Would a board of directors retain Biden as CEO? Or Trump?

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On Feb. 7, special counsel Robert Hur released his report on whether President Joe Biden should be prosecuted for retaining classified documents following the end of President Barack Obama’s second term in 2016. Although Hur concluded that a prosecution was not warranted for innocent actions occurring roughly eight years ago or earlier, particularly in light of Biden’s complete cooperation with the investigation, the special prosecutor included various gratuitous remarks about the president’s ability to recall certain years-old events.

Hur’s comments about Biden’s memory have, predictably, precipitated harsh criticisms and commentary from Republican candidates for president, as well as current senators and representatives. One such critic was Sen. Thom Tillis on North Carolina, who stated: “I’m not one who gets personal. But when it’s so profound, that you have a prosecutor take note of it, I think it’s something to pay attention to.” Tillis then commented: “I’m not trying to take a cheap shot. … Let’s say that was the CEO of a company. What would their board of directors be asking for this evening?”

Ignoring Tillis’s self-justifying assertions that he doesn’t “get personal” or take “cheap shots,” he poses an interesting question regarding the likely actions of a corporate board of directors. How would a board of directors react to the memory concerns Hur articulated?

I’ve spent more than 40 years as an attorney working with America’s largest corporations regarding employment issues, including issues involving C-suite executives. I’ve also presented “Continuing Legal Education” courses on how companies and their boards respond to problematic conduct by CEOs and other top executives. In my experience, boards are primarily focused on the results generated by the executive leadership (revenue, profits, stock price and general corporate stability). Applying those standards to President Biden, he has a fabulous story to tell about his first three years in office, both domestically and internationally (notwithstanding the challenges associated with two wars — one initiated by Russia’s dictator, and one initiated by Hamas).

There are ways, however, in which a CEO’s tenure can come to an abrupt end. These typically involve issues relating to character, integrity, legal compliance, and the ability to work productively and effectively with the rest of the executive team. Collectively, these characteristics can be summed up in two words — leadership abilities. In situations involving these contexts, the board’s role is to protect the corporation — ensuring its financial success for various constituencies, maintaining and enhancing its corporate image, and positioning the company for future success and stability.

Applying those standards to the leading Republican candidate for president would result in a failing grade and an immediate discharge. There are too many examples to fit here, but let me offer just a few.

On the character side, you have an individual who had a sexual encounter with a porn star then paid her $100,000 to cover it up. A board would fire a CEO who engaged in this conduct in a heartbeat. You have an individual who boasted publicly about grabbing women’s genitals. A board would fire a CEO who made such comments in a millisecond. The Republican candidate is an individual who was found liable for sexually assaulting a woman in a department store dressing room then defaming the victim on multiple occasions, resulting in nearly $90 million in civil liability. A corporate board would immediately terminate this person’s employment. The Republican candidate publicly mocked a disabled reporter. This type of behavior also would result in a swift termination by a board. A CEO who engaged in just one of these actions, let alone all of them, constituting violations of law and causing immeasurable damage to the corporation’s reputation, would be discharged before he could blink.

On the integrity side, the Republican candidate is a person who misled banking institutions and misrepresented the value of his real estate holdings and other assets in an effort to obtain favorable loan rates and tax benefits. This resulted in a lawsuit by the state of New York that seems likely to result in a very substantial financial penalty (in excess of $200 million), coupled with injunctive relief that may prohibit the candidate from doing business in New York. A CEO who engaged in comparable conduct wouldn’t last a minute in corporate America.

Imagine a CEO who stole the most sensitive corporate trade secrets and other confidential materials and then engaged in a monthslong effort to obstruct the company’s attempt to reclaim the purloined corporate documents. A CEO like that would be fired then sued by the company. Yet, on a far more egregious and consequential scale, this is precisely the conduct in which the Republican candidate engaged with respect to our nation’s most sensitive documents.

Consider how a board would react to an individual who could not work effectively with the management team he selected and who frequently denigrated its members’ abilities in public? Exacerbating this hypothetical situation, consider a board’s reaction to significant numbers of these top executives characterizing the CEO as dimwitted, incompetent and utterly lacking in judgment. A board would have no tolerance for this damaging conduct and would quickly part ways with this type of pass-the-buck corporate “leader.” Yet, this example largely mirrors how the Republican candidate interacted (and continues to interact) with many of his Cabinet appointees, as well as their post-employment assessments of him.

Imagine a CEO who engaged in corporate infighting to prevent his replacement as the corporation’s chief executive and who initiated 62 separate lawsuits (all of which he lost) to prevent his ouster and retain power. A board would fire this individual “for cause,” would terminate all of his post-employment benefits and would likely sue him to “claw back” compensation and benefits already provided.

Last, consider a CEO who was a pathological liar — who lied unabashedly and unapologetically about events, people, historical information, his own prior statements, etc., despite the fact that his falsehoods could be disproved easily. How long would a board of directors tolerate this conduct? It would cut this CEO loose as quickly as possible, before he caused permanent and irreparable damage to the company.

So, why aren’t Sen. Tillis and the entire Republican leadership in the Senate and House applying this “how-would-a-board-react” standard to the individual leading their party? How much damage, how much harm, how much instability and chaos are they willing to accept, not just to a company, but to our country?

Roy Ginsburg, of Minneapolis, is an attorney.