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General Motors has left Teneo as a public relations consultant, deepening the crisis that engulfed the firm following allegations that chief executive Declan Kelly improperly touched women at a fundraising event.
Teneo is working to reassure its multinational clients, high-profile advisors and 1,200 employees after the Financial Times revealed on Thursday that Kelly had been fired from the board of the nonprofit group Global Citizen and had ceded some of its responsibilities to Teneo after the incident. which took place on 2 May.
On Friday afternoon, however, GM cut ties. “After a series of discussions, General Motors has decided to stop relating to Teneo,” the manufacturer told FT.
GM is the first customer to reveal that it has stopped working with Teneo over allegations, raising concerns about the consequences of a group where Kelly has been disproportionately important in attracting leading executives as customers. Teneo had won the GM account relatively recently, and Kelly had advised Mary Barra, its chief executive.
Global Citizen had organized the event full of celebrities where, according to three people with knowledge of the matter, Kelly improperly touched several women without her consent. The next day he removed Kelly from his board of directors and has since severed ties with Teneo, according to two people familiar with the matter.
Until the story of FT, information about Kelly’s actions and her subsequent agreement to temporarily cede some of her duties, had not been widely shared inside Teneo and blinded all older employees.
The revelation has also put pressure on private equity group CVC, which in 2019 bought a majority stake in the business for $ 350 million. The deal values Teneo at more than $ 700 million.
Christopher Stadler, who leads CVC’s business in North America and manages the firm’s investment in Teneo, is also the president of Global Citizen.
According to people on the subject, Stadler was at the Global Citizen event where Kelly’s alleged misconduct occurred. Stadler and CVC declined to comment.
Global Citizen told FT on Thursday: “On May 3, Global Citizen was notified of the incidents, and on May 3, Declan Kelly was removed from the board.”
Previously, Stadler himself has faced allegations of touching women inappropriately. In a 2016 gender discrimination lawsuit from a former CVC employee, it was said that he had “grabbed”, “hugged” and “caressed” employed women. CVC denied the allegations and the case was subsequently resolved.
Teneo, which presents itself as the world’s leading CEO consulting firm, has become an influential and well-connected strategy and communications business since it was co-founded in 2011 by Kelly and Doug Band, a former aide to the President of the States. United Bill Clinton.
The firm’s client list includes retained profits with Fortune 500 companies such as Dow Chemical, General Electric, Coca-Cola and Delta Air Lines. Much of their work for them focuses on reputation issues and has taken advantage of a broader trend of companies wanting to represent themselves as responsible social actors.
Other customers contacted by the Financial Times declined to comment or did not respond to requests for comment.
Kelly, who had been hailed as an executive whisperer capable of helping the world’s largest companies through their reputational crises, apologized to their top leaders at a conference call Thursday. He also sent a note to employees saying he was responsible for their actions.
The note echoed the comments of a Kelly spokesman, who told FT on Thursday that he was “intoxicated” at the event and was now “committed to sobriety” and that he was “conducting ongoing counseling from health professionals.” .
On Friday, Teneo made a call to inform his UK-based top advisers – a list that includes former Home Secretary Amber Rudd and former UK Conservative party leader William Hague – that they had not been previously informed. of the alleged misconduct. One person who attended said, “There was a call, but I was just asking questions and no one had any answers.”
In the United States, the group’s advisers include political figures such as Paul Ryan, former Speaker of the House of Representatives, as well as Andrew Liveris, former Dow Chemical executive Ursula Burns, former head of Xerox , and Ginni Rometty, the former CEO of IBM.
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