From Wynn Resorts to Lululemon, 2018 was the year of #MeToo mea culpa
Former Wynn Resorts' CEO Steve Wynn at the Venetian Las Vegas on September 30, 2014. Ethan Miller | Getty Images

The #MeToo movement that started 2018 forced companies across the U.S. to deal publicly with the historically private issue of sexual harassment. Harvey Weinstein's alleged transgressions struck a tone with the public and social media became a powerful microphone to amplify his and others alleged wrongdoings. As consumers and investors paid more attention, companies had to quickly learn the delicate art of admitting and apologizing on a public stage. "Companies cared before about these issues, but now they really care because the reputational exposure can be so big and hard to quantify," said Lauren Casazza, a litigation partner at law firm Kirkland & Ellis, who advises companies on sensitive matters, including workplace misconduct. Casazza declined to discuss company specifics.

The founder problem

Cleaning house

Cleaning house is easier when the founder isn't the party accused. Last year, many companies took pains to explicitly separate themselves from an implicated executive. Lululemon Athletica announced in February its CEO Laurent Potdevin was resigning from the retailer after he "fell short of ... standards of conduct." One of the reasons behind Potdevin's departure was a multi-year relationship with a female designer, CNBC later reported. Shares of Lululemon fell more than 3 percent after the market closed on the day Potdevin's exit was announced, but the stock has since risen roughly 60 percent. Lululemon announced Potdevin's replacement, Sephora executive Calvin McDonald, in July. The exodus from Nike was a slower drip. Its widely presumed next CEO, Nike Brand President Trevor Edwards, resigned suddenly in March after complaints about workplace conduct. By May, 10 senior managers had left the company. Nike's shares, though, have risen 10 percent since Edwards' resignation. Some companies were more indirect, acting simultaneously vocally and coyly about the reason for a CEO's departure. "There are all sorts of things going on in the background that reporters don't see that make communications during a crisis challenging, for example when/what to disclose about a #MeToo investigation that may still be ongoing and not complete," Casazza said. When Barnes & Noble fired Chief Executive Demos Parneros in July without severance, it was initially mum on the cause, only saying it was not "due to any disagreement with the company regarding its financial reporting, policies or practices or any potential fraud relating thereto." When Parneros later sued Barnes & Noble for defamation, it issued a separate, more explicit statement: "The lawsuit filed by Demos Parneros is nothing but an attempt to extort money from the Company by a CEO who was terminated for sexual harassment, bullying behavior and other violations of company policies after being in the role for approximately one year." Shares of the bookseller, which is facing its own challenges, were initially unchanged by Parneros' departure. Under his tenure, shares shed 32 percent. Barnes & Noble and Nike didn't respond to an email seeking comment. Lululemon and Papa John's declined to comment.

Board oversight