GM severes ties with Teneo following allegations of misconduct by the CEO

General Motors has left Teneo as its public relations adviser, deepening the crisis that has engulfed the company following allegations that chief executive Declan Kelly improperly touched women at a fundraising event.

Teneo is on track to reassure its multinational clients, high-profile advisors and 1,200 employees after the Financial Times revealed Thursday that Kelly had been fired from the board of the nonprofit group Global Citizen and handed over some of its responsibility in Teneo after the incident, which took place on 2 May.

Friday afternoon, however, GM cut ties. “After a series of discussions, General Motors decided not to engage with Teneo anymore,” the vehicle manufacturer told FT.

GM is the first customer to reveal that it has stopped working with Teneo over the allegations, raising concerns about the repercussions for a group where Kelly has been disproportionately important in attracting top executives as customers. Teneo had earned the GM account relatively recently, and Kelly had advised Mary Barra, its executive director.

Global Citizen had organized the celebrity-rich event where, according to three people with knowledge of the subject, Kelly inappropriately touched a number of women without her consent. The next day, he removed Kelly from his board and severed ties with Teneo, according to two people familiar with the matter.

Until the FT story, information about Kelly’s actions and his subsequent agreement to temporarily cede some of his functions had not been widely shared in Teneo and he had fired everyone except his older employees.

The revelation also put pressure on private equity group CVC, which in 2019 bought a majority stake in the business for $ 350 million. The deal estimated Teneo at more than $ 700m.

Christopher Stadler, who directs CVC’s operations in North America and manages the company’s investment in Teneo, is also the president of Global Citizen.

According to people informed on the matter, Stadler was at the Global Citizen event where the alleged lack of behavior by Kelly occurred. Stadler and CVC declined to comment.

Global Citizen told FT on Thursday: “On May 3, Global Citizen was notified of the incident and, on May 3, Declan Kelly was fired from the board.”

Stadler himself has previously faced accusations of touching women inappropriately. In a 2016 sex discrimination lawsuit by a former CVC employee, she was said to have “grabbed”, “hugged” and “caressed” employed women. CVC denied the allegations and the case was later resolved.

Teneo, which billed itself as the largest global CEO consulting firm, has become an influential and well-connected strategy and communications activity since it was co-founded in 2011 by Kelly and Doug Band, former assistant to the president of the United States Bill Clinton.

The company’s customer list includes lucrative deals with Fortune 500 companies including Dow Chemical, General Electric, Coca-Cola and Delta Air Lines. Much of his work for them focuses on reputation issues, and has exploited a broader trend of companies wanting to present 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 stood out as a whimsical CEO capable of helping the world’s largest companies through their reputation crises, apologized to his senior management at a conference call Thursday. He also sent a note to employees saying it resembled his action.

The note echoed the comments of a Kelly spokesman, who told the FT on Thursday that he was “intoxicated” at the event and was now “engaged in sobriety” and “undertaking ongoing advice from healthcare professionals.” .

On Friday, Teneo made a call to inform his former UK-based advisers – a list that includes former interior secretary Amber Rudd and former UK Conservative party leader William Hague – that they had not been informed prior to the alleged misconduct. One person who attended said: “There was a call but it was just a question and no one got answers.”

In the United States, the group’s advisers include political figures such as Paul Ryan, the former speaker of the House of Representatives, and Andrew Liveris, the director of Dow Chemical, Ursula Burns, the former head of Xerox, and Ginni Rometty, former IBM chief executive.

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