From Mark Zuckerberg to Harvey Weinstein, founder CEOs can become too big to fail

Stephen Vines says companies that have been built and thrived on the force of their founders’ personalities struggle when they become a liability and have to be shown the door

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Facebook CEO Mark Zuckerberg (centre) arrives at a meeting with US Senator Bill Nelson of the Senate Committee on Commerce, Science, and Transportation on Capitol Hill in Washington on April 9. Zuckerberg has been called to testify before a few Congressional committees this week on the users data Facebook has shared with political operatives. Photo: Getty Images

Published: 2:15pm, 11 Apr 2018Updated: 10:30pm, 11 Apr 2018

What to do when the person who founded a company has done something to bring his creation into disrepute, especially when this individual personifies the company’s image?

This is the question facing British-based WPP, the world’s largest advertising company, after the board asked an independent law firm to investigate alleged wrongdoing by its chief executive Sir Martin Sorrell. The nature of the allegations has not been disclosed, but Sir Martin has “unreservedly” denied any wrongdoing.

Unlike many large corporations run by charismatic chief executives, the head of WPP controls no more than 2 per cent of the equity. Sir Martin has frequently stated that the board can sack him at any time as there are no contractual obstacles to prevent this; he may now regard the pride he has taken in this state of affairs to be an act of hubris.

What cannot be denied is that WPP would not be the company it is today without him. The same could be said of many companies founded by strong personalities and dominated by them.

Sir Martin Sorrell has frequently stated that the board can sack him at any time as there are no contractual obstacles to prevent this. Photo: CNBC