A CEO is entitled to a love life. But when it involves someone at work, things get very dicey very fast – for the CEO, for the employee and, if handled badly, for the company.
That said, there’s a reason the idea of a CEO marrying his secretary is cliché. Chief executives do find partners at the office – and not just at the assistant level.
Johnny C. Taylor, Jr., CEO of the Society for Human Resource Management (SHRM), said he once asked a roomful of CEOs how many had ever dated someone at work and about 70% raised their hands.
But in today’s corporate world, especially in the wake of #MeToo, boards are on high alert for anything that poses a reputational or financial risk to the company.
At the end of October, McDonald’s CEO Steve Easterbrook abruptly resigned from his post for having what was described as a consensual relationship with an employee. The board said Easterbrook “violated company policy and demonstrated poor judgment.” Easterbrook himself said in an email to employees that having the relationship was “a mistake” and that he agreed with the board’s decision.
Nothing more is publicly known about his relationship other than it was described as consensual.
But even in a best-case scenario – where the CEO and the employee are both consenting, unmarried adults who don’t have any direct dealings with each other at work – that can still pose problems.
There’s no controlling others’ perceptions
Being in a relationship with the boss will make others at the company suspect that favoritism is at play. And that will undercut the employee’s professional accomplishments and reputation.
“It also undermines the idea of meritocracy and the idea that everyone has a fair shot,” Taylor said.
Love gone bad is a potential lawsuit gone wild
If a romance between a CEO and an employee sours, it may come out that the relationship wasn’t as consensual as the CEO thought.
“Ultimately, many of them that begin as consensual end up as complaints of harassment,” said Cari Dominguez, a former chair of the Equal Employment Opportunity Commission and a board member of the National Association of Corporate Directors, in an e-mail.
That, of course, creates legal problems for the CEO and the company.
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Some company policies won’t outright prohibit relationships between executives and subordinates. But they are likely to classify them as potential conflicts of interest subject to review by the board, Taylor said.
In that case, both the CEO and the employee would be required to disclose that they’re having a consensual relationship. That puts the employee on record as saying it’s consensual, which can undercut any potential claims to the contrary later.
What if the relationship is the real deal?
Love scoffs at rulebooks. If a relationship between a CEO and an employee is serious, and they’re not willing to give it up, it might make sense for the employee to leave the company, Taylor said.
That may not be ideal. But it’s less than ideal when a CEO dates an employee in the first place.
And it may make more sense than risking the board giving the boot to the CEO, tarnishing the employee’s reputation and creating uncertainty about the company’s leadership.
“There are tradeoffs once you assume the role of CEO. It’s about choices,” Taylor said.