Nestlé immediately dismissed its CEO, Laurent Freixe, for not disclosing a romantic relationship with a subordinate, the company announced Sept. 1. This news comes barely a month after tech company Astronomer’s CEO was caught on the big screen at a Coldplay concert with his arms around the company’s chief people officer.
“Boards won’t put up with this,” Andy Challenger, workplace expert and chief revenue officer for global outplacement and executive coaching firm Challenger, Gray & Christmas, said in an emailed statement. “Once an unethical romantic relationship is uncovered, CEOs tend to lose their jobs.”
Workers may not be surprised; 75% of those surveyed by Zety said extramarital affairs between executives are “very common” or “somewhat common.” Additionally, 1 in 6 said they were aware of or suspected an extramarital affair between executives at their own companies.
While workplace relationships are common and typically allowed, Challenger continued, companies should require disclosure for any relationships between managers and subordinates to watch for risk of conflict, such as favoritism.
CEOs — typically one of the faces of an organization, Challenger noted — often face stricter prohibitions on such relationships due to the power they hold: “[T]hat dynamic makes romantic relationships, even among peers, untenable for many organizations.”
Those surveyed by Zety described the pairing of CEO and head of HR as “the worst possible pairing,” particularly for issues of impropriety at the corporate level.
The exact position of the subordinate in a relationship with Nestlé’s Freixe was not disclosed.
Experts previously told HR Dive that such relationships, when revealed, can erode trust and invite doubt into numerous decisions. Questions about ethics at the top could also indicate similar issues in middle management, experts said.
However, boards are much more likely to remove CEOs for sexual misconduct rather than consensual relationships, according to Challenger’s data. Since 2016, 40 CEOs have been ousted due to misconduct, though those departures have fallen steadily since 2017, the analyst firm said. Comparatively, only 14 CEOs were removed due to an “inappropriate relationship” during the same time period.
“Sophisticated companies lean heavily on maintaining professional ethics in their operations,” Challenger said. “The standard set for company behavior comes at the top, and creating safe environments that foster innovation, creativity, and progress require that standard to be met.”
