Corporate Scandals Over 25 Years: A Study of Survival and Collapse
A recent review by vpnMentor examining 25 years of corporate scandals has provided valuable insights into how businesses can navigate major crises. The study analyzed 58 companies embroiled in significant scandals, highlighting which organizations managed to adapt and survive, and which ultimately collapsed.
Companies That Failed to Survive Scandals
Several high-profile companies ceased operations following major scandals. Notable examples include:
- Lehman Brothers, whose bankruptcy in 2008 remains the largest in U.S. history, triggered by exposure to failing mortgage-backed securities.
- Cambridge Analytica, which shut down after revelations of improper collection of Facebook user data.
- FTX, which filed for bankruptcy amid allegations of misusing customer funds.
- Wirecard and Financial Advisory Consultants, which faced allegations of accounting fraud and Ponzi schemes.
Countrywide Financial, a significant player in the subprime mortgage crisis, was absorbed by Bank of America.
Companies That Survived Scandals
Despite significant fallout, the majority of companies analyzed – 41 in total – continued to operate following their scandals. Examples include:
- Boeing, which addressed fallout from the 737 Max crashes.
- Epic Games, which settled allegations related to children’s privacy.
- General Motors, which paid penalties for vehicle defects but maintained market presence.
Interestingly, some companies, such as Johnson & Johnson, Herbalife, and Monsanto, reached their highest stock prices after the scandal broke, indicating successful recovery.
Minimally Disrupted Businesses
The analysis also found that some businesses faced minimal disruption from allegations. For example, PayPal’s Honey extension and Google’s AdSense program experienced limited financial impact despite criticism.
Emerging Business Risks
The findings coincide with growing concerns about operational risks globally. The Allianz Commercial Risk Barometer for 2025 identified cyber incidents as the most significant business risk for the fourth consecutive year. Key findings from the Allianz report include:
- Cyber risks, including breaches and ransomware attacks, were ranked as the top concern by 38% of 3,778 executives surveyed across 106 countries.
- Business interruption was the second most pressing concern, often resulting from cyberattacks, natural disasters, and supply chain disruptions.
- Natural catastrophes ranked third, reflecting another year of extreme weather events and significant insured losses exceeding $100 billion.
- Regulatory and legislative changes ranked fourth, with rising compliance costs associated with privacy laws, environmental disclosures, and cybersecurity requirements.
The study underscores the importance of robust risk management strategies in today’s complex business environment. By understanding how companies have navigated past scandals and current risks, businesses can better prepare for future challenges.
