Episode Transcript
[00:00:00] Foreign.
[00:00:11] Hi everyone, I'm Bill Coffin, and welcome to this special episode of the Epicast.
[00:00:17] If you had asked me back in January what the big ENC news theme of the year might be, I would have guessed regulatory turmoil or artificial intelligence.
[00:00:26] After all, the second Trump administration was about to begin, and AI was making its big shift from hype to practice. And while both of those were indeed major themes for ethics and compliance professionals, they didn't hold a candle, at least in terms of capturing the attentions of folks in and around the ENC space to the number of CEOs who lost their jobs in 2025 for some form of misconduct.
[00:00:49] The CEOs of Kroger, Primark, Kohl's, Astronomer, and Nestle all lost their jobs for improper personal conduct, such as carrying on undisclosed workplace romances with direct reports or vendors that violated their organization's codes of conduct. The CEO of Castle resigned over accusations of mismanaging over $530 million in venture capital, Oakview's CEO went down for bid rigging, and Beneficent's CEO faces up to 20 years for looting his own company, and First Brand's former CEO faces lawsuits and a DOJ investigation over that company's spectacular collapse.
[00:01:26] All of these, however, point to some important takeaways that are bigger than any one of these stories.
[00:01:32] First, it's worth noting that in many of these stories, especially with Kohl's and Nestle, that the organization's ethical infrastructure did its job. Speak up systems engaged internal and external investigations, did their thing, and ultimately the the boards made the calls that they had to make.
[00:01:48] While individual executives may have failed to uphold strong ethical standards, the organizational programs designed to ensure ethical business practice took action and held accountable those at the highest level of the organization.
[00:02:02] There's nothing to be gained by pointing and laughing at these episodes, but there is something to be said for acknowledging that while it would have been better if the systems never had to work at all, three cheers for those that did and thus protected the business. We don't focus enough on that outcome, but we should.
[00:02:17] After all, it is the work of ENC teams everywhere to ensure that the whole is stronger than the sum of its parts, especially when it comes to putting into daily practice the mission, vision and values to which every employee agrees.
[00:02:31] Second, it's worth noting that 2025 experienced near record levels of CEO churn, especially in the first half of the year, when more than 1200 CEOs left their posts, according to data from the executive placement firm Challenger, Gray and Christmas. And while stories like the ones I mentioned grabbed all the headlines. Situations like that are very much a minority. Harvard Business Review's reporting on this subject noted that the rate of forced CEO exits actually declined in 2025 from 16.3% of the total down to 15.2%, the first such decline since 2020.
[00:03:06] And data from the Conference Board shows that while 15% of the S&P 500's CEO departures in 2025 were among its lowest quartile of performers, the turnover rate elsewhere in the 500 was as high as 12%. So it's not exactly a matter of only misconduct or underperformance. CEOs are leading for all kinds of reasons, including but not limited to macroeconomic factors, regulatory uncertainty, technological changes, stakeholder expectations and swiftly evolving skill set demands. In 2025, large cap companies that announced that their CEO was departing had been terminated or were stepping down included bp, Unilever, Rio Tinto, Duke Energy, Carmax, Ross Stores, Kohl's, as mentioned before, Barrick Gold, Ulta Beauty, Expediters, Williams Companies, Lululemon, Dexcom, Etsy and Driven Brands. The current annual revenue for that cohort of named companies is about 469 billion dol billion.
[00:04:04] If that were a country's GDP, it would be the world's 36th largest economy, somewhere between Denmark and Malaysia. That is a huge amount of value Forced to reckon with the challenge of changing leadership. And that doesn't even include other heavyweights that also lost their CEO this year, such as Walmart, Berkshire Hathaway, Kroger, Target, Coca Cola, Continental, Kraft, Heinz and Six Flags. And while it may be difficult to sympathize with the very heavy burden that CEOs carry, especially given the often unflattering pay ratios as such executives have relative to their employees. Organizations need steady leadership, especially if they seek to build and advance a strong culture of ethics that is purpose driven, rooted integrity, and has the collective muscle memory to do the right thing, even when it's not the easy or obvious course of action.
[00:04:53] The more an organization churns its leadership, the more the org's collective culture takes a step backward.
[00:04:59] In 2026, we'll probably continue to see plenty more CEOs leave their posts for reasons both honest and hair raising.
[00:05:06] But the key to remember is this.
[00:05:09] CEOs may come and go, but excellent ENC programs are built to last. They have to be. They must be something greater than any one person who designed them or led them. They must be something that expresses the collective values of an entire company and they must be something that reflects the ethical identity of everyone in the room, regardless of how long they have been there or where they sit on the org chart. Ethical leadership might often start with the CEO, but it is by no means confined there. If anything, the most important ethical leadership isn't in the biggest office. It's in the meeting rooms, the hallways, the production floors, the loading areas, the remote locations, and the business travel destinations. It's in the small moments, the unexpected tests, the unforeseen uncertainties.
[00:05:53] So as we look to a new year, let us hope that we will see fewer stories of CEOs caught on kiss cams, looting their own companies and in the middle of internecine lawsuits. Instead, let us see if not stories of virtuous executive behavior, then something far more meaningful. Stories of the companies they lead, filled with people doing things right by doing the right thing. That is the truest mark of a successful company. Everything else is just a detail.
[00:06:21] For those of you who missed our deeper dives on many of the CEO stories mentioned in this video, check out the show notes for links to those episodes and for a ton of free in depth reports, guidance documents, articles, videos and more to help you reach ever higher levels of excellence in ethics and compliance, visit the Ethisphere Resource center at ethisphere.com resources thanks for joining us. We hope you enjoyed the show. For new episodes each week, be sure to subscribe to us on YouTube, Apple Podcasts, and Spotify. Also, if you haven't Already, please follow ETHASphere on LinkedIn as well to help us spread the word about best practices and in business integrity.
[00:06:57] That's all for now, but until next time, remember, strong ethics is good business.
