Footes & Co is a privately run boutique asset management firm, founded by John Footes in the 19th century. Ownership of the firm has been passed down through the Footes family ever since. The firm has a set of core values, established by John Footes, which are: Respect; Integrity; Customer Care; and Honesty (RICH). All staff members, including the family members who sit on the Board and within the management team, are expected to abide by these values by ‘walking the walk’ and not just ‘talking the talk’.
Mike Footes, the son of John Footes III (the current chairman of Footes & Co), pursued a career outside the firm after graduating from university. Determined to forge his own path, he joined a rival asset management firm, causing a rift in the family. During his 30s, the tension became so bad that he did not speak to his father for a number of years, until the rift was healed when Mike married and had two children. Step by step, the relationship improved, and John was impressed when Mike told him about his professional successes, rising through the ranks at the firm in which he worked, finally being promoted to managing director. Mike’s mother, Janine, often tried to press him for further details about his job, but Mike remained evasive. Janine was not concerned, believing Mike was being careful to avoid another fall out with his father.
In 2016, the Footes & Co chief executive Sheryl Brogues (not a member of the Footes family) decided to stand down from her post. To John’s delight, Mike informed him that he would be interested in the role and John used his influence as chairman of the Board to fast-track Mike’s application. While there were other applicants, it was seen as a foregone conclusion that Mike would step into the role. Richard Footes, head of HR, did his best to remain impartial during the recruitment process (which was difficult, as Mike is his cousin), but in the end he determined that Mike’s impressive résumé and excellent interview marked him apart from the other candidates, and he was appointed as the new chief executive of Footes & Co.
Mike had been particularly aggressive in a meeting, and had shouted at a junior staff member who had disagreed with him
The family was delighted to have Mike join the firm, and a couple of years passed without incident. Mike was known for his strong leadership style, and he would often dominate meetings, yet this was just seen as his way of achieving results. However, in 2018 a complaint was made against Mike by a fellow member of the management team, saying that Mike had been particularly aggressive in a meeting, and that he had shouted at a junior staff member who had disagreed with him. The complaint centred around the fact that this behaviour was not in keeping with the firm’s RICH values (particularly the value of Respect). An investigation was launched, and Mike extended an apology, which was accepted, and the matter was considered closed. However, over the next few months, staff morale at the firm sharply declined, and a couple of key staff members (not part of the Footes family) decided to leave.
In her exit interview, Lisa, formerly head of compliance, mentioned to Richard Footes, head of HR, that Mike was a bully. She said he was known for his coarse language and aggressive behaviour, and that these traits were not consistent with the firm’s RICH values. However, she also mentioned that staff were scared to raise concerns, especially if they were not members of the Footes family. Lisa asked Richard to keep their conversation confidential, saying: “I only told you this because I trust you. I’m sorry for putting you in a difficult position, as I would not want to be in your shoes.”
Richard recognises that he is in a difficult position. He is part of the Footes family and doesn’t want to upset the relationship between Mike and his father that was only restored a few years ago. However, if Mike’s behaviour is really that bad, it has the potential to affect the business and, with it, the family.
What should Richard do?
- Conduct further investigation, including reviewing the references received from Mike’s previous employer and seeking witness statements from members of staff who might be willing to go on record about Mike’s behaviour.
- Report his concerns to the chairman (John Footes III, Mike’s father), which is consistent with the guidance set out in the firm’s whistleblowing policy.
- Do as Lisa asked and keep the information confidential. He cannot take further action until more information comes to light about Mike, and exposing Lisa would be a breach of the trust she has placed in him.
- Call Mike in to answer allegations of poor conduct that goes against the RICH values.