Russell Simmons just joined the list of recent Hollywood Heavy hitters accused of sexual assault by multiple women. After Jenny Lumet recently gave a very detailed statement of her encounter with Simmons, he stepped down from his companies. “I will step aside and commit myself to continuing my personal growth, spiritual learning and above all to listening,” he recently stated. Stepping down is the right thing to do but why?
Russell Simmons headed multiple businesses before stepping down. The list includes Def Jam Recordings, Rush Communications, multiple clothing lines, and the several other brands. However, J.C Penny recently dropped Russell’s fashion line. In addition, HBO severed ties with Russell amid the sexual allegations.
My antennas go up and immediately I have questions. Legal questions. Can his companies face lawsuits from shareholders or the victims? Maybe Russell is hopeful that stepping down will appease victims and he can avoid monetary damages? I mean, companies are distancing themselves for a reason after all. Sexual allegations looming over your brand is just bad for business! (I’m looking at you Bikram Yoga!)
Companies have a lot to lose!
Remember, recently Harvey Weinstein’s victim sued the film company when she alleged the board members knew about and ignored sexual misconduct? She claimed the film company “aided and abetted” Weinstein. Or, remember when Twenty-First Century Fox Inc. settled for $90 million because shareholders sued after the sexual harassment scandals? Lastly, remember when shareholders sued Signet Jewelers claiming that the company hid sexual allegations from them?
Neither victim filed a civil suit against Simmons nor has the state charged him criminally. Depending on state law, the time to file each suit may have passed. Still, I’m sure Simmons isn’t comfortable knowing these are possibilities.
Men who find themselves in these situations step down because it looks a whole lot better than being fired. They are a liability to the company in more ways than one.