On Friday, December 10th, the board of directors for Better.com announced that CEO Vishal Garg would be “taking time off effective immediately” after the controversial way he laid off 900 employees over Zoom.
On the face of it, this sounds like good news. A person in power is being held accountable for disrespecting employees in a, particularly vulnerable moment. That’s precisely what should happen. But when you take a second read of how the board of directors handled this situation, the outlook isn’t as clear-cut.
The board didn’t fire Garg. They sent him on what amounts to a time-out. Additionally, they delayed the close of their $7.7 billion reverse merger. This smells like an attempt at damage control. Theoretically, the board could use the CEO’s time out to set up a more humane employee experience. Or they might wait for the news cycle to move to a different target and then bring Garg back and proceed with the status quo. If you read through the various news articles about Vishal Garg, he has a hostile behaviour pattern dating back to at least 2019. He should have been fired when he threatened to burn his business partner alive.
This time, the only thing that’s different is the increased public scrutiny due to the reverse merger.
Follow the Money
I was talking about this story with someone close to me, and the person said, “How does a guy like that keep his job?” To that, I say, follow the money. People like Garg get results by burning through people. If your overriding goal is year-over-year profits or shareholder value, then it’s hard to make the case to fire the Gargs of the world. They deliver the results demanded of them.
In business school, you learn a lot about incentives. Are you incentivizing people correctly? How should you set up incentives to reach business goals without driving people to unethical or criminal behaviour? Most companies say that they value a respectful work environment. But if a leader’s performance isn’t tied (at least partially) to delivering a healthy work culture, then those are empty words with no teeth behind them.
It shouldn’t take public scrutiny around a 7.7 billion dollar deal to oust a toxic boss. Robbing employees of their dignity should come with the same sort of consequences as misappropriating investor funds. You can make the argument that the consequences should be more severe. You can give back the money.
Business leaders (and investors) need to do better. Otherwise, the abuse will never stop.