Checking In For Wellness

On of the toughest jobs a leader can take on is leading horizontally and leading up. Leading without authority or the power of title is a critical skill that all great leaders have learned. Even a CEO has to, at times, lead the board of directors or the Chairperson of the board needs to lead shareholders.

To develop this lateral and upward leadership is when a leader must exercise his/her determination, resolve and courage but also must demonstrate their compassion and situational awareness. To demonstrate this skill, I’ll tell a story…

A young, entrepreneurial company had a great technology that had a winning business model that was being proven and successfully monetized. They had successfully raised an angel round and were setting the stage for the Series A round. A recent hire, in putting the pitch deck together and analyzing the income and expenses of the company, discovered a problem with the expenses. There were significant expenses being paid to third parties that did not have an apparent connection to the company. Upon deeper examination, this employee realized the founder was paying personal expenses from the company income and not reporting it as personal income. The founder had a reputation of being very volatile and even vengeful to people he felt had treated him wrong or crossed him in any way. The company held great promise with a huge upside for this employee but she also knew this behavior was not appropriate especially after the founder brought in angel investors as partial owners. Since this employee was brought in to raise this venture round her personal reputation and credibility were also at risk. What did she do with this moral dilemma?

She meet with the Founder to address her discovery and to understand better the true nature of these expenses. Her worst fears were realized. The founder was using company money to pay personal expenses. His justification was, “It’s my company. i am the founder, CEO and President and I’ve got a lot of ‘skin in the game’”. The founder was reminded that the minute he closed on the Angel Round, it was no longer his company but a company of many and he was not entitled to use money personally without proper documentation, plus there was the issue with properly reporting and paying payroll taxes on his entire income. This employee then indicated the only way to correct this payroll and accounting problem was to amend past income tax returns and immediately pay the outstanding payroll taxes on this income that had been previously unclaimed.