Dear Abi, Help! My new CEO wants me to ignore due processes for which I am accountable and has threatened me. What should I do?

Dear Abi,

Help! My new CEO wants me to ignore due processes for which I am accountable and has threatened me. What should I do?

I am an executive director responsible for the Supply Chain - Contracts & Procurement of a small company which has been reasonably successful and has had good governance processes and controls. Recently, a new CEO was appointed. Initially I was excited; she has a great background and would bring new dynamism and ideas to our company. At a first board meeting, when we were discussing some problems relating to supply of spare parts, the new CEO made suggestions for new suppliers. Over the last few weeks, I had my team conduct our normal supplier assessment and found that all the CEOs suggested suppliers failed to meet our due diligence requirements (insufficient capital, recently incorporated companies or very little experience, lack of track record in parts required, unreliable financial performance records amongst other issues).  At the next board meeting, the CEO asked about how the suppliers were doing and I explained that we were not able to work with them. I was surprised that she seemed upset, but I explained we had found new suppliers who met our standards to resolve the spare parts issue. I thought that was the end of it. 

Days later she invited me to a breakfast meeting; I thought it was a ‘get to know you.’ Instead, as soon as I arrived at the restaurant, she didn’t let me sit down. Instead, she lambasted me for refusing to list her suppliers. She has told me that if I go against her commands again, I will regret it. It was horrible. I do not know what to do. The Chair supported her recruitment (as did all directors) and I fear that whistleblowing will just land me in trouble. Do I start making plans to leave?

I look forward to your advice,

Sincerely,

Joke A

Dear Joke A,

Sorry to hear about your problems. Thankfully, the problems we face can be surmounted.

You mention that your company “has had good governance processes and controls”.  I assume therefore that these processes and controls are in writing and that you may even have a contracts committee?  If not, you might want to suggest this at a later time.

Since you have these internal processes and controls and you are following them, it will be difficult for anyone to accuse you of incompetence, corruption or fraud. If you find any gaps in the processes or controls, you should flag these as soon as possible.  

However, your most urgent action is to seek a meeting with the CEO in order to explain the reason why her suggested suppliers did not make the cut and the reasons behind the company processes and controls.  She needs to understand (in a non-condescending manner) that as the CEO, she is the upholder of company policy and that you need her support to ensure that these are followed without compromise as this is the only way that (i) you will have recourse against a supplier should it fail to deliver as promised and (ii) the company continues to enjoy the success it has so far gained. 

If this fails and she still insists that the company work with certain unqualified suppliers, then you will know for sure that she does not have the company’s interest as a priority and that you should escalate this matter urgently.  If there is a whistle blowing policy/procedure, then follow this step by step.  If not, escalate to the Chairman or a non executive director by way of memo, letter or email. 

I hope that this helps, but if you still have difficulty, please let me know and we can try to find another way.  Whatever the case, do not compromise company position and remember that as a Director of the company you have a fiduciary responsibility towards the company and can be held personally liable for your acts and/or omissions. 

If in the end it means that you have to resign, then do so stating the reasons for your resignation in writing.  I do not think that the Board will allow it to get to this stage, provided that they are made aware of the problem.  Your duty is to ensure that they do know and can act. 

Sincerely,

Abi