When a Founder Talks (or Acts) Out of School

When a Founder Talks (or Acts) Out of School Mark Wilson / Getty Images Bill Gates

Microsoft Corp. founder Bill Gates set tongues wagging in the tech world and beyond on Monday when he seemingly broke rank with the company he created as well as most of Silicon Valley on a major digital privacy issue.

In an interview with the Financial Times, Gates seemed to sympathize with the U.S. government’s position that Apple Inc. should make new software to help the Federal Bureau of Investigation get access to an iPhone belonging to one of the shooters from December’s attack in San Bernardino, California. Gates told FT that he didn’t agree with Apple that compelling it to engineer a way to access the shooter’s data would create a back door into personal devices or set a wide precedent for future invasion of privacy.

Gates’ comments seemed to contradict those made by Microsoft, which has expressed support for Apple’s resistance to the government’s request as a member of the tech privacy advocacy group Reform Government Surveillance. It didn’t take long for Gates to go on record to try and clarify his views, but by then the message was already out.

The situation with Gates underscores a bigger challenge that companies face: understanding how a founder, who might not even be in a leading role at the company, can still appear to speak for the whole organization.

The Microsoft statements may have been deemed controversial, but from a legal and governance perspective at least, they have no direct bearing on the company. “Gates is not a director or executive officer of Microsoft,” says Joseph Grundfest, professor of law and business at Stanford Law School’s Rock Center on Corporate Governance. “He is perfectly free to have views that differ from the corporation’s without raising any governance issues at all.”

Gates stepped down from as CEO back in 2000 and left as chairman in 2014, although he still is a shareholder and maintains an advisory role at Microsoft.

A founder or another former leader may no longer occupy a legal or even a formal role representing a company, but in certain cases his or her words or deeds might still weigh on the company. That’s especially true for a Bill Gates, who is closely associated with Microsoft in the public eye. “It’s not that he’s a founder that’s an issue,” says Sydney Finkelstein, a professor at the Tuck School of Business and author of the upcoming book “Superbosses.” “It’s that the founder is still an integral part of the company that’s so unusual.”

Gates was merely expressing his opinion, but other founders closely associated with the brands of the companies they founded have presented much bigger public relations worries. Take Dov Charney, the high-profile founder and former CEO of clothing company American Apparel who was accused of sexually harassing women. Or Tom Perkins, retired co-founder of venture capital firm Kleiner Perkins Caufield & Byers who compared popular distaste for the “1 percent” in Silicon Valley to persecution of Jews in Nazi Germany.

It’s hard for the PR and legal departments to stop a founder from acting out or expressing an outlandish opinion. But companies can at least try to keep them on message. Jim Haggerty, president and CEO of strategic communications firm PRCG Haggerty, says companies can’t forget that when it comes to a PR strategy, those who are outside the company, but are still associated with it, shouldn’t be forgotten.

“Public communications isn’t about absolute control, but its about control,” says Haggerty. “And the more you can inform the internal and external people who carry your banner, the more likely you’ll have a situation where they are speaking in ways that reinforce the company’s position.”

Maybe Gates missed the memo about Microsoft’s viewpoint on the Apple saga, but there is certainly a wide chasm of difference between him and Charney, who was booted from American Apparel, or Perkins, whose former firm vociferously distanced itself from him and his commentary.

Haggerty explains that breaking off a relationship with someone because of their comments is “kind of the DEFCON 5 of public relations response” for a company. So it’s not something to be taken lightly or done unless it’s truly necessary for the good of the organization. “You have to be vigilant about these situations where comments are so antithetical to a company and its beliefs that a breaking off of relationships makes sense, as opposed to where [comments are] misstated and don’t quite jive,” Haggerty says.

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