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Business News/ Mint-lounge / Features/  Handling a trial by fire

At dinner at a friend’s house, I am taken aside by a very distressed acquaintance. Having joined a multinational corporation a dozen years ago as a young manager, he had been recently promoted as country manager and was building out the company, well in line with the great Indian growth story.

Over the weekend, an international board member had rung him with disturbing news. There had been an internal complaint, alleging fraud in the Indian operations. While the board member iterated his belief in his innocence, as per the whistle-blower policy of the company, a team was flying out from Hong Kong to conduct a formal investigation. In the meanwhile, he could attend office, but it was gently suggested that he not take any major business decisions in the short term. It’s not personal, its process, they said.

Guilty or innocent ? Lack of trust is demotivating.

His first instincts were to resign and walk away before this turned into a trial-by-media. Assuming he was proven innocent, even if he did voluntarily step down, would he have credibility in the marketplace? Would he attract more negative publicity by this? On the other hand, he had invested his entire professional career on building this firm, in this team, this business over 12 years, with honour and integrity. And then there was the economics—his stock options were worth a pile. Above all, he was innocent.

On the one hand, I suggested, think for a moment, as an officer of the company. If the nature of the complaint could affect the company’s credibility or disrupt services to customers, perhaps he could immediately offer to go on a leave or step down till the situation was satisfactorily resolved. Else, contrary to his instincts, I urged him not to hang himself, but to hang in there till they completed the initial fact-finding. However, equally importantly, to protect his own interests, I also advised that he call in his lawyer. He needed to ensure that all his paperwork was in place, that his email trails, and that his version of the sequence of events was clear, lucid, truthful and backed up by facts. While he was very sure of his own governance standards, could he completely rule out the possibility of any bad eggs in his team? Could he assist in fact-finding process? Or was this corporate politics and a likely witch-hunt? I also suggested he reach out to his mentors within the company, and gauge the mood at head office, and possibly mutually agree on an action plan as a responsible leader might do. For example, what should he say if the press called in, or if customers or colleagues asked? And much as he hated it, I advised him to start mentally considering (but perhaps not implementing), a Plan B, in case things didn’t work out.

Eventually, after 10 agonizing days, my troubled friend was cleared of any wrongdoing. They asked him to stay, of course. In keeping with the policy, the whistle-blower was never formally identified, but a head of department did resign.

Notwithstanding my friend’s discomfort, there were a few things that this company did right. The exercise was reasonably well handled, and not many people were even aware of the issue. The process for a formal investigation was well set out. They had a defined, contained timeline within which they ran a quick audit and decided next steps. However, while the officials at the board level by and large behaved with empathy and sensitivity, this was not necessarily true of the audit team, whose body language was more “guilty until proven innocent". They could have had better defined communication norms for all stakeholders—shareholders, employees, customers, media, vendors—during the process. Additional issues that came to mind subsequently—do companies need to respond differently based on the nature of the complaint? How does one manage reputational risks of a possible, but unproven situation? Who needs to know? How do you ensure that affected employees are treated with respect and dignity during the process? Often, guilt or innocence doesn’t even matter. The loss of trust (both ways) or negative publicity is enough reason to break the bond, but this does greatly depend on how the process is managed.

We caught up over a much-needed drink, afterwards. He was relieved and pensive at the same time. He had learned some valuable lessons in the process—of always keeping paperwork up to date, of “reducing to writing" and documenting decision trails better. Of erring on the side of caution, of following due process, and of managing internal communications more effectively and always being prepared. Of the importance of mentors who would help him navigate the global system. Of investing in creating credibility and ensuring face time with key stakeholders. And he did, for the first time, start considering alternatives, just in case.

He commented that he had never quite so deeply reflected over the long-standing debate over the concept of agni-pariksha (trial by fire) in the great Indian epic. The abducted and rescued queen underwent (and survived) the trial to prove her innocence. Even though her king believed in her chastity; he allowed public opinion and the sense of dharma as a leader to supersede his personal belief. She was eventually disowned anyway, and the loyal queen lived her life in exile. Having been “proven" innocent, he mused, if she had not been subsequently disowned, would she—should she—have stayed?

Sonal Agrawal is chief executive, Accord Group, an executive search firm.

Write to Sonal at

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Updated: 12 Dec 2010, 07:36 PM IST
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