A fraying web of influence
Declan Kelly, the chief executive of Teneo, an influential corporate advisory firm, abruptly quit yesterday. The announcement by Teneo’s board came a week after the firm said he would temporarily reduce his duties for the next few months, following news of his drunken misconduct at a charity event last month. DealBook’s Lauren Hirsch has been tracking the story for The Times.
Kelly was the right-hand man of many a C.E.O. He helped build Teneo with captivating salesmanship and the access afforded by a star-studded Rolodex shared by him and the onetime Clinton family confidant Doug Band, with whom he founded the firm. Kelly amassed a following of loyal powerful executives, including Dow Chemical’s Andrew Liveris, Coca-Cola’s Muhtar Kent and IBM’s Ginni Rometty. Teneo also got Washington power players to join its roster of advisers, like the former House Speaker Paul Ryan and the former Senate majority leader George Mitchell.
The firm, which covers the likes of M&A advisory, management consulting and crisis communications, has more than 1,200 employees. It has expanded by investing in firms like WestExec Advisors, founded by Tony Blinken, who is now secretary of state.
Teneo initially kept Kelly’s misconduct under wraps. Shortly after the May 2 event, where Kelly was “inebriated and behaved inappropriately toward some women and men,” according to a statement from his representative, Kelly told the firm’s senior leadership that he would cut back his duties to deal with an unspecified health issue. Most Teneo employees, and the firm’s clients, found out about the incident last week from an article in The Financial Times. The firm then began reaching out to clients, and Kelly asked for a staff meeting to discuss the article — although the call irked some attendees, focusing more on Kelly’s health than reports of his inappropriate touching of women.
A senior managing director quit on Friday as a result of the event and the firm’s handling of it. At least one client, General Motors, has severed ties with Kelly, and many others are seeking answers about what exactly happened at the event.
Without Kelly, what is Teneo worth? Kelly’s last firm, Financial Dynamics, sold to FTI Consulting for $260 million in 2006, then one of the splashiest deals of its kind. He founded Teneo in 2011, with the same build-to-sell mentality. B.C. Partners invested in the company in 2014, and five years later, CVC bought a majority stake for more than $700 million. The test now for Teneo, and its investors, will be to retain accounts and employees — DealBook hears that competitors are eagerly circling — by dealing with its own crisis as effectively as it pledges to do for clients.
HERE’S WHAT’S HAPPENING
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United Airlines makes a big bet on business travel. The airline placed an order for 270 planes, the biggest purchase by an American carrier in at least a decade. Much of the new seating capacity will be for first-class and business class, as United hopes to attract high-paying customers traveling for work.
Meet the S.E.C.’s new enforcement chief. The agency picked Gurbir Grewal, New Jersey’s attorney general and a former federal prosecutor, to lead its all-important enforcement division. The previous pick for the role, Alex Oh, resigned after a federal judge criticized the conduct of lawyers representing Exxon Mobil, including her, in a lawsuit.
Google and Microsoft take the gloves off. A six-year truce between the tech giants, in which they pledged to call off litigation and to not complain to regulators about each other, has expired, The Financial Times reports….
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