Bullying: One of the greatest risks to the organization: the CEO often is the CBO (Chief Bullying Officer), but more and more common are activist shareholders who bully boards and CEOs to force change that can run counter to the sustainability of the enterprise.

• Author: Faas, Andrew
• Position: BOARD DYNAMICS

Rarely a day goes by when there is not a story in the media about abuse of power, inappropriate behavior, and corruption and greed on the part of leadership in every segment of our society worldwide. Whether it is business, industry, government, military, police services, education, law, social services, health care, sports, journalism, media or religion, none have been immune.

Where this occurs in organizations, there almost always exists a culture of bullying and fear.

In my book The Bully's Trap, I assert that, just as boards are responsible for protecting and growing enterprise value for the shareholder, they must also be responsible for ensuring that all other stakeholders are free and safe from bullying, because bullying is one of the greatest risks to the organization.

Volkswagen has suffered a huge loss in its brand and reputation value, which has translated into a huge loss in its enterprise value that could be fatal. Most assume that the emissions scandal is the cause. I argue that the cause is the result of a culture that has condoned and encouraged wrongdoing. Even more problematic is bullying employees to engage in and/or witness the wrongdoings, and threatening severe retaliation against those in a position to expose the situation. It is interesting to note that the scandal was reported following a power play at the board level, which exposed a severely fractured, negatively political and dysfunctional board.

The scandalous frauds and abuses, which have become the norm, usually reveal gaping holes in the checks and balances that should be in place to keep organizations honest, and to safely protect stakeholders. Poor corporate governance has ruined organizations, and threatened economies and governments. This has resulted in calls for board reform.

More and more common are activist shareholders who bully boards and CEOs to force change that often runs counter to the direction, strategy and values of the organization, and may not be in the best interest of other stakeholders and the sustainability of the organization. In what I refer to as the continuum of bullying, most of the bullying starts off at the top and is usually the result of focusing on short-term vs. long-term results. If the board wants to focus on the short term, they usually bully the CEO into compliance, who in turn bullies his or her direct reports, who bully theirs. Most of these bullied bullies, and in turn their targets, become bullies at home. In turn...