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Common examples of CEO misconduct 

On Behalf of | May 16, 2024 | Investigations & Regulatory Compliance

The Chief Executive Officer (CEO) is the face of a company. Every action they take, positive or negative, has a knock-on effect on the business. 

Over the years, there have been several cases of high-profile CEOs facing allegations of serious misconduct. These types of accusations can not only damage the reputation of a company but can result in both civil and criminal legal cases. 

What are some of the most common examples of CEO misconduct

Dishonesty 

CEOs have a fiduciary duty. What this means is that in their capacity as the face of the company, they must act in the best interests of the business. CEOs should not purposely take actions that put the company at risk. Dishonesty is one form of behavior that can place the company at risk. For example, if a CEO falsified financial records, then this could not only damage the company’s reputation, but criminal charges could be lodged. Dishonesty is a key element of fraud, and any form of fraudulent conduct from a CEO is unlawful. 

Poor treatment of subordinates 

All businesses must have a code of conduct in the palace. This document should be written and available to all team members. One important thing to remember is that the code of conduct should not only apply to employees but to higher-level management and even the CEO. 

Over 20% of misconduct from CEOs has a sexual element to it. In terms of sexual harassment, the rules of the company must apply to the CEO as well as all other staff.

Questionable use of company funds 

A CEO is entitled to be paid for the work they do, but they cannot abuse company funds. Again, this falls back to the fiduciary duties that a CEO has. CEOs cannot self-deal (profit personally at the expense of others in the company). Misuse of company funds can cause reputational damage to the company. In some cases, it may even be illegal.

Legal compliance is vital in any company. If you are facing allegations of a criminal nature, then it is essential to have the right guidance behind you.