Friday, April 10, 2009
CEOs Face Growing Threats at Home and Abroad
Rising tempers in the U.S. about bailed-out banks, inappropriate bonuses and millions of layoffs have given a whole new definition to the term “job security” for Corporate America’s senior executives.
Given a string of high-profile kidnappings overseas and increasing confrontations with activists (see: CodePink) at home, many CEOs may now need to consider taking steps to protect their physical safety as the U.S. recession extends into its 17th month.
“The sorry fact is that too many executives are suffering from a denial syndrome that it’s never going to happen to them — until it does,” said Joseph LaSorsa, who drove former President Ronald Reagan as part of a 20-year career at the Secret Service and now owns security consulting firm J.A. LaSorsa & Associates.
Executives face a growing danger when traveling overseas and could be the victims of violence at home from angry shareholders, disgruntled employees and a disillusioned American public sick of a string of corporate bailouts.
“It’s pushing people off the deep end and it’s going to continue. We’ve added the ingredients to this makeshift bomb and it will explode,” said LaSorsa.
The biggest worry is that CEOs in the U.S. or their families could be kidnapped by criminal elements hoping to make a quick buck. These so-called “express kidnappings,” which have taken off in Mexico and Central America, are aimed at scoring a ransom from companies desperate to bring the situation to a conclusion.
“This is an increasing phenomenon occurring around the world, and as the economy continues to deteriorate we will be facing it here because it’s a quick, easy way to make money,” said LaSorsa.
While there haven’t been many high-profile cases of this type of kidnapping occurring here, angry workers in France have made locking up their managers over labor disputes become the norm, including recent examples involving 3M and Sony. Police have been apprehensive about intervening, and recent polls in France show nearly half of the population believes such a practice is acceptable.
Executive security ranges from $125 per hour to $4,000 per day, depending on the threat level. Companies typically pay for security of executives, their families and their homes.
Kelly Klatt, CEO of Center for Security Solutions, an Orlando, Fla.-based consulting firm, said he has seen an uptick of interest in recent months from companies fearful of more outrage if the economy fails to recover soon.
“They are doing ‘what if’ planning. ‘What if it gets worse? What do we need to do to protect our management?’” said Klatt.
At the same time, LaSorsa said he is seeing companies growing more apprehensive about sending their executives abroad, with many instead opting to conduct teleconferences.
“If they don’t have to go, they shouldn’t go. If they’re not traveling with security the bottom line is they are going to be exposed,” said LaSorsa.
Even at home CEOs have proven to be easy targets. Earlier this week Goldman Sachs CEO Lloyd Blankfein was confronted at a recent speech by members of CodePink, a women’s anti-war activist group. The activists charged onto the stage and loudly protested against the bank bailouts, holding a sign that said “We want our $$$$$ back.”
And it’s not just the usual suspects of angry workers and angrier activists. Negotiators off the coast of Somalia are still trying to bring a peaceful resolution to the kidnapping of the captain of a hijacked container ship, which earlier this week became the first American hostage-taking by pirates in 200 years.
While his clients aren’t often in standoffs with pirates, LaSorsa said he has also seen a boost to business due to executives worried about their own security in the current environment.
LaSorsa charges $150 an hour, and said his firm provides bullet-proof vests (when needed), bodyguards armed with 9mm semiautomatic sidearms and armed chauffeurs. He said it’s also necessary to send advanced security agents to scout locations before clients arrive into what can quickly turn into a hostile environment.
LaSorsa said he sees a “domino effect” where the credit crisis has forced businesses to shut down and lay off thousands of workers, some of whom could be come threats to executives.
“That just fuels my business,” he said.