Lately, we’ve seen organizations in the news that have failed to prepare for an uncomfortable scenario: when the threat comes from within. It’s unsettling to imagine a business unraveling due to the actions of an insider (whether intentional or not). But it happens, and few are feeling that reality more acutely right now than Kohl’s.
The clothing retailer recently ousted its newly appointed CEO after an internal investigation revealed he had engaged in undisclosed vendor deals with a former girlfriend. In a clear violation of Kohl’s ethics policy, the exec failed to disclose these ties when he joined the company a scant four months before. Already dealing with years of sluggish sales and executive turnover, Kohl’s acted swiftly to remove him, which was, of course, the right thing to do. But the damage had already been done. The controversy has further eroded confidence in the company’s internal oversight, triggered a board resignation, and contributed to a noticeable dip in stock performance.
This isn’t just about the ousted CEO. Yes, Mr. Buchanan is ultimately responsible for failing to disclose the relationship. But this was a systemic failure – one that overlooked both tangible warning signs (did he enable these kinds of relationships?) and intangible ones (a willingness to conceal an ethical breach, which speaks to character). Responsibility extends to the recruiting firm, the vetting committee, and the board. If thorough due diligence wasn’t done, that’s its own operational failure.
We talk often about the need for clear risk evaluation and proactive crisis strategy. Personnel risk is no exception – and it starts with the very first conversation about hiring, even at the CEO level.
Here are a few thought starters you can discuss at your next team meeting to help your leaders and team see whether your business is ready to handle a crisis:
Discussion Questions:
- What would be your first action if this happened to your organization?
- How do you think speed of response plays into how a business should manage a crisis?
- What would you do to restore stakeholder trust and loyalty?
Kith facilitates crisis preparedness workshops that will help your company attain the clarity, trust, and speed you need to respond confidently – no dithering! – to any crisis. We’d be happy to have a conversation about how we can help your company be ready to chart an effective course to reputation protection.
Looking for more fresh insights? Crisis of the Month is a no-fluff Substack that breaks down real-world crises and what they teach us about leadership, communication, and damage control. Whether you’re in comms, ops, or just crisis-curious, this is your monthly guide to what went wrong — and how to do it better. Sign up today!
