It might seem like CEOs are always getting in trouble for dating subordinates. But it's actually pretty rare for a company to explicitly fire them for it.
Thursday's ouster of Alan Shaw as Chief Executive Officer of Norfolk Southern is just the seventh time since 2017 that a large U.S. company has said it pushed out its top boss for an office affair, according to data from exechange.com, which tracks CEO departures for businesses in the Russell 3000.
"Cases in which CEOs have to leave because of personal relationships with employees are always spectacular and naturally stimulate people's imaginations," said Daniel Schauber, founder of exechange.com. "This may explain why such cases are remembered by the public for a long time."
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Atlanta, Georgia-based Norfolk said it terminated Shaw after an investigation found he violated company policies by engaging in a consensual relationship with its chief legal officer. His departure added to a record year for CEO ousters.
Fewer than 2% of CEOs have been shown the door because of misconduct issues since 2017, when exechange.com began tracking the data, Schauber said.
McDonald's fired top boss Steve Easterbrook in 2019 for having a consensual relationship with an employee, and Intel removed Brian Krzanich as CEO in 2018 after allegations he failed to disclose a past consensual relationship with an employee. Outside the U.S., oil major BP's Bernard Looney resigned as CEO last year over failure to fully disclose past relationships with colleagues.
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Rules for office romances remain mixed, with about a third of workers saying their company required disclosure of workplace romances and about 44% saying the company didn't, according to a Society for Human Resource Management survey released this year. About 17% of workers said they are currently in a workplace romance and about half of those said they told their manager, the data showed. Another 41% recounted having a past office romance.
It's not good practice for executives — and especially CEOs — to date subordinates, regardless of company policy, said Kabrina Chang, who teaches courses on business ethics at Boston University's Questrom School of Business. Even if they don't get caught by their bosses, coworkers often know, and it sets up resentment and the appearance of special treatment, she said.
"So much of management is about the tone from the top," Chang said. "The CEO is the public face of the company, for better or worse."
