The departure of Moderna’s CFO reignites the culture debate

The departure of Moderna’s CFO reignites the culture debate

Moderna became a $50 billion success story by developing a Covid-19 vaccine at an unprecedented pace. But the biotech may have smashed a less illustrious speed record this week when it fired its chief financial officer after just a day on the job.

The Boston-based biotech said Jorge Gomez is leaving the company after an investigation at his former employer, dental equipment maker Dentsply Sirona, was revealed linked to financial reporting issues.

Gomez’s sudden departure, just a month after he was announced as a hire, is the latest in a string of executive departures at Moderna — a company that has grown rapidly during the pandemic on the back of its highly potent Covid vaccine.

In December, Moderna fired Chief Commercial Officer Corinne Le Goff after less than a year in office. This followed the departure of Tal Zaks, chief medical officer, last year and former chief financial officer Lorence Kim in 2020.

The string of executive departures and the manner of Gomez’s exit has reignited a debate about culture and leadership at Moderna, which has previously dismissed claims by former employees that they oversee a “caustic” work environment.

A former Moderna executive, who spoke to the FT on condition of anonymity, said the company’s culture had been defined by Chief Executive Stéphane Bancel, who was results-oriented and could be ruthlessly critical of people who didn’t meet his expectations.

“I think this episode gives us a rare glimpse into a company that historically has had a problematic culture and needs to use that self-learn to become a truly successful company.”

Moderna said the company transitioned from an R&D organization in 2019 to one that had a commercial product in 2020, according to a statement.

Critics warn that Moderna’s board’s inability to monitor potential issues at Dentsply during Gomez’s due diligence — a process commonly performed on all newly hired C-suites — for weaknesses in corporate governance systems suggests.

Cindy Schipani, a professor of business law and an expert in corporate governance at the University of Michigan, said there is a governance failure.

“The care that Moderna would have taken should have caught that,” she said. “Every board should carefully consider getting an individual who has both the right aptitude and high ethical standards and high competency,” she said.

ValueEdge Advisors, a firm that advises investors on corporate governance issues, said the incident represented an “outrageous” failure by corporate governance identified the design of its executive pay package.

Moderna rejects this criticism. The company told the Financial Times that Dentsply’s statement regarding Gomez’s departure was consistent with the departure of a bona fide employee and that due diligence checks on previous employers and individuals had not revealed any issues.

On Friday, Moderna said it would seek a payback if any findings of wrongdoing were made.

Moderna said it first learned of the investigation on May 10, and within an hour the chief executive officer, chairman and chief legal officer met and called a special board meeting for the same day to discuss the issue.

“At the meeting, the board determined that it was appropriate to separate Mr. Gomez from Moderna. Mr. Gomez was immediately notified of this decision,” Moderna said.

Some current and former Moderna investors told the FT the company showed determination by acting so quickly to remove Gomez.

Moderna first announced in a statement that Gomez on April 11. On April 19, Dentsply fired its chief executive officer, Don Casey, for no reason. Both Gomez and Casey did not immediately respond to requests for comment.

Gomez started at Moderna on May 9 and left the company on May 10, when Dentsply announced it had begun an investigation in March into allegations that former executives used incentives to meet salary targets for Executives ordered in 2021.

Moderna issued a formal statement regarding Gomez’s departure on Wednesday the 11th.

“For me, it wasn’t a hiccup but an example of the company making a decision very quickly,” said Julia Angeles, an investment manager at Baillie Gifford, an early investor in Moderna, which owns 11.3 percent of the company’s stock.

She said Moderna’s management couldn’t have done anything differently because they were unaware of the Dentsply investigation.

“The clear signal is that they want people they can trust 110 percent. . . for me it was a manifestation of their values [Moderna management] and that they mustn’t waste time on any little mistakes.”

Brad Loncar, a biotech investor who doesn’t own Moderna stock, said it was “bad luck” and not a sign of a bigger problem at Moderna.

“Whoever is the search company that helped with this – I assume they used one – really has balls in their faces. You never want to create a negative headline for a customer,” he said.

Moderna declined to comment on whether it used a search firm in the case.

“The sad truth is that executive searches are often poorly executed with little or no consideration for succession planning beyond the CEO,” said Shawn Cole, founding partner and president of Cowen Partners, an executive search firm.

He said that more due diligence is often required at the C-suite level because the risks of failure are too high. “We treat reference checks like the FBI,” he said.

Most analysts said the loss of Gomez was a temporary setback rather than a major blow to the company, as former Moderna CFO David Meline has agreed to stay on temporarily while a new search is conducted. Of more concern is the rapid turnover of executives at a time when the company must deliver on its promise to use messenger RNA technology to revolutionize medicine, they said.

Moderna said it is dedicated to advancing mRNA science and continues to attract top talent. “Our commitment to a science-driven and innovative culture is widely recognized; we are regularly considered one of the best employers and a top employer,” says the company.

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