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Marketplace Morning Report

Why is CBS keeping CEO Les Moonves on board?

Tracey Samuelson Jul 31, 2018
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Mike Windle/Getty Images for Venice Family Clinic

Leslie Moonves, the CEO of CBS, will continue leading the company while it investigates sexual misconduct claims against him.

The board of CBS met on Monday, releasing a statement shortly after that it was “in the process of selecting outside counsel to conduct an independent investigation,” but that “no other action was taken on this matter.”   

The meeting follows a New Yorker article released last week, in which six women accuse Moonves of sexually harassing them in incidents spanning from the late 1980s to the early 2000s. 

New York Times media reporter Ed Lee has been following this story and joined us now to discuss the rationale behind some of the company’s decisions. Below is an edited transcript of the interview. 

CBS took immediate action against Charlie Rose and NBC acted quickly to remove Matt Lauer when allegations surfaced against them. Why is this different?

Les Moonves is a pretty powerful figure who runs the entire network, as well as other parts of CBS Corporation. Showtime, for example, is part of that. Simon & Schuster, the book publisher, is also part of that. So taking a pretty quick action to sort of push someone aside would have pretty dramatic effects. It would ripple through the entire business, so I think the board clearly is acting as cautiously as they possibly can. The comparisons are apt, but they’re also different given the scope of what Les Moonves controls. And that’s probably a factor, but it is striking that they haven’t taken any action.

CBS’ board has known about these allegations for a while — it’s not like they didn’t know this wasn’t coming. 

That’s fair to say. The CBS board and CBS company have been aware of a number of newsrooms — including the New York Times — that had been chasing a story about Les Moonves and alleged behavior over the decades. So they were aware for months, if not longer. At the same time, the context is that some of these stories hadn’t really landed or hadn’t landed when they thought that they would. So from the board’s point of view, they’re probably thinking, well, let’s not pre-empt these things. Let’s wait to see what actually comes about, and maybe nothing comes about. And of course, when the New Yorker story landed, a lot of things kicked into gear. But again, they hadn’t taken any action. Of course, they could still take action over time. In a few days, a week, a few months — however long it takes for them to kind of take a deeper long at the allegations, as well as hiring a law firm. They’re going to hire a law firm to take a look at that. Their minds could change on action to take at that point, but within three days, four days of the revelations, they’re probably thinking let’s just take our time. 

And Les Moonves has options here too, right? Are there any precedents for CEOs stepping down ahead of an investigation like this?

There actually was a relatively recent example. Martin Sorrell, who was the CEO of WPP — which is the largest ad company in the world — he stepped down when allegations came to light about his behavior. And the board was actually going to investigate him as well in terms of these allegations, but he stepped aside ahead of that. So what it did is that allowed him to cash out his stock options and retire from the company without any of these allegations being corroborated by a board investigation. And the company basically considered this a close case. So he sort of was able to walk away without any further harm or any further implications. I think the company itself didn’t want to really dig into it and they were probably grateful that he voluntarily stepped aside. That is a model for potentially Les Moonves. It doesn’t seem like he’s quite going that route. But that’s the closest comparison in terms of the head of a major company like that. 

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