I'm a CEO of a mid-sized company (40 employees). I tend to get along with most people and since the company is small, I have conversations every so often with new hires and interns. I don't mind talking to new hires and interns about non-work related stuff (like sports, what they did over the weekend, etc.)

I'm fairly young (my age is closer to university interns than it is to managers and supervisors). The problem is: Sometimes when new hires and interns have a team-related issue, they come straight to me rather than speaking with their manager or their manager's manager first (maybe because they are more comfortable speaking to me about it). I normally tell them to raise the issue with their manager and if the manager feels like it needs to be escalated, then he will escalate it.

Recently, a new hire had what he characterized as racism issues in his team. He felt that he was being treated unfairly because of his race and felt that people did not like him as much because of it. He came straight to me to report the issue (not his manager nor his manager's manager). I told him what I normally say: "That's an issue which definitely needs to be addressed. It's good that you brought it up. I strongly recommend you take it up with your manager first. If your manager does not take action, or if he does not escalate the issue, then let me know, and I will deal with it".

The employee immediately thought that I was ignoring the issue and that I don't see it as a big deal. Since I didn't deal with it and asked him to take it up with his manager, he assumed I didn't care.

In another case, the employee agreed to take it up with his manager. He literally went, told his manager about the issue and then came straight to me (a couple minutes after) and said 'I took it up with the manager. I was wondering if you (me) can do anything about the issue now?' They need to give their managers a chance to deal with something the managers should be dealing with. I'll speak to the employees about non-work related stuff, sure, but they take this as a 'Oh, the CEO will deal with all my issues'.

Situations like these come up quite a bit (when employees come straight to me with an issue). I understand I may be easier to talk to, but managers should know about and should be given the opportunity to deal with issues of members in their team.

How do I prevent people from coming straight to me with issues before even going to their manager? Or their manager's manager?

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    Are you really sure people trust their managers? Commented Apr 3, 2015 at 8:00
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    @devouredelysium I want to add to this: the employees also probably see the CEO more as a friend rather than a CEO. I applaud the fact that employee and employer both want a good (and informal) relation, but this also causes my aforementioned "problem". A manager supervises his department, a CEO supervises his managers. When the company grows you most likely have no time for these informalities (sadly). Commented Apr 3, 2015 at 9:07
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    As a side-comment, you also need to figure out whether employees involving you directly is more a good sign that they have confidence in you, or a negative sign that they don't in their manager, or that there is a general lack of process and confusion about who owns what. Sounds like your company doesn't have any effective HR - does it?
    – smci
    Commented Apr 3, 2015 at 9:37
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    The guy who went reluctantly to the manager and came back to you within minutes clearly shows you the problem: your managers are useless. Employees see them as an obstacle, and not as people who can solve problems. The employees see you as being capable of solving their issues, so naturally try to get around all the garbage you have placed in their path in the form of managers. "You want me to contact manager? Fine, I got that out of the way. Now can we solve the problem?" seems to be the message. Get rid of all the useless managers, and bring in good ones.
    – Masked Man
    Commented Apr 3, 2015 at 16:42
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    If you have a 40 person company and these issues come up often enough to be annoying, perhaps it's time to take a look at your managers and determine why these issues keep coming up and why employees feel that they can't trust two levels of managers to deal with their issues. Since you sound young enough to not have a lot of experience as CEO, you might bring in a management consultant to look at your management style and company management procedures - a discrimination lawsuit can be very expensive to defend, so a little money spent now may save much more in the future.
    – Johnny
    Commented Apr 3, 2015 at 19:40

10 Answers 10


As soon as an employee approaches you on their "issue" go with:

You, "Is this a problem with your manager?"
Them, "No."
You, "Well, you should know that I have full trust in Sally or she wouldn't be a manager. If you really want to go around her then I'll tell you right now that the answer is no. Sally might have a different perspective so I suggest you start there."

Essentially - shut them down immediately. If it persists then put them on an improvement plan while carefully spelling out the behavior.

Now, at the same time you need to make sure that you aren't directly assigning those people tasks. That's what your managers are for. If you are bypassing your managers, then your employees will do the same.

This next part you handled about as wrong as possible:

The employee immediately thought that I was ignoring the issue and that I don't see it as a big deal.

He's right. You did ignore the issue and certainly didn't handle it the way that a number of court systems believe you should.

When an employee decides to report discrimination or harassment then you need to take immediate action. Don't push them back to their manager. Instead, immediately get HR involved. If you don't have HR, get another C level and sit down with this person. If the problem is not directly related to the manager then make sure you bring the manager into this impromptu meeting between you, the employee and HR/other management.

Hear them out and take copious notes. When it's done, call your lawyer and ask them how to handle it. Don't start talking to anyone the employee has leveled accusations against at this point, seriously, call the lawyer first - they will know what to do. As a matter of fact, if I were you I'd be on the phone with my lawyer as soon as humanly possible to tell them what happened between you and the employee and ask for guidance on how to proceed.

At 40 people you are rapidly approaching a company size in which employment lawsuits are more likely to be leveled against you, and these can be incredibly expensive. Some of these will have no basis in fact, others might very well be true, but each has to be handled quickly and correctly or they will escalate beyond the point of repair.

Update: about the lawyer..

A company that has 40 employees has enough funds to keep legal on retainer. Presumably this company has already engaged with a decent law firm to handle everything from establishing the corp on up to reviewing the employee handbook as well as reviewing various contracts. So picking up the phone to ask them what to do should be a very inexpensive call. By that I mean less than $1000, depending on legal's hourly rate.

That amount of money is trivial to what a botched harassment claim could cost. Further, given the OPs description of the handling, it is apparent that he doesn't have an HR manager or really anyone in a position to give proper guidance on what to do. This isn't something you should just google or ask anonymous people on a website about.

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    Also, and I know this risks infuriating the anti-PC brigade, the questioner putting "racism" in inverted commas isn't going to make people think he takes it seriously. Maybe the person making the complaint was incorrect, and there was no discrimination, so in fact it wasn't a racism problem and snigger quotes are justified. But to conclude that when you've decided not to investigate is... um... not best practice. Commented Apr 3, 2015 at 14:54
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    Calling a lawyer ASAP will just rack up fees, frustration and waste copious amounts of time. Unless the OP has a retained "legal department" this is not practical advice.
    – teego1967
    Commented Apr 3, 2015 at 16:23
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    @teego1967 If the OP has no process yet for handling discrimination or harassment complaints he's going to want to make sure the process he takes is legally sound or he risks complaints turning into lawsuits - which is a whole lot more expensive, frustrating, and time consuming. Commented Apr 3, 2015 at 16:41
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    @teego1967 The cost of a couple hours of attorney time is peanuts compared to what a big lawsuit could cost if you don't take the right steps. Going to an attorney is not only the right move, is the financially prudent one as well.
    – Nick2253
    Commented Apr 3, 2015 at 17:08
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    @teego1967 I think I'd modify the reason for calling the lawyer first - if a complaint like this comes up in a company of this size and you don't already have a standard process in place for handling harassment/discrimination issues, THAT is why you need to call a lawyer first: to get an approved process in place! Even if the issue is minor and easily handled, it's a big huge warning omen that you need to get your company prepared because there will be issues in the future and you need to make sure they are handled well early. Ounce of prevention being worth a pound of cure, and all that.
    – BrianH
    Commented Apr 3, 2015 at 20:36

I think we all agree that @NotMe has a great answer. I just wanted to address one thing I think also needs to be considered.

Your employees are showing an extreme level of distrust in their direct management. I say this because you said things indicating that you sent the person back to the manager like you always do. If you have, as a CEO, had to do this more than 2-3 times, then something is wrong at the management level. They know you don't want them to go to you first and they still do. This needs to be fixed, and it can't be fixed just by sending them back to talk to the person they don't trust. You need to investigate why your managers are so unapproachable and fix that or get better managers.

As you personally walk around the office, observe their behavior around the employees. Do they dictate rather than ask? Do they close themselves off in offices with the door shut? Do you see any casual interaction between the two groups? How do they greet people when they come in?

I think you need to talk to the managers about this trend. You and your managers need to figure out how can they gain the employees trust. If the CEO is more approachable than the managers something is very wrong in management land.

Ask them if they are having one-on-one meetings with their emplyees. Ask them how they repsond when an employee comes to them with a question. Set your expectations for how they should behave with employees and how they should handle problems. These people are your direct subordinates and nothing in what you said indicates that you have even told them that they need to fix their behavior.

They need to understand that you as their boss do not consider it acceptable for them to be aloof or intimidating. You need to tell them what about their performance is troubling you and what they need to fix. You need to start managing your own subordinates.

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    Also, if the CEO and management are approximately equally approachable, and the employees haven't yet developed a proper sense of the structure of the company and what the CEO wants to be doing with his time, then their instinct might be to pick the person with the most influence for big issues. Their instinct is wrong, and CEO and management need to fix it: even if the CEO is approachable they should be judicious in approaching him. But there is at least a chance the problem isn't "all your managers are horrible and nobody wants to talk to them about anything ever" ;-) Commented Apr 4, 2015 at 12:20
  • Great bit about how to get managers involved in the issue.
    – NotMe
    Commented Apr 6, 2015 at 16:16
  • I honestly believe this is the key to effective management, and cannot see (most of) the accepted answer being used effectively whatsoever. If you have an open door policy, keep it an open door, not shut them down when they take advantage of what is available. That will only serve to alienate employees and keep you from being in tune with the company. Have your managers manage effectively, and they won't NEED to come to you.
    – Anoplexian
    Commented Apr 11, 2016 at 22:34
  • As someone reading this answer as an “employee” in the question’s scenario, I can’t agree more that the problem here is with the managers. Where I work: shut up in an office-check. Only concerned with results/achievement-Check. Untrustworthy, ineffective, biased, incompetent-check check check check. Don’t get me wrong, I like some of them as people but it doesn’t change the fact that they suck as managers. I went to a vp with a similar complaint (sexism) and she just pushed it back to the managers that ignored it in the first place. Sucky managers suck the life out of employees and the company
    – Jax
    Commented Sep 12, 2019 at 2:00

I would sit down with him and his manager. For two simple reasons:

  1. If there is racism at a company of your size it could end up causing you a lot of time and money and you want to nip this right away. You need to figure out how serious these claims are and make sure that your attitude towards any racist act will be severe punishment/termination. The only way to figure out how serious the issue is, is to talk to both employee and manager at the same time (given that it isn't the manager).

  2. You need to make sure that the employee understands that you are not his escalation point or sounding board. I would go as far as saying something to the point of, "Don, racism of any kind will have zero tolerance here. I will deal with that right away. At the same time I am very disappointed that you did not report this to the proper channels first. I would expect you to take any issues to your manager so that this can get to me as soon as possible. I really hope we don't have this issue again." Given that you make these sort of statements a couple of times, word spreads quickly at a company and you will no longer have the issue. By saying nothing, everyone with a problem or idea may come straight to you.

  • 3
    "I really hope we don't have this issue again" sounds like you don't want him to report harassment. Commented Apr 9, 2015 at 21:16

You should have said that yes, you are asking the employee to deal with the manager but that you are keeping an eye on what's going on and if the employee fails to work things out with the manager, to immediately get back to you.

You are phrasing your response as a total handoff to the manager, and it is no wonder that the eployees have zero confidence in you - I would have zero confidence in you myself if I were in your employees' shoes. Act like you own some responsibility. The employee came to you in the first place because they have zero confidence in the manager. Unless you address the issue of lack of confidence in the manager head on, your handling of the employees' issues isn't worth a plug nickel. I don't send people back into the lions' den without giving them the confidence that I've got their back.

  • 2
    You might have missed this part: "I told him what I normally say: "That's an issue which definitely needs to be addressed. It's good that your brought it up. I strongly recommend you take it up with your manager first. If your manager does not take action, or if he does not escalate the issue, then let me know and I will deal with it"."
    – jcm
    Commented Apr 3, 2015 at 3:10
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    That's exactly the problem. What you told him sounds like a canned response that may SOUND like you care but really you're just politely saying "I don't have the time to deal with your issue, go bother someone else with it". In most cases you are justified in saying to, as a CEO you DO have better things to do than solve every employee's issue. In the racism case however, this is definitely something you want to be involved in, as per NotMe's answer.
    – Cronax
    Commented Apr 3, 2015 at 7:56
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    @jcm I didn't miss that part. In fact, my evaluation that this response is inadequate is the core of my answer. The OP should have said: "talk to the manager but know that I am keeping tabs. If you are still unsatisfied, get right back to me". The OP's response makes it appear that he is washing his hands off the issue. That may not be the OP's intent - to be fair, I don't think it was - but that's the result. Unfortunately, the only thing that counts in my world is results not intent. Commented Apr 3, 2015 at 10:30
  • ("eployees" -> "employees") Commented Apr 6, 2015 at 9:26
  • @jcm: The problem with that statement, even if this is an old post - if the problem wasn't with their manager, but they did go to the manager before, you could end up with them in a loop. Commented Apr 7, 2023 at 2:51

As you seem from a culture where there is little authoritative distance (dunno the English term for sure) an alternative approach is to just write a company wide mail about it explaining exactly what you just explained to us. People will understand this and at the same time it's a lot nicer than turning it into a 'you didn't trust your manager enough'-issue like one of the other answers suggested.

Try to prevent your company from becoming a huge bureaucracy and defining it in terms like 'official channels' and the like and instead just share your perspective. I know, it's not the deepest of answers, but if you learn to write emails like that without making them accusatory (a bit of a skill of its own, but if you're a CEO already you probably already learned that) it can allow an amazing work environment to grow.

  • this post is rather hard to read (wall of text). Would you mind editing it into a better shape?
    – gnat
    Commented Apr 3, 2015 at 10:46
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    @gnat 9 lines is a wall of text? And to whoever the downvoter is, please do understand that company culture is extremely localized, I am aware that this advice would be impossible in large parts of america for example despite being perfectly fine in for example a country like the Netherlands. Commented Apr 3, 2015 at 11:01
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    @DavidMulder: some people just like paragraph breaks, and they report struggling to read answers that don't contain any. The longest paragraph in the question in way longer than your answer, but nobody said that the question contains a wall of text. The blank lines get them good and warmed up, so they can take a run at a big paragraph in context but apparently not alone. Commented Apr 3, 2015 at 15:01

I feel you should have a meeting with all your employees and should explain the actual structure to follow

Employees->Manager->Manager's Manager-> CEO

and may be because as you said you are young and you discuss non-work related stuff they (Employees) are feeling more comfortable with you to discuss good and also bad I cannot say you should not be in this way but be hard to some extent and also tell your managers to be in the same way so that they (Employees) can contact manager's instead of you.


I suggest it is neither possible or appropriate to prevent employees escalating concerns to the CEO.

The CEO's obligation is to ensure frameworks are in place so employees don't feel the need to escalate everything. You have not met that obligation.

The first thing you need to do is ensure that their more immediate managers are equipped to handle concerns from their staff. That means selecting people for those positions appropriately (i.e. one of the criteria for appointing people to a position is whether they have or can be reasonably expected develop the necessary skills to deal with their people), ensuring they are trained appropriately (such skills can be developed in the right people, and training is also needed in specific areas such as knowing their legal obligations related to fairness, equity, and other things), and put a policy framework in place to support them (i.e. articulate how they are expected to handle concerns, when they should escalate concerns to their managers, etc). If they need particular advice (e.g. legal) they need to know how to access that advice appropriately.

The second thing is to have a process of inducting staff - both new recruits and people appointed to new positions - that informs them of their on-the-job obligations (i.e. what things they are expected to resolve for themselves), manners of behaviour (i.e. what is appropriate and what is not), who they are to raise concerns to in the first instance (i.e. their immediate managers), and what their alternatives are if their immediate managers does not effectively their concerns.

Both of the above need to be supported by regular and ongoing training. The training needs to include regular refresher (after all, even the best people need to be reminded of things and hone their skills) as well as to reflect changes of policy (after all, policy evolves as the organisation learns), changes of legal obligations (laws change with regard to how certain concerns should be managed).

In combination, all of the things above will ensure people know what their options are for handling and raising concerns, without having to come straight to the CEO. You need to put appropriate policies in place to allow all these things to happen, and ensure resources are provided to support them (e.g. for training, induction processes, etc). And you need to behave in a manner that is consistent with what your staff and their managers will expect.

Transparency and accountability need to be key considerations in the framework you put in place.

Part of all this is that you need to educate yourself about your legal and other obligations when people raise concerns to you. Your handling of the claim of racism, in a lot of places, has already been legally inappropriate.

When concerns are raised to you, the default response cannot be to just refer the person back to their manager. You need to start by asking questions. Has the person raised the concern to their manager? If the matter has been raised, what was or was not done, and why is it now being raised to you? Is their person happy for their manager to be brought into the discussion? Is the manager the cause of the problem being raised?

While it is not your responsibility as CEO to deal with every concern of every staff member, it is certainly your responsibility to put in place a framework so their concerns can be appropriately raised and dealt with. These things don't happen by magical means, and accountability flows upward. If you have not put the framework in place, it is your responsibility if staff routinely escalate things to you. If the framework is in place, some issues will still need to be escalated to you ... and you will need to ensure you are equipped to handle them appropriately.

  • Nice that someone chooses to mark down my answer, without any explanation as to why.
    – Peter
    Commented Apr 5, 2015 at 22:05

40 people is not a huge company, so one should expect that the CEO of such a small shop will need to get into details from time to time.

Unfortunately, the OP has cited racism as issue in the example he gave. I think that everyone can agree that things like accusations of racism and harassment are serious matters that would bubble up to the CEO anyway even in larger companies. For such grave matters, there is nothing wrong with the CEO getting involved and getting to the root-cause by talking with the accuser and his management and possibly even co-workers.

"Calling a lawyer" is certainly on the table as a possibility, but it should be a last-resort. People on stackexchange like to cite that as a reasonable action-- but in reality that only happens when things are intractable and even then frequently ends with unsatisfactory outcomes for everybody involved.

For many other matters that are more in line with day-to-day work, a terse instruction to follow the management hierarchy is totally appropriate.

  • 4
    My view is that, especially when running a company of 40 people, involving a lawyer is not what you do only when a dispute becomes intractable. You involve a lawyer to ensure that your processes meet your statutory responsibilities, which are serious. In many cases an HR professional can give you confidence that you're doing what the law requires without needing a lawyer, so that could also be your first stop. But it doesn't only matter that the people involved in the issue agree you're being reasonable, it also matters what the law says you must do. Commented Apr 4, 2015 at 12:25
  • ... I see this as just being similar to doing the accounts for a company of 40 people. Don't get by doing what you think seems reasonable, pay a freaking accountant to tell you what you need to do, and what you need a qualified professional to do for you :-) Commented Apr 4, 2015 at 12:27
  • The first reaction to everything should NOT be "consult a lawyer". I think most people who give that advice have never actually had to consult with a lawyer. At a minimum the OP should make an effort to find out what is going on and asses the situation personally. There is no replacement for that-- not even getting on the phone with a lawyer.
    – teego1967
    Commented Apr 4, 2015 at 13:13
  • 1
    Anyway, I think your assertion that one should wait until one has an intractable racial discrimination case on one's hands, before taking legal advice as to one's responsibilities as an employer, is not good advice. Getting one's company to 40 employees without any help from any lawyer would be quite the achievement, so chances are this won't be a new experience for the questioner. I spoke to three different lawyers just to buy a house, it's not a big deal and needn't take long. But as I said, an HR professional may well suffice, they'll tell you where in the process lawyers should appear. Commented Apr 4, 2015 at 19:06
  • @teego1967: Running a company requires legal advice; I know from experience. If you don't know what the law says - which is apparent by the OPs response to the allegation -then you have to get educated. A 15 to 30 minute phone call with your already established attorney is a trivial expense that will pay dividends in knowing how to handle this.
    – NotMe
    Commented Apr 6, 2015 at 16:07

Not Me's Answer is great on how to handle the issues with your current situation. However I would go a step further and institute some Chain of Command training and culture. I joined the military early in my adult life and because this was trained and drilled into us it helped understand expectations in corporations once I got out.

This is not something that is really taught in school, and not something that seems to make a lot of sense when you come out of an environment where students have been encouraged for 16 years to approach anyone on staff with any problems that they have.

So establish a fundamental Chain of Command Protocol training. Then work with your management to make sure they are focusing on and reinforcing this culture. It is never going to be perfect but right now you have young people with whom you have established a bond with and probably feel more comfortable talking with you about it than their manager. If you can at least communicate the expectations to them ahead of time this should help direct your employees to using the proper chain. And once the culture is established that going around the chain is counter productive it will be only the exception situations you need to deal with, which is as it should be.


In general the easiest way to get rid of the problem is that any complaints will be politely replied to showing great interest, but actually completely ignored or even effectively punished. But on the other hand this is a lousy way to run a company. If racism issues are reported and ignored, then this is a huge legal liability. If an employer thinks his manager is defrauding the company or violating his/her rights and your attitude is 'I don't want to be bothered', then whatever happens is YOUR responsibility. After all, YOU are paid to safeguard the company a lot more than the employee.

The best way to CYA(cover your ass) is to set a channel so that a) noone can blame you of not having one and being indifferent to issues that arise and b) you do not have to take the blame personally if this channel(say 'Compliance') does not effectively address the problem ('I did my job, but Compliance did not').

Of course Compliance will do what you tell them (i.e. if it is 'screw them', then that is what they'll do; if it is 'deal with it seriously and examine the accusations', then they will do that). Like I said ultimately it is a question of how serious you are about running the company. If you believe in sweeping the dirt under the rug, then all you need to do is CYA.


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