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Declan Kelly, the chief executive of Teneo, the go-to advisory and communications firm for many of the world’s largest companies, said on Tuesday that he would step down. The firm, which specializes in crisis communications, has been dealing with its own turmoil after reports of Mr. Kelly’s drunken misconduct at a charity event last month.
The firm’s chief operating officer, Paul Keary, was appointed as Mr. Kelly’s replacement, effective immediately, Teneo’s board said in a statement on Tuesday.
Reports have surfaced that Mr. Kelly was asked to leave the board of the nonprofit organization Global Citizen after his misconduct at an event hosted by the charity on May 2. The event, an after party for the Vax Live concert, was hosted by Selena Gomez, with Prince Harry and Meghan Markle serving as chairs. It featured a video appearance from President Biden and in-person musical performances from celebrities including Jennifer Lopez.
Mr. Kelly was “inebriated and behaved inappropriately towards some women and men,” according to a statement from Mr. Kelly’s representative, provided to The New York Times before his resignation. The exact details of what occurred at the event remain unclear, even to top executives at the firm.
Shortly after that May event, Mr. Kelly told the firm’s roughly 40-member senior leadership team that he would cut back on some of his duties to deal with an unspecified health issue.
But most of the rest of Teneo’s employees, as well as the firm’s clients, found out about the incident last week from an article in The Financial Times. Afterward, the firm began to reach out to clients. And Mr. Kelly called for a staff meeting to discuss the article.
Mr. Kelly had planned to resume his normal duties after Labor Day.
“I’ve seen a number of crisis communications challenges over the course of my career — this one is especially challenging because the firm and Mr. Kelly are in the business,” said Tony D’Angelo, a professor of public relations at Syracuse University. “This is like a celebrity chef who burns dinner on a global broadcast.”
The fallout has been swift. General Motors, which became a client of Teneo this year, severed ties with the firm. A senior managing director quit on Friday as result of the event and the firm’s handling of it. Many others have questioned the firm about what happened at the event.
“On May 2 I made an inadvertent, public and embarrassing mistake for which I took full responsibility and apologized to those directly affected, as well as my colleagues and clients,” Mr. Kelly said in a statement. “A campaign against the reputation of our firm has followed and may even continue in the coming days. However, regardless of the veracity of any such matters I do not want them to be an ongoing distraction to the running of our company.”
Teneo was founded by Mr. Kelly, Mr. Keary and Doug Band in 2011 and has 1,250 employees. It gives advice to some of the country’s largest companies, like Coca-Cola, Dow Chemical and IBM. Its prominent advisers include former Speaker Paul Ryan and the former Xerox chief executive Ursula Burns.
“This is a friend of mine who definitely had a bad occurrence — and he has to deal with that, and he’s dealing with that as we go forward,” Ms. Burns said Tuesday. She called Teneo a “good firm.”
Mr. Kelly’s resignation is the second prominent departure from the firm in the last two years. Mr. Band, a former close adviser to President Bill Clinton, stepped down as president last year. Both had positioned themselves as well-connected faces of the firm.
Teneo’s board said in its statement that it “believes strongly in Teneo’s unique C.E.O. advisory model, global reach and ability to deliver differentiated value to our clients.”
“We are confident that under Paul, and the leadership team, Teneo will continue on its successful path of growth, delivering unique value to clients across its diverse business segments,” the board said.
CVC Capital Partners, a private equity firm, acquired a majority stake in Teneo two years ago, valuing it at about $700 million. A managing partner of CVC, Chris Stadler, is on the board of Global Citizen, which hosted the event at which Mr. Kelly acted inappropriately. CVC declined to comment.
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