Lawyers are paid to minimize legal risk. A CEO's unique role is to balance that counsel against other crucial factors like customer trust, employee morale, and future opportunities. Ceding decision-making entirely to the legal team is a failure of leadership that can lead to catastrophic, albeit less immediately visible, losses.

In analyzing a public scandal, Scott Galloway notes that the greatest damage in a crisis typically isn't the initial event but the subsequent "shrapnel": the attempts to cover up, excuse, or avoid accountability. An effective response requires acknowledging the problem, taking responsibility, and overcorrecting.

Stakeholders demand courageous leadership but foster a culture of intolerance. By failing to distinguish between major offenses and minor infractions and "canceling" leaders for mistakes, the public itself disincentivizes the very courage and authenticity it seeks, creating a paralyzing circular problem.

When Bud Light faced backlash for a partnership, the CEO's vague statement failed to support its partner. This attempt to play it safe backfired, alienating not only the original critics but also the community it intended to support, proving a non-committal stance is often the most damaging.

When Duolingo's Zaria Parvez made a controversial post, her CMO framed the misstep as a necessary learning experience. This cultural attitude towards risk-taking encourages the creative experimentation required for breakthrough social media, turning a potential firing into a valuable lesson on brand boundaries.

Duolingo CEO's internal memo prioritizing AI over hiring sparked a public backlash. The company then paused its popular social media to cool down, which directly led to a slowdown in daily active user growth. This shows how internal corporate communications, when leaked, can directly damage external consumer-facing metrics.

A senior hire was instrumental in getting Snowflake's CRO promoted. Eighteen months later, that same person was found to be 'cancerous to the organization.' The CRO had to fire them and go on an 'apology tour,' a painful but necessary act of leadership to protect the company culture.

When its Sydney Sweeney ad faced backlash, American Eagle's CMO and the star refused to apologize, treating the "crisis" as an opportunity. They correctly identified the outrage as niche, stuck to their strategy, and saw record new customer growth. This marks a shift in brand bravery.

Instead of immediately issuing a statement during the backlash, American Eagle waited nine days. This delay created a vacuum that was filled by other people and media outlets questioning the absurdity of the claims, shifting public sentiment in the brand's favor before they even responded.