“But why do resignations take place? To put it simply, for protecting brand image. One thing common in all these examples is, they were widely publicized by media. It began with the complaint against Tejpal, to minute details of Pachauri’s propositions to his colleague, to Uber’s Susan Fowler’s blog and anonymous blog about Kumar – all of which were in public domain and extensively talked about. This, certainly, took the management of these organizations by surprise. With ‘Image’ being the most important contributor to profits, naturally management could not be expected to remain attached to a bad name! Hence, a simple quick fix – severance.

Moreover, today, with such outburst of the start-up culture and investors investing millions in startups to build a brand name, a complaint against leaders of such start-ups can be a severe blow to the efforts. It is, therefore, not surprising to see reports stating Kalanick had to resign as CEO from Uber after pressure from five big Uber investors. Similarly for Kumar, from reports, it seems the decision to keep him away from TVF was taken by hedge fund Tiger Global Management which owns 25% stake in TVF with investment of about Rs. 70 crores.

But apart from protecting brand image, do these resignations serve any other purpose? These people can simply continue with new businesses, new jobs etc. so how does it help? Well, if…”

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