Often when those in the media describe a shakeup in a company, they report that the company's CEO has "stepped down." More often than not, this means that the CEO was forced to resign, perhaps to save the company the negative press of a scandal.
When no scandal in a company is obvious, people may assume that the executive lost his or her job because the company saw a financial downturn under that executive's watch. However, enough CEOs have managed to hold on to their jobs through plummeting stock prices and earnings in the red to shed doubt on that theory.
Loss of confidence
If you were fired without cause, it probably wasn't a decision that was made overnight. The board of directors of your company may have discussed your role in the corporation at several meetings.
They may have even taken a vote to determine if the majority of the board members or shareholders had confidence that you could take the business in the direction in which they wanted it to go. In other words, it may not necessarily be that the company lost money, but that they didn't feel you would be able to prevent further loss in the future.
The secret reason for your termination
While the CEO firings that garner the most attention are the ones with salacious undercurrents - for example sexual misconduct, fraud or other corruption - a confidential survey of board members from businesses across the country revealed the underlying reasons why many CEOs lose their jobs. If the board or stockholders of your company gave no cause for your termination, they may have seen evidence of one of these issues:
- Resistance to change initiatives
- Indifference toward customers or clients
- Tolerance of underachieving employees
- Denial of or refusal to recognize trouble in the company
- Inability or unwillingness to bring visions to reality
The conclusion of the study was that CEOs who are willing to take action inspire confidence in board members and stockholders even more than CEOs who earn money for the company.
However, if you can't see yourself in any of the reasons listed above, you have every right to ask the board members for an explanation, although you probably shouldn't expect too much disclosure from them.
In California, there are many possible reasons why a board can legally fire a CEO. They may even fire you for no reason at all. However, the law protects you from being fired in a few, very specific circumstances. Some examples include:
- Race or color
If you believe that the board of directors of your company fired you because you fit into any of the categories protected by federal law, you may have cause to file a wrongful termination claim. An attorney who has successful experience with workplace discrimination cases will investigate your situation and help you determine the best course of action.