GM cut ties with Teneo after CEO misconduct allegations

General Motors has fired Teneo from its public relations advisor position, deepening the crisis gripping the company after CEO Declan Kelly inappropriately touched women at a fundraising event.

Teneo is scrambling to reassure its multinational clients, high-profile advisors and 1,200 employees after the Financial Times revealed Thursday that Kelly had been removed from the board of nonprofit group Global Citizen and relinquished some of his responsibilities at Teneo after the incident, which occurred on May 2.

But on Friday afternoon, GM cut ties. “After a series of discussions, GM has decided to stop doing business with Teneo,” the automaker told FT.

GM is the first customer to reveal that it has stopped working with Teneo over the allegations, raising concerns about the fallout from a group in which Kelly has been disproportionately important in attracting top executives as customers. Teneo won the GM account relatively recently, and Kelly was an advisor to Mary Barra, its CEO.

Global Citizen organized a celebrity-filled event where, according to three people familiar with the matter, Kelly inappropriately touched a number of women without their consent. It removed Kelly from its board of directors the next day and has since cut ties with Teneo, according to two people familiar with the matter.

Until Financial Times storyInformation about Kelly’s actions and his subsequent agreement to temporarily relinquish some of his duties has not been widely shared within Teneo and has surprised everyone but its most senior staff.

The disclosure also put pressure on private equity group CVC, which in 2019 bought a majority stake in the company for $350 million. The value of the Teneo deal is more than $700 million.

Christopher Stadler, who leads the CVC business in North America and manages the company’s investment in Teneo, is also president of Global Citizen.

According to people briefed on the matter, Stadler was at a Global Citizen event where the alleged misconduct by Kelly occurred. Stadler and CVC declined to comment.

Global Citizen told the Financial Times on Thursday: “On May 3, Global Citizen was notified of the incidents, and on May 3, Declan Kelly was removed from the board.”

Stadler himself has previously faced allegations of inappropriate contact with women. In a 2016 gender discrimination lawsuit from a former CVC employee, he was said to have “grabbed,” “cuddled,” and “fed” female employees. The Anti-Corruption Center denied the allegations and the case was later settled

Teneo, which describes itself as the leading global advisory firm to CEOs, has grown into an influential and well-connected strategy and communications firm since it was founded in 2011 by Kelly and Doug Band, former aide to US President Bill Clinton.

The company’s client list includes profitable servants with Fortune 500 companies including Dow Chemical, General Electric, Coca-Cola and Delta Air Lines. Much of her work for them focuses on reputation issues, and has benefited from a broader trend of companies wanting to portray themselves as responsible social actors.

Other clients contacted by the Financial Times either declined comment or did not respond to requests for comment.

Kelly, a self-styled whisperer CEO capable of helping the world’s largest companies through its reputational crises, apologized to his senior leadership on a conference call Thursday. He also sent a note to the staff saying he took responsibility for his actions.

The memo echoed comments from Kelly’s spokesperson, who told the Financial Times on Thursday that he had been “drunk” at the event and was now “committed to sobriety” and “taking care of ongoing counseling from healthcare professionals”.

On Friday, Teneo held a call to brief its top UK-based advisers – a list that includes former Home Secretary Amber Rudd and former UK Conservative leader William Hague – who had not previously been informed of the alleged misconduct. One of the people who attended said, “There was a call but it was just asking questions and no one had any answers.”

In the United States, the group’s advisors include political figures such as Paul Ryan, the former speaker of the House of Representatives, as well as Andrew Liveris, one-time CEO of Dow Chemical, Ursula Burns, the former head of Xerox, and Jenny. Rometty, former CEO of IBM.

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