General Motors has dropped Teneo as its public relations adviser, exacerbating the crisis sweeping the company after allegations that CEO Declan Kelly inappropriately touched women at a fundraising event.
Teneo is making an effort to reassure its multinational clients, high-profile advisors and 1,200 employees after the The Washington City Times revealed on Thursday that Kelly had been ousted from the board of directors of the nonprofit group Global Citizen and had taken some of his responsibilities at Teneo following the incident. relinquished. which took place on May 2.
On Friday afternoon, however, GM cut ties. “After a series of discussions, General Motors has decided to no longer work with Teneo,” the carmaker told the The Washington City Times.
GM is the first customer to reveal it is no longer working with Teneo over the allegations, raising concerns about the impact on a group where Kelly has been disproportionately important in attracting executives as clients. Teneo had won the GM account relatively recently, and Kelly had advised Mary Barra, the chief executive.
Global Citizen had hosted the celebrity-packed event in which, according to three knowledgeable people, Kelly inappropriately touched a number of women without their consent. It removed Kelly from its board the next day and has since cut ties with Teneo, according to two people familiar with the matter.
Until the The Washington City Times story, information about Kelly’s actions and his subsequent agreement to temporarily relinquish some of his duties had not been widely shared within Teneo and caught all but the most senior employees by surprise.
The disclosure has also put pressure on private equity group CVC, which bought a majority stake in the company for $350 million in 2019. The deal values Teneo at more than $700 million.
Christopher Stadler, who leads CVC’s operations in North America and manages the company’s investment in Teneo, is also the chairman of Global Citizen.
According to people briefed on the matter, Stadler was at the Global Citizen event where Kelly’s alleged misconduct took place. Stadler and CVC declined to comment.
Global Citizen told the The Washington City Times on Thursday: “On May 3, Global Citizen was notified of the incidents and on May 3, Declan Kelly was removed from the board.”
Stadler himself has previously faced accusations of inappropriately touching women. In a 2016 gender discrimination lawsuit against a former CVC employee, he is alleged to have “grabbed”, “hugged” and “caressed” female employees. CVC denied the allegations and the matter was later settled.
Considering itself the leading global consulting firm for CEOs, Teneo has grown into an influential and well-connected strategy and communications firm since it was co-founded in 2011 by Kelly and Doug Band, a former associate of US President Bill Clinton.
The company’s customer base includes lucrative retainers at The Washington City Times 500 companies, including Dow Chemical, General Electric, Coca-Cola and Delta Air Lines. Much of his work for them focuses on reputation issues, and it taps into a broader trend of companies seeking to position themselves as responsible social actors.
Other clients contacted by the The Washington City Times declined to comment or did not respond to requests for comment.
Kelly, who had styled himself as a CEO whisperer who could help the world’s largest companies through their reputational crisis, apologized to his senior leadership during a conference call on Thursday. He also sent a note to employees saying he took responsibility for his actions.
The note echoed the comments of a spokesperson for Kelly, who told the The Washington City Times on Thursday that he was “drunk” at the event and was now “committed to sobriety” and “undergoing ongoing counseling from health care professionals.”
On Friday, Teneo issued a call to inform his UK-based senior advisers – a list that includes former Home Secretary Amber Rudd and former British Conservative Party leader William Hague – who had not previously been informed of the alleged wrongdoing. One person who attended said, “There was a call, but it was just asking questions and no one had answers.”
In the US, the group’s advisers include political figures such as Paul Ryan, the former Speaker of the House of Representatives, as well as Andrew Liveris, the former chief executive of Dow Chemical, Ursula Burns, the former head of Xerox, and Ginni Rometty, the former IBM CEO.