Subscribe to enjoy similar stories. Having a romantic relationship with an employee didn’t used to be a fireable offence for CEOs. They would get canned for misappropriating funds to fuel the affair, or for not fully disclosing the details to the board when they eventually got caught.
But it was rarely the relationship itself that got them fired—if they even got fired at all. It was part of the trade-off corporate boards seemed willing to make. If you wanted a charismatic and creative CEO, then the thinking went that you needed to accept the boundary-pushing, big ego, aversion to rules—and occasional indiscretion—that could come along with it.
But in the last few years, boardrooms across corporate America have recalculated whether they should be taking these kinds of ethical lapses as a warning sign of bigger problems. For the latest proof point, look at Norfolk Southern Corp. Last month, the railroad ousted then-CEO Alan Shaw for violating its policies by having a consensual relationship with the company’s chief legal officer, Nabanita Nag (who was also fired).
Norfolk’s strict no-tolerance stance about office relationships with subordinates shows just how seriously companies have come to take this type of CEO misconduct. Despite the backlash against #MeToo, this is an area where the movement’s impact has stuck: Boards now grapple with the question of what consent really means when there’s an innate imbalance of power. But it’s not just the cultural shift that’s driving the crackdown on executives’ dalliances.
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