Six chief executive officers have stepped down or been fired since the mutual fund scandal began last September. However, the way many have gone has been a puzzling, agonizing and laborious process, raising accountability questions that start at the top and seep down to the bottom, Reuters reports.
When Mark Whiston of Janus stepped down last week, it was after months of questions questions whether he had knowledge of market timing and was in on e-mails that spelled out these arrangements. But instead of leaving immediately when the questions arose, Whiston saw it in his companys best interest not to leave and give shareholders a reason to panic.
Janus has suffered $12.6 billion in outflows since September, the second-highest number among the scandal-tarnished firms. According to Jeff Keil, a vice president with Lipper, shareholder panic is not always at the top of the CEOs fear meter. Rather, they are more concerned about their own fate.
"First and foremost is that if they do formally make a statement about guilt, then they face litigation," Keil told Reuters. "I think thats whats driving a lot of the behavior." He added that because trust and perception are so important, the companies "rightfully are guarded about the actions and statements they make."
Larry Lasser of Putnam, John Ballen of MFS and Richard Strong of Strong Capital also hung on until the end, probably thinking that leaving right away would be perceived as an admission of guilt and initiate a quick and steady outflow.