Paul Deegan: Dismissal of Royal Bank CFO is no run-of-the-mill firing

financialpost.com:

by Paul Deegan   

When corporations have bad news to deliver, they often put it out late on a Friday.    

That’s exactly what Royal Bank of Canada, the country’s largest company by market capitalization, did  when it announced “changes to its executive team” in a press release that landed this past Friday at 6 p.m. ET.   

Below the innocuous headline, the release declared that the bank’s now former chief financial officer had allegedly engaged in “an undisclosed close personal relationship with another employee,” that the employee received “preferential treatment … including promotion and compensation increases” and that two individuals had been terminated as a result.  

Though RBC did not elaborate on the nature of the relationship, in any large organization you can find countless examples of “close relationships” between employees, often in the form of office romances.   

But other organizations considering how to address such potential conflicts should exercise caution when looking to apply this example, which involves a rare set of circumstances.   

First, RBC notes that “allegations” were made, leading the company to launch an internal review, while engaging outside legal counsel. The person or persons who made the allegations have no doubt been closely watching how the bank is handling the issue, and could potentially go public if it was not addressed to their satisfaction.    

Allegations can come from anywhere: from an angry and aggrieved party — a spouse, an ex-lover, or an employee who feels they were passed over for a promotion or increase in compensation — or from someone who is simply appalled by the misuse of corporate assets and/or behaviour. And the more senior you are — the bigger the target on