Andrew Mason, the chief executive officer of Groupon, has, in his own words, been fired. His resignation letter has been described in the press as charming, but the market seemed to think it was simply about time. Shares in Groupon went up more than 10 percent following the announcement on Thursday.
Firing Mason has taken too long, and the board has a lot of work to do. Groupon, though it might not have always acted like it, is a grown-up business with an entire ecosystem that depends on it, and with that comes responsibility. I’m not just talking about the investors, I’m talking about its more than 11,000 employees in 48 countries, its global network of businesses – from mom-and-pop stores to big organizations like Expedia ‑ that depend on a reliable service that has often in the past let them down, along with the users of Groupon coupons. All of them need to know they are dealing with a company that is reliable and will honor their purchases.
The Groupon board will have to act decisively and transparently to build some goodwill and let everyone know that, although slow to act on getting rid of Mason, it takes its obligations and relationships seriously and will act fast to repair them. In a written statement, the board conceded that “our operational and financial performance has eroded the confidence of many of our supporters, both inside and outside of the company. Now our task at hand is to win back their support,” and now they have to show that they know how to do that.
What does the board and the management team need to do?
The board took too long to part ways with Mason, and even with their inaction, Mason should have removed himself long ago, as knowing when to go shows true leadership. The writing has been on the wall, with the financial results being poor for a very long time. Groupon’s share price has lost 75 percent of its value since its initial public offering in 2011, and the stock fell 25 percent when its fourth-quarter results were released this week.
The board made some changes recently to beef up its audit and finance expertise in the wake of a very public rebuke about its audit committee failings, but the people around the table now need to ask themselves why it took so long and how they are going to do things differently.