The World’s 19 Most Disappointing Leaders
The past year or so has produced an avalanche of bungles, failures, and questionable decisions among CEOs and politicians—many so distinctive or outsize that they merit special acknowledgement.
Don’t Blame Me, I’m Just The Governor Award
Rick Snyder, Governor of Michigan
Snyder and his team sparked national outrage after an attempt at cost-savings left the impoverished city of Flint, Mich. with a lead-tainted water supply that is being blamed for illness and brain damage, especially among its youngest residents. Called to testify before Congress, Snyder, who touted his competence in his gubernatorial campaign, labeled the experience the “most humbling” of his life—then attempted to shift blame. He described it as a “failure of government” and blasted the Environmental Protection Agency for its “dumb and dangerous” rules on allowable amounts of lead in water systems. Also read: Flint Water Crisis Highlights Problems in Emergency Management Laws
The Burned Rubber Prize
Martin Winterkorn, former chairman of Volkswagen
Winterkorn led VW during most of the behavior that led to a disastrous scandal (which is far from over), as company engineers installed software that manipulated emissions on about 11 million diesel vehicles. Winterkorn has asserted ignorance of any wrongdoing. Critics have been skeptical, given that he is known as a micro-manager. Then there’s the fact that the company has acknowledged that, at least in the latter stages, a warning of potential wrongdoing was sent to him. VW was known for a ruthless culture and, under Winterkorn, an ambition to become the world’s largest automaker. The combination proved toxic in the case of its emissions cheating. Also read: Inside Volkswagen’s Diesel Fraud
The Black Box Award
Elizabeth Holmes, founder of Theranos
Once a Silicon Valley wunderkind, Holmes leads a startup that seeks to disrupt health care by offering cheaper and less invasive blood tests. But Theranos’s reputation has wilted under heavy scrutiny. After an investigative report by the Wall Street Journal cast doubt on some of the company’s key claims, Holmes continued to defend Theranos’ testing and methods—all while refusing to allow outside scientific scrutiny or peer review. Meanwhile she was unable to keep one of her company’s two labs in minimally acceptable order, according to findings by federal regulators. They concluded that the lab suffered from five “serious deficiencies,” one of which “posed immediate jeopardy to patient health and safety.” Also read: How Theranos Misled Me
The Shkreli Prize
Martin Shkreli, founder and former CEO of Turing Pharmaceuticals
So striking was Martin Shkreli’s performance in the past year that he is the first person to merit having a category named after himself. Shkreli is way smarter than you are (just ask him). He’s so brilliant that he hatched a strategy to buy cheap drugs, sell them at astronomical mark-ups, proudly embrace a role as the Snidely Whiplash of pharmaceuticals, attract searing national scrutiny to the entire industry and, oh yeah, get himself indicted (he has proclaimed his innocence), and lose his job. It’s all part of his master plan. Only a moron could fail to grasp that. Also read: Martin Shkreli’s 15 Minutes Are Up
I Lost My Strategy Under the Sofa, Special Citation
Marissa Mayer, CEO of Yahoo
Nobody thought Marissa Mayer faced an easy challenge when she signed on to try to revive the fading Web 1.0 icon. But nearly four years into her tenure, the profits continue to sag and the fiascos continue to mount as, to take just one of many examples, she shutters expensive “magazines” that she previously launched and described as central to her strategy. Paying hefty ransoms to keep key employees has made Mayer look desperate. She has alternated between resisting and embracing shareholder activists and zigzagged on whether she should spin off Yahoo’s (YHOO) valuable stake in Alibaba or spin off the bulk of the company’s businesses and leave Yahoo as largely a holding company for the Alibaba stake. Also read: Here’s How Much Marissa Mayer May Make If She Gets Fired
The Leon Trotsky Prize for Reorganization
Tony Hsieh, CEO, Zappos
Hsieh is both a quirky mogul who lives in a trailer with two pet alpacas outside and a leadership guru who previously won plaudits for the zany, free-flowing culture at the online shoe-seller. He has made bold moves, such as a $350 million gamble to transform downtown Las Vegas into a bustling entrepreneurial hub. But Hsieh topped that by radically overturning the order at Zappos. He eliminated all bosses in favor of a self-management model known as holacracy, now aimed at reaching a state of organizational enlightenment known as “teal.” The result: A wave of exits, as 29% of the staff turned over in a single year. The company has yet to fully regain its footing. Read: How a Radical Shift to Self-Management Left Zappos Reeling
The George Costanza Medal for In-Office Frolics
Parker Conrad, former CEO of Zenefits
In its first two years, the employee benefits software company grew at an astonishing pace, reaching more than 1,000 employees and a $4.5 billion valuation. Then things turned: Last year, Zenefits reportedly missed its revenue targets, causing Fidelity Investments to mark down the value of its shares in the company by 48%. Later, a Buzzfeed report found that, under Conrad, as many as 80% of Zenefits’ sales of health insurance in Washington state were made by unlicensed brokers. The final blow came in February, when employees were found to be systematically cheating on mandatory insurance-broker training. Conrad was pushed out. His replacement banned drinking at the office, calling Zenefits’ culture “inappropriate for a highly regulated company.” A subsequent Wall Street Journal report found that under Conrad, Zenefits employees held frequent office parties, wrestled with each other in public, and had sex in the office stairwell.
The “Welcome Back, Now Please Leave” Certificate
Michael Pearson, outgoing CEO of Valeant
Valeant (VRX) announced plans to find a new CEO only days after Pearson returned from two months of convalescence for pneumonia as the Canadian pharmaceutical company grappled with what it has conceded was “improper conduct” in misstating its financial results. The departure capped a stunning turnaround as the company went from being a stock market darling for its ability to jack up drug prices… to being vilified for much the same conduct. The “improper conduct” related to recognizing revenue from a mail-order pharmacy called Philidor, which was accused of using shady tactics to get insurers to pay for Valeant medications. (Valeant’s former CFO has denied any wrongdoing.) Also read: Bill Ackman and Michael Pearson: The Inside Story
The “We Are Shocked—Shocked!—To Discover Payoffs” Award
Sepp Blatter and Michel Platini, former FIFA chiefs
FIFA president Sepp Blatter and heir apparent Michel Platini were both banned from the sport for eight years by FIFA’s ethics committee in a belated display of zeal that has convinced no one of its ability to clean house and reform. The two presided over the sport at a time of scandal on an epic scale, resulting in, among other things, a Swiss police raid that culminated in the U.S. indictment of nine senior soccer officials and 16 others for money laundering and racketeering. Both Blatter and Platini have vehemently protested their innocence, but neither has been able to provide a written contract for the $2 million paid to Platini by FIFA in 2011 (for services rendered a decade earlier, according to the pair).
The “What Wouldn’t Don Draper Say?” Medal
Gustavo Martinez, former CEO J. Walter Thompson
The accusations of racist and sexist comments lodged against Martinez were shocking, and had an extra resonance because they echoed—well, exceeded—the picture of unabashed harassment in the advertising industry seen in “Mad Men” (which, it should be noted, was set a half-century ago and was fictional). Martinez stepped down after J. Walter Thompson’s communications chief, Erin Johnson, filed a lawsuit alleging he had made numerous offensive comments, and even grabbed her by the throat. For example, Martinez allegedly told her, in front of other employees, “to come to him so he could ‘rape [her]’ in the bathroom.” He has denied the allegations.
Prize for the Most Breathtakingly Craven Political Move of the Year
Chris Christie, Governor of New Jersey
This is our most hotly contested category, but Christie won it running away… in this case from his past criticisms of Donald Trump. “We do not need reality TV in the Oval Office right now,” Christie said of Trump on the campaign trail. “President of the United States is not a place for an entertainer.” But after the New Jersey governor dropped out of the race—and reportedly began entertaining fantasies of a vice-presidential slot on the ticket—he sang a different song: “I’ve gotten to know all the people on that stage and there is none who is better prepared to provide America with the strong leadership that it needs both at home and around the world than Donald Trump.” Since then, the pugnacious Christie has been likened to an ISIS hostage, a “puppet,” and the “ultimate lapdog,” prompting memories of another candidate who was once lampooned as having “put his manhood in a blind trust.”
Second Most Breathtakingly Craven Political Move of the Year
Rahm Emanuel, Mayor of Chicago
Emanuel is another politician famous for his bellicose personality who redefined himself through abject capitulation. The Chicago Tribune trenchantly summarized Emanuel’s dramatic 180 in the case of the shooting of black teenager Laquan McDonald by a white police officer: “Emanuel initially characterized white Officer Jason Van Dyke’s decision to shoot black teen McDonald as the actions of one bad cop before later saying his Police Department needed ‘complete and total reform.’ He stood by former police Superintendent Garry McCarthy before firing him. He objected to a Justice Department civil rights investigation before welcoming one. And he fought the release of the shooting video before admitting he was wrong to do so after a judge forced his hand.”
Go to fortune.com/worlds-greatest-leaders to check out Fortune’s list of the World’s 50 Greatest Leaders.
The “This Time We Swear We’ve Fixed It” Prize
Steve Ells & Montgomery Moran, co-CEOs, Chipotle
Chipotle’s (CMG) proclamations about “food with integrity” have come back to bite it. For years the burrito chain won accolades from the likes of Fortune, as it provided a high-quality counterpoint to the fast food industry. Now, um, not so much. A nightmare of foodborne illness has ensued—not just E. coli, but also salmonella, and Norovirus—and Ells and Moran provided a lesson in what not to do in a crisis. Rather than take responsibility, Moran first pointed fingers at everyone else—the Centers for Disease Control as well as media for sensationalizing the company’s problems. Then Ells went on national TV and said that Chipotle would be the safest place to eat now that it had implemented new food safety measures. It turned out to be a promise the company couldn’t keep. Two more Norovirus incidents have since occurred. Sales have plummeted, as has the company’s stock price, and Chipotle is facing a federal investigation over its food safety issues. Honorable Mention in the Same Category: Blue Bell Creameries
Big Spenders Award
Al Giordano and Steve Nardizzi, former COO and CEO of the Wounded Warrior Project
A charity for veterans should be the last place that would fritter away 40% of donations on salaries and overhead (including first-class air fare and lavish conferences) rather than using them to help grievously injured soldiers. But that’s what the New York Times and CBS reported about the Wounded Warrior Project. (Other comparable charities typically use 10%-15% of donations on overhead, according to those reports.) For example, Nardizzi received $473,000 in compensation in one year, according to the Times. The organization disputed some elements of the reports, but after an internal investigation, its board announced that “the organization would benefit from new leadership, and WWP CEO Steve Nardizzi and COO Al Giordano are no longer with the organization.”
The Back Scratch Prize
Jeff Smisek, former CEO of United Continental
Smisek stepped down suddenly last September and news reports emerged that United (UAL) operated flights from Newark to Columbia, S.C., despite little passenger demand, because the then-chairman of the Port Authority of New York and New Jersey needed to get to his vacation home. According to those reports, Smisek wanted to curry favor to win approval for projects at Newark, which is operated by the Port Authority. It meant bad press for United and certainly isn’t likely to help the company defend an antitrust suit filed by the Justice Department, in which the government is trying to block a deal in which United would acquire more take-off and landing slots at Newark Airport. (The company has said the deal would benefits customers. The former chair of the Port Authority has denied wrongdoing and no charges have been filed against Smisek.)
Go to fortune.com/worlds-greatest-leaders to check out Fortune’s list of the World’s 50 Greatest Leaders.
The “Don’t Blame It On Rio” Award
Dilma Rousseff, president of Brazil
Rousseff was once a political prisoner during the 21-year military regime in Brazil. Now the president is facing possible impeachment from opposition lawmakers who want to oust her over claims that she masked the country’s growing deficit—and the worst recession in a generation—by manipulating government accounts. Yet even as Rousseff defends her conduct and vows not to resign, the corruption scandal grows and she stumbles, most recently by attempting to appoint her predecessor and mentor, former President Luiz Inacio Lula da Silva, as her chief of staff in what appeared to be a transparent attempt to shield him from prosecution (cabinet members in Brazil enjoy immunity). The spread of the Zika virus and fears of a trouble-plagued Olympic games later this year haven’t helped.
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