Cautionary Tales from Morgan Stanley and the U.S. Olympic Committee

From big corporations to non-profits, from government entities like the U.S. Congress to schools and universities, all types of organizations are firing high-profile men for sexual misconduct. Whether the firings are justified or not is a big question, but either way, one of two crises will inevitably follow.

If the accused man is found to be innocent, the organization has trashed its own reputation and brand, showing itself to be unprincipled and dishonorable. After all, it recklessly almost succeeded in ruining an innocent man’s life. That’s crisis number one.

If, on the other hand, the man is found to be decisively guilty of sexual misconduct, particularly if it was found to have occurred over a prolonged period of time, that’s crisis number two: The firing organization will be investigated for possibly having covered up or ignored reports of the bad behaviors.

Both crises will require careful internal and external crisis communications strategies to defend and protect the organization and reassure employees.

Consider how Morgan Stanley is now responding to the fact that it fired Harold Ford, Jr., allegedly for sexual harassment. Ford aggressively challenged the charges, and after more investigation, Ford claimed Morgan Stanley withdrew is accusations of sexual improprieties. Morgan Stanley said nothing for six weeks since the high-profile firing, but issued this  statement on January 22nd:

The press has reported that Mr. Ford was terminated for sexual misconduct. He was not. We have not received any internal allegations of sexual harassment or misconduct involving him either before or after his separation became public.

The problem now for Morgan Stanley is that even if the firing was justified for other, non-sexual reasons (there are reports alleging Ford abused his expense account) the company never bothered to correct the widespread media stories that Ford was canned for sexual improprieties. Taking away a person’s livelihood is one thing. But standing by and watching that person’s reputation be unfairly destroyed by letting reports of sexual misconduct go unchecked is quite another. Then wait six weeks before issuing a clarifying statement? Ouch. Morgan Stanley’s crisis team will need to do a lot more work before getting this behind them.

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But there’s that other horn on the crisis manager’s dilemma. What if, hypothetically, Morgan Stanley fired Ford, or any other high-profile employee, for proven sexual misconduct? The company’s crisis team and its communications component would still have their hands full. What did the company know, and when did it know it? That’s exactly the situation NBC News now faces in the Matt Lauer case. Even though no one is questioning the legitimacy of Lauer’s firing, people are questioning the legitimacy of the company’s overarching culture where appalling acts of sexual predation apparently could take place over a long period of time.

That’s also the situation that the U.S. Olympic Committee, USA Gymnastics and Michigan State University are facing. These organizations are accused of having ignored multiple complaints about egregious sexual crimes against girls and young women by a physician for the U.S. women’s gymnastics team who was also a sports doctor and professor at MSU. Yes, the doctor was eventually ousted from these organizations and is now serving a life sentence for his crimes. But now it’s reported that these organizations dragged their feet and ignored or minimized multiple warnings.

At the university, for example, police apparently had received more than 100 complaints about the convicted molester long before he was removed, and now there’s a growing drumbeat of demands for MSU president, Lou Anna K. Simon, to resign. Several of the doctor’s victims, some of whom are celebrated Olympic medalists, publicly blame USA Gymnastics and the U.S. Olympic Committee for not protecting them. Some are filing lawsuits against the organizations. Late nights indeed for these organizations’ crisis teams.


So, crisis managers, if your organization fires an alleged sexual harasser, beware. If the firing turns out not to have been based on solid evidence, you’ll have a serious reputational crisis on your hands. On the other hand, if your organization is proven to have acted properly in firing the man because he engaged in sexual misconduct, also beware. Expect that your organization will be severely tested as it’s investigated, by plaintiffs’ lawyers, by social and traditional media, by regulators, customers, employees, etc. The risk is high that your organization will possibly be shown to have willingly tolerated or ignored, or at least will be suspected of having tolerated or ignored, known bad behaviors for business expediency.

So how to prepare for this damned if you do, damned if you don’t dilemma?

You simply have to plan for both competing scenarios.

  • Prepare strategies, messaging and pre-written draft documents covering both crises; keep them at the ready to be quickly tailored to the actual situation.
  • Ensure your crisis communications team is closely coordinated with legal teams and human resources.
  • Test the effectiveness of your plans with simulation exercise

And, above all…

  • Foster a strict culture of ethical behaviors, sexual and otherwise, throughout every corner of your organization.

Only after all these preparations are in place will your organization be ready for whichever side of this crisis coin hits the fan.

RESOURCE – Introduction to Crisis Communications Plans, eLearning Course


David Kalson

David Kalson

David Kalson is an expert in issues and crisis management. He has more than 25 years experience providing strategic communications counsel, on-the-ground assistance and highly targeted media relations and “new media” programs to manage issues and crises as well as reputation enhancement for both profit and not-for-profit organizations. Business sectors he has counseled include energy, food and beverage, financial services, healthcare, consumer products and technology. He has designed and implemented communication / media relations programs, often emphasizing Web-based strategies, to address issues including data security breaches, environmental accidents, product recalls, financial problems, high-profile lawsuits, corporate governance issues, criminal behavior, attacks by opposition groups, government/regulatory challenges, competitive challenges and labor disputes. Companies he has counseled in relation to crisis drills, plans and crisis management include Cargill, Dunkin’ Brands, Cadbury Schweppes, Staples, Entergy, Eli Lilly, Canaport LNG and the American Automobile Association (AAA)