For the first time in 23 years, CBS may have to consider a future without Leslie Moonves.
Sexual misconduct allegations against CBS Corp.’s chairman and chief executive officer complicate an already messy situation for the broadcaster: Its board will have to investigate Moonves at the same time it’s working with him in a court fight for control of the most-watched U.S. TV network.
An article Friday in the New Yorker by Ronan Farrow accuses Moonves, 68, of harassing six women, including forced touching and kissing during business meetings, in incidents that go back as far as 30 years. The women say they were physically intimidated and that their careers suffered when they refused his advances. The article goes on to describe a culture of harassment at CBS.
“If the claims turn out to have merit, then we would expect that Moonves would almost certainly be forced to step down from the CEO role and the board,’’ Doug Creutz, an analyst with Cowen & Co., wrote in a note.
The long-serving CEO is locked in a battle with National Amusements Inc., led by Shari Redstone, over her desire to recombine the company with Viacom Inc., another family holding. Moonves rejected her wishes and his board tried to dilute National Amusements’ 80 percent voting stake in the company. With Moonves out, a merger becomes more probably, with Viacom Chief Bob Bakish likely presiding over the combined company, Creutz said.
Independent members of CBS’s board have pledged an investigation into the CEO’s behavior. The company retained the law firm Proskauer Rose LLP to look into its news division following allegations against anchor Charlie Rose, but hasn’t said who will handle the new investigation.
CBS will report its financial results next week, and hold its annual shareholder meeting Aug. 10.
Moonves, in the article, acknowledged there were times decades ago when he may have made some women uncomfortable by making advances, but said he never used his position to harm anyone’s career.
“They need to do a thorough review, even if it’s in the distant past,” said Jeffrey Sonnenfeld, an expert on CEOs and leadership who teaches at the Yale School of Management. “He was still at CBS then. If there’s been any continuing misconduct, a second level has to be done. It casts a shadow on him in this ‘MeToo era.’ That’s the world we live in.”
Redstone said through a spokeswoman Friday that she hopes the investigation into sexual misconduct will be “thorough, open and transparent.” She also took issue with CBS for citing her dispute with the company in a statement about the New Yorker allegations.
Many powerful men in media and entertainment have lost their jobs over the past year over allegations of sexual misconduct, including movie mogul Harvey Weinstein, Pixar animation boss John Lasseter and Rose. The latter hosted a morning show for CBS, and his behavior is one of the topics covered in Farrow’s piece.
Moonves has been a singular presence at CBS for decades. A former actor, he took over the network in 1995 and became head of the parent company in 2006. Many of CBS’s top executives have worked alongside him for at least a decade, and some, including the head of programming, followed Moonves to CBS from his prior job running Warner Bros. television.
Moonves is known as one of the best show pickers in Hollywood. CBS has been the most-watched network in the U.S. for most of the past decade, relying on a broad lineup of comedies, procedural shows like “CSI’’ and live sports to successfully navigate a turbulent era in the media business.
The board that will look into the new allegations includes many who have served as directors of the media company for more than a decade. All but three — Shari Redstone, David Andelman and Robert Klieger — backed the effort to dilute the Redstone family’s voting control. A trial is set for October in Delaware Chancery Court.
While a distraction for the board, the sexual misconduct allegations are unlikely to be a factor in the Delaware court case, said Larry Hamermesh, a Widener University law professor who is an expert in Delaware’s corporate statutes.
Shares of CBS fell 6.1 percent to $54.01 Friday in New York. The company is scheduled to report second-quarter financial results on Aug. 2 and hold its annual shareholder meeting on Aug. 10.
Executives must be held accountable for creating cultures that permit or enable bad behavior, according to Linda Seabrook, general counsel at the nonprofit Futures Without Violence.
“Workplace cultures that routinely sideline, talk over, disrespect or objectify women are the types of organizations where this type of behavior goes unchecked,” she said.
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