Biden’s Refusal To Step Aside Has Parallels In The Corporate World

The refusal by President Joe Biden to drop out of the race for the White House in favor of another candidate underscores important issues about whether and when corporate executives should resign or retire during or after a crisis.

The answers can depend on different factors and variables.

Performance-Driven

Biden’s disastrous debate performance sparked renewed concerns that quickly turned into alarms about his cognitive ability and communication skills.

In the business world, a similar performance by a CEO at a shareholder or board meeting would likely spur calls that he or she immediately seek medical attention or take a leave of absence or step down.

Their reluctance or refusal to leave would automatically put the executive into a defensive situation, which is never a good place to be. And it could strengthen arguments as to why they should step down immediately.

Protest-Driven

It is not unusual for boards of directors to ask or pressure senior executives to step down because of their role in creating or perpetuating a crisis.

Think back to last year when, in the aftermath of campus protests and of a headline-making testimony before a congressional committee, the president of the University of Pennsylvania resigned.

She stepped down “amid pressure from donors and criticism over testimony at a congressional hearing where she was unable to say under repeated questioning that calls on campus for the genocide of Jews would violate the school’s conduct policy,” the Associated Press reported.

Company officials who immediately submit their resignations after a crisis can help their organizations move on. But executives who insist on staying—even in the face of growing internal or public pressure that they leave—run the risk of making a bad situation worse by extending or adding a new aspect to the crisis.

Corporate Parallels

Restoring Confidence

“Biden’s decision to stay in the 2024 race, despite calls for him to step down, mirrors corporate scenarios where CEOs faced immense pressure but chose to remain.” Lakesha Cole, founder and principal publicist at she PR, said via email.

Boeing CEO Dennis Muilenburg “was ultimately ousted as Boeing CEO after a tumultuous period marked by two fatal 737 Max crashes, production delays, and numerous issues with the aircraft,” she pointed out.

“The intense pressure from stakeholders, regulators, and the public led to his resignation, deemed necessary to restore confidence and allow Boeing to address the significant challenges in getting its crucial product back in the air,” Cole observed.

Pressure From Stakeholders

Volkswagen CEO Martin Winterkorn “initially refused to step down despite the massive fallout and pressure from various stakeholders because of the company’s emissions scandals in 2015,” Christine Haas, founder of Christine Haas Media, said via email.

“His decision to stay on was seen as a move to stabilize the company during the crisis. However, as the scandal deepened and the company’s credibility was severely impacted, Winterkorn eventually resigned, recognizing that his departure was necessary to restore trust and enable the company to move forward with a new strategy and leadership .

Paving The Way For New Leadership

Travis Kalanick, the CEO of Uber “faced immense pressure to resign in 2017 following a series of scandals, including allegations of a toxic work culture and regulatory issues,” Haas recalled.

“Despite his significant role in building Uber, Kalanick stepped down, allowing the company to bring in new leadership under Dara Khosrowshahi, who focused on stabilizing the company and improving its public image,” she noted.

“For President Biden, his decision to remain in the race underscores his commitment to his agenda and his belief in his ability to lead. However, it also raises questions about the broader implications for party unity and electoral success, much like how corporate leaders must weigh their personal leadership against the long-term health of their organizations,” Haas concluded.

‘It’s Never Easy’

It’s never easy for senior executives in or outside of government to decide whether to stay or go during a crisis—or wait to be pushed.

A lot can be at stake for the future of those that they work for—and their own legacies.