5 Things Every Executive Should Know About Serious Misconduct

Accusations of serious misconduct can have a severe impact on the career, finances and reputation of an executive. 

“Serious misconduct” is a term that covers a broad range of behaviour and actions. It can refer to fraud, theft, embezzlement or harassment. It can refer to dishonesty or abusing a position of trust or breaking the law. It can refer to damaging incompetence. It can also be used for many other things. 

Any time serious misconduct has been alleged it requires careful strategic management. An unfair allegation of misconduct should not be allowed to stand: it is important to resist unjustified accusations of wrongdoing. However, this is a situation where being right is not always enough. Executives and managers need to be cautious and proactive to prevent long term (and short term) impacts on their careers. A good plan and discipline are crucial for dealing with these types of challenges. To that end, here is some critical information on allegations of serious misconduct of which all executives and managers should be aware: 

It is not sufficient evidence simply to say that misconduct has occurred. Rumours and hearsay are not enough. The truth and available evidence are what’s key. What actually happened and what can be proven are far more important than what the employer or a third-party alleges has happened. 

Making a mistake does not automatically indicate serious misconduct; it depends on the severity and consequences and foreseeability of the mistake, among many other factors. Likewise, not every wrongful action can be classified as serious misconduct. These are akin to the differences between breaking the speed limit and killing someone while driving under the influence: there is a world of difference. Just as not all inappropriate behaviour is the same as serious misconduct, the consequences for such behaviour varies accordingly. 

Additionally, it is important to keep in mind that performance issues are almost never serious misconduct. These are completely different concepts that should not be confused with one another. 

When an executive or manager is found guilty of serious misconduct the consequences are severe. Often, these consequences include no longer being entitled to severance pay. However, the consequences of serious misconduct do vary on a case-by-case basis so it is always best to get advice from an expert and verify rather than to assume. 

Serious misconduct is a serious charge but it is not something that should always be contested. Where there is provable guilt, the sanctions imposed are entirely fair and there are no sufficiently mitigating factors, then it is often futile to oppose such an allegation. In such situations there is a minute chance at success and therefore there is little to be gained. Nonetheless, every case should be looked at on a case-by-case basis. There have been a number of cases where an executive assumed it was hopeless where when an expert lawyer looked at it they saw a lot of room for movement. Take appropriate steps and proper care of yourself by getting advice. You will be better off, even if it’s only to learn where you stand. 

This is a specific area of law where honesty is key. If you aren’t honest, it actually hampers your lawyer from helping you. Very few situations are not fixable. However, as we tell our clients again and again: it is vital to share all information with your advisor in order to achieve optimal results. We can’t fix what we don’t know about, and getting sand-bagged can overturn strategies part way through proceedings and kill your case. While it is critical to share all information with your lawyer, it is especially important to remit any information that could be damaging or negative. This will enable your lawyer to plan a strategy to offset potential problems right from the start.