Return to office brings CEO relationships with employees back to forefront

Office romances set to become more visible

Author of the article:

Bloomberg News

Jo Constantz and Jeff Green

Published Sep 15, 2023 • 4 minute read

BP’s CEO Bernard Looney resigned this week after admitting he had not been “fully transparent” about historical relationships with colleagues. Photo by Daniel Leal/AFP via Getty Images

The resignation of BP PLC chief executive Bernard Looney marks the latest in a small but high-profile list of corporate leaders who have run afoul of company policy related to relationships with subordinates. As more workers are in the office again, such relationships are likely to become more visible.

“It was easier to keep the workplace romance a little more discreet when everyone was in lockdown,” said Amy Nicole Baker, a psychology professor at the University of New Haven who studies workplace romantic relationships. “Now that people are transitioning back to the office it might look like there’s more workplace romance, but now it’s just simply more public.”

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BP said that its board reviewed allegations relating to Looney’s past personal relationships with colleagues in 2022, finding no breaches of the company’s code of conduct. Further allegations of a similar nature were received recently, after which Looney informed the company that he hadn’t been fully transparent with the previous investigation, the company said.

The company doesn’t prohibit executive relationships and it’s unclear if any of Looney’s recent revelations put him in violation of company policy. The new interim CEO, who also serves as chief financial officer, is in a relationship with another BP employee, a company spokesperson said this week.

Companies rarely explicitly mention improper relationships when a CEO is fired or resigns. Key exceptions include dismissals of chief executive officers such as Steve Easterbrook, who was fired in 2019 by McDonald’s Corp. after a consensual relationship with an employee, a violation of corporate policy. Or Intel Corp.’s Brian Krzanich, who resigned in 2018 after allegations he failed to disclose a past consensual relationship with an employee. A decade ago, allegations related to company relationships toppled the CEO at Best Buy Co. and an incoming CEO at Lockheed Martin Corp.

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The office affair didn’t go away during the pandemic, Baker said. In fact, in many cases it flourished. Last year, 33 per cent of U.S. employees said they’re currently involved or have been romantically involved with a co-worker, up from 27 per cent pre-pandemic, according to research from the Society for Human Resource Management.

“People were still interacting, they were just doing it virtually,” she said. While the modality may have shifted — texting during a Zoom call, perhaps, instead of striking up conversation by the water cooler — all the psychological reasons people fall in love at work haven’t changed, Baker said.

Even when people try to hide it, these kinds of relationships almost always are brought to light, Baker said. “The instinct is, ‘This is my private life, I don’t want anyone to know, I’m not going to discuss it.’” There may also be a thrill-seeking dimension to wanting to keep the relationship secret, she said. For others, it’s just hubris.

CEO ousters for any sort of alleged bad behaviour are a rarity in the first place, according to data from Exechange.com, which has tracked CEO departures for companies in the Russell 3000 stock index since the start of 2017. Among more than 1,900 departures since then, only 35 included referenced accusations of CEO of misconduct, and usually without a specific description. In only four of those instances, which included Easterbrook and Krzanich, did the company mention a relationship with an employee as a reason, the data showed.

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The recent high mark for CEOs exiting over alleged misconduct was in 2018 when the business world had its reckoning as part of the #MeToo movement against sexual harassment, according to the data. Hundreds of executives, including more than a dozen CEOs at large public companies, lost their jobs for alleged misconduct. That’s about the same as the dozen or so CEOS reported in 2020, 2021 and 2022 combined, as many workers were still at home, according to Exechange.com data. The company tracked three misconduct firings this year, none of which appeared related to a relationship. BP isn’t in the Russell 3000, so it isn’t counted in the data.

“There’s not a ton of transparency for finding out the real reason a CEO leaves,” said Kabrina Chang, associate dean for equity, diversity and inclusion at Boston University’s Questrom school of business. “Perhaps one of the reasons this is making so many headlines is because we now know why a CEO of a multinational, multi-billion-dollar company is being asked to leave. And I do think people are always going to look for the salacious element.”

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Looney appeared to mislead the board, which goes beyond just the relationship into areas such as responsibility and trust, Chang said. CEOs would be hard-pressed to say they weren’t aware of the consequences of bad behaviour. Corporate ethics codes grew by almost 1,800 words from 2008 to 2019, according to research conducted at Notre Dame University. Yet CEOs often fall victim to what is known as “bounded ethicality” where an executive tries to rationalize decisions by looking at it very narrowly, Chang said.

Even consensual relationships with subordinates can exhibit a dangerous pattern of behaviour for the corporate world, said Davia Temin, founder of New York crisis consultancy Temin and Co., which tracked executive firings at the height of the #MeToo era. Hiding questionable behaviour shows poor leadership skills and risks of other problems.

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“It is always easy for leaders to think that the rules don’t apply for them,” said Temin. “With MeToo, there was a whole wave of activity that was spawned. That wave has slowed down but every so often there’s going to be a resurgence. And that will remind everybody you have to toe the line.”

— With assistance from Ella Ceron, Matthew Boyle and Laura Hurst.

Bloomberg.com