personal behavior and relationships with
employees and illegal and inappropriate behavior in the college.

Mozilla
“Mozilla had been based on the mission to encourage openness, innovation and opportunity on
the Internet. Consistently, over half a billion clients and thousands of contributors from over 80
countries are brought together to propel the reason sketched out in the Mozilla Manifesto. The
web is a vital public resource and Mozilla exists to protect it. That is what is done at Mozilla, our
only point of focus.” –From Mozilla’s blog Q and A regarding the resignation of Brendan Eich
Brendan Eich is the co-founder of Mozilla, an association set up as a not-for-profit organization,
which is enthusiastic about its purpose. Eich’s past political help for the Defense of Marriage
Act, which before 2015 explained marriage on the government level as the union between one
man and one woman that was well familiar with the board and employees before his appointment
for CEO. What wasn’t known was the manner by which employees and non-members would
respond to anexpected difference between Eich’s own personal values and the company’s values.

Despite posting about his responsibility about preceding the organization’s help of the LGBTQ+
community through making various policies and advantages and also the apologies for “causing
pain,” the issue did not settle down. Eich made his decision to resign from the post of CEO and
rejected the board’s offer to take any other C-level position in the company.

American Apparel
American Apparel, the clothing industry is about “passion, innovation and ethical practices.”
From their website under “About Us”

Dov Charnry the founder of American Apparel always acknowledged about his personal
behavior because it is strange. His company’s strategy and marketing is using sex to sell clothes
from the day one, and he has never been apologized about that, he say and his is his own worst
enemy.
For example: 10 years ago, “charney was in interview with Claudine a reporter of Jane
magazine, Charney during his interview masturbated with her consent while he was carrying on
a conversation about his business. He was also engaged in oral sex with an employeein 2006.
American Apparel has started asking employees to sign a form in which it was written that they
know they are coming to work in a sexually charged environment.

Mid 2014, the board of Co-chairmen said, Charney was removed as chairmen by the board with
the following 30-day notice in his contract. Board of the company first gave him choice to resign
if he himself gave up voting rights of his 27 percent share in the company.

At that time, he would have received a four-year, multi-million dollar consulting contract.
Officially removed for violating the company’s sexual harassment policy and misusing company
funds, Charney refused to go quietly, which threw the company’s ownership and governance into
play. Hedge fund Standard General stepped in with a cash infusion for the company following a
loan call by another investment firm after Charney’s ouster. Five of the seven board directors
voluntarily agreed to step down, and Standard General agreed to add three new directors.
Charney stayed on as a strategic consultant but was eventually fired as CEO in December 2014.

Snap chat
Snap chat’s mission statement, “Deletion should be the default.”

At the end of May 2014, CEO Evan Spiegel’s details of sordid emails from Snap chat released to
the media. The trouble thing is, prior to this email being released his college years were only four
years, because he was only 24 in 2014. The e-mails included details about illegal drug use,
underage drinking, and misogynistic behavior, including urinating on one after she passed out
following sex, and harassing women who were overweight. Some emails were about racist also.

Spiegel’s privileged background and luxurious lifestyle had always received plenty of press. He
has begun receiving more press for his bad behavior than his app, after the email released. He
sad I’m ashamed and embarrassed about my idiotic emails during my professional days and I’m
apologizing, I do not have any excuse. I’m sorry I was jerk at that time to have written them, but
they are nothing today to reflect who I am today or my views about women. Spiegel remains
CEO and was responsible for taking the company public in 2017.

Leader Company Issue Outcome

 Brendan Eich Mozilla Personal support of Resignation
Prop 8

Dov Charney American Apparel Sexual relationships Dismissed as CEO in

with employees December of 2014 and
resulting in lawsuits removed as chairman
for charges of prior to his termination
harassment, misuse of
company funds for
personal expenses
Evan Spiegel Snap chat Misogynistic behavior, Still in place
drug use prior to
serving as CEO

Questions:

1. Do you find any ethical issues involved in above three cases? If yes, which
ones? And why?
2. How important is the personal behavior of the CEO to company’s investors
and stakeholders/stockholders?
3. Do people need to like the CEO for the company to be successful?
4. While assessing gaps between the CEO/Leader’s values and the values of
organization he/she is leading, Is mission important?
5. Do boards of director need to consider the risky personal behavior in recruitment of
executives? What actions should the board of directors need to take if the risky personal
behavior is found from the founder CEO of the organization?