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Dealing with Products and Managers that Fail: Corporate Cyanide and Executive Suicide
When bosses tell the truth
Is it always correct to be honest in business? The theory of business ethics and public relations would suggest that it is: consumers prefer to be told the truth, even when it may be distasteful. But there are some celebrated cases where firms have suffered as a result of comments made by their senior executives. A list can be compiled of names of people who may wish that they'd had the good sense to keep quiet about their views of their companies' own products or services. Here's a brief summary of a few:
- Gerald Ratner who was deposed as chief executive of his family's jewellery business in 1992 after describing a sherry decanter sold by the firm as 'total crap'. The comment, made at an Institute of Directors event at the Royal Albert Hall, cost Ratner more than his job; approximately £500 million was wiped from the company's value; profits of £121 million were turned into a £122 million loss; and Ratner's was re-named as Signet.
- Freddie Shepherd and his fellow Newcastle United FC director, Douglas Hall, were lured into a Marbella brothel by undercover reporters, who recorded conversations where the two were heard labelling Geordie women as 'dogs' and Alan Shearer as the 'Mary Poppins of football'. After a short period away from the club to let the 'dust settle', Shepherd returned to the chairmanship of NUFC, where he received a basic annual salary in 2004 (including bonuses and pension allowances) of £668,920.
- Barclays Bank's chief executive, Matt Barrett, admitted to a House of Commons' Treasury select committee that he did not use a Barclaycard as it was too expensive. He also said that he advises his children to avoid using credit cards to accumulate debt.
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