According to the article, Sacks discovered the issue in January, and then forced the company to report it to the California regulator - if you believe that sequence of events, he can't really be held accountable for the action of Conrad.

Let's say you are an engineer, take a new role at a company to work on their database, and then discover that one or your managers has stolen money, do you think you should be held accountable, assuming that you report the issue immediately when you discover it?

You're questioning the reality, when all of this is about perception.

The board needed to hold someone responsible for this mess in order to satisfy the regulators that they're taking the problem seriously, and things are different now.

Effectively, the message they want to send is that the adults are in charge now.

There was no way Conrad could stay. Even if they could somehow hide any evidence that he knew about the violations (and they probably couldn't), it's very clear from his public statements that he had built the fast and loose culture the had allowed and sustained the problems. He had to go and the message needed to be that the company has no place for him anymore. He's not stepping into a reduced role, he doesn't have a board seat, it's over, he's dead to us.

Sacks has a different record. He wasn't there from the beginning, he hasn't been the public face of the "ready, fire, aim" culture, there's plausible deniability. And he has credentials to justify his position - Yammer, Microsoft, PayPal - he can be painted as a safe pair of hands.

And, since he's been the COO for a year, he can step straight in an take over without needing a handover period from Conrad.

The board need Sacks to stay on and be the new face of Zenefits. And they've decided that the regulator investigations are not going to find damning evidence against him. Maybe because he had no idea. Maybe because he was smart enough not to leave any evidence. Maybe because there's a paper trail of him reporting the issues up the chain in way that makes him look like the good guy.

You're asking the question "How can a COO not know about all this stuff, and not have had some responsibility over it?" and that's a good and fair question - the regulators will ask it too. I take it the board will be able to provide a plausible answer to that question when the regulators come knocking.

But that's not really the #1 question that the board's worried about. They want to know "who has the best chance of saving this company?" And what Sacks provides is:

- Plausible deniability

- Credibility in the market

- Credibility with the regulators

- Knows the business

- Can do the job

- Ready to start now

There's no one else with those credentials, so Sacks needs to take the job.

Once that's decided it's a matter of execution - almost literally. If Sacks is going to save Zenefits then he needs to look innocent, and blame Conrad for everything. That might actually be true, but that's actually not the key question for the board. They just need something that they can sell to the market and regulators.

Thanks for taking the time to write that up. It makes sense from that perspective.

Not to say Sacks shouldn't be responsible but, to my understanding, all of these issues being reported on are coming out of the sales org (which is what Parker primarily focused on) where as Sacks primary focus as COO was on post sales customer success (product, ops, support, etc.)