Should CEOs be fired over sex scandals?

The business sector is no stranger to the types of revelations now coming to light about David Petraeus.

By Bruce Kennedy Nov 13, 2012 3:56PM

How the mighty have fallen. The ongoing sex scandal now unfolding around former CIA Director and US Army General David Petraeus has a lot of resonance in the business sector.

A former assistant to Waffle House CEO Joseph Rogers Jr. recently filed a police report against him, accusing him of forcing her to perform sexual services in order to keep her job.

Rogers' imbroglio was just the latest in a series of workplace scandals involving some top company executives.

Some other examples:
  • Christopher Kubasik, who was scheduled to become the CEO of Lockheed Martin (LMT) in January, resigned earlier this month after investigators discovered his "close personal relationship" with a company subordinate, violating the company's ethics code.
  • In April, consumer electronics chain Best Buy (BBY) CEO Brian Dunn stepped down after acknowledging an inappropriate relationship with a 29-year-old female employee. Dunn left the company with a $6.6 million severance package.
  • Also in April, Kenneth Melani, CEO of health insurer Highmark, was dismissed for repeatedly lying about an affair he was having with a woman he hired. Melani also had assault and trespassing charges filed against him after he got into a brawl with the woman's husband.
  • In February, medical device maker Stryker (SYK) fired CEO Stephen MacMillan. The married-but-separated MacMillan had received permission from the board to date a female employee as long as she resigned. But he still got fired when some board members suspected the relationship began earlier than he led them to believe.
  • In 2010, Hewlett Packard (HPQ) chairman and CEO Mark Hurd was forced out of the company after sexual harassment allegations were leveled against him by an outside contractor. Hurd walked away with cash and stock worth an estimated $34 million.
  • In 2005, Boeing (BA) CEO Harry Stonecipher resigned after an affair with an employee. Stonecipher left the company with $11 million in Boeing stock.

So should consensual affairs cost company executives their jobs?Image: Couple holding hands (Corbis/Corbis)

Clinical psychologist Wendy Walsh says no, unless the parties involved are violating an employee contract or threatening national affairs.

"People at the office have sex all the time," she said in a CNBC interview. "And if they're peers and we're not talking about a power dynamic where a boss is probably over-using too much power with an underling, then it's perfectly OK. It has nothing to do with employment; it has nothing to do with breaking the law. It has to do with human relations, and that's for his wife to deal with." 

But Newsweek and Daily Beast columnist Daniel Gross disagrees. For a lot of companies, he notes, workplace affairs can be become a legal issue.

"They have stated policies that say you cannot have these types of relationships," he said on CNBC. "It opens them up to sexual harassment claims, to discrimination claims. It's quite bad for morale as well. And when you go to work somewhere, they make you sign papers saying that you will adhere to the policy on document preservation and on the use of your phone and on the travel policies. This is one in another, one in a long series of policies that people adhere to. In the case of Lockheed Martin, there was an explicit policy against this."

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Nov 13, 2012 5:08PM
Sorry guys, that's why they pay you the big bucks; to conduct yourselves like leaders.
Nov 13, 2012 4:55PM
Wrong is wrong.  It always matters.  It always hurts.  It always erodes trust.  At the very least, a leader's sexual indiscretion casts serious doubt on his judgment.
Nov 13, 2012 6:17PM
If CEOs are going to be fired for having affairs with employees, shouldn't the president?
Nov 13, 2012 6:07PM
There is a difference between just a consensual affair and one with a coworker/subordinate.  A consensual affair between two adults that does not effect the workplace should not be cause for dismissal.  What happens in someone's bedroom should not be anyone's business in the public.  That would be between a husband, wife and third parties.  Its not that I "approve" it just isn't anyone's business.  However, when you put it out there that the person is a subordinate (could feel intimidated into it) or a coworker (still could effect the general atmosphere at work and make others uncomfortable) then there is a bigger issue.  That could effect your job.  Maybe the person sleeping with the boss gets a promotion over someone else who deserves it more.  Then they have to go.
Nov 13, 2012 5:02PM
If a company CEO is involved in an extramarital or inappropriate activity, this makes the company look bad.  If the company looks bad, this could make the public wonder what else is going on that hasn't  been reported or discovered yet.  Therefore, better for one to go now than more later. 
Nov 13, 2012 5:03PM

They usually don`t get fired unless their stock is down.Jack Welsh keep his job because the

GE was doing well.How does the current GE CEO keep his job?

Nov 13, 2012 6:21PM
I remember a CEO of sorts named Clinton  dilly dallying with a young intern and he wasn't fired
Nov 13, 2012 8:17PM
If I'm abiding by a company's code of conduct, the CEO should as well. Funny how these CEOs act like sports stars, movie stars, and musicians. It's ok for them, but not for me. Maybe legal departments and loss prevention departments should look upward instead of downward.   
Nov 13, 2012 7:21PM

When a CEO and  an employee get caught with their pants down then everybody in the company thinks it's OK to follow suit. The big risk for the CEO is that when the relationship goes south he sets himself up for blackmail, getting a divorce with a big payday for the EX and reducing his status to a smuck. Relationships in the work place are on going all the time, but the real question here remains;

Is the fling worth losing your job and family?

Nov 13, 2012 8:38PM

Yes they should's called "Inside-her trading"



I think affairs are personal matters between couples involved, it should not cost a person their job or position as long as it's not effecting their job performance. If it is then yes, if it isn't then let them keep working. Let them settle their personal business on their own time.
Nov 13, 2012 11:51PM
Absolutely they should be fired. They should not be allowed to use their positions to get sexual favors from female employees.  When they make themselves available for extra marital sex they put pressure on the female employees under their supervision to perform for them.  If a female employee refuses the advances of the CEO she can jeopardize her career.
I disagree, Look at President Clinton, he left us a zero deficit when he left office. Yes he cheated on the first lady but he was one of the best presidents we've had in a long time as far as doing his job. I think affairs should be handled by those involved in private settings. How ever if a person is fulfilling his job requirements in an excellent manner let him stay on the job.
Nov 13, 2012 6:39PM
Liability-wise, it's very stupid even if consensual.  However, Bill Clinton didn't lose his job, so why should anyone else.
Nov 14, 2012 7:30AM

Don't you think the real question here is-- Why do we still recognize the CEO position? The CEO was a position bestowed on the Founder who needed a lesser hands-on position to let the President run the business, just not run the business into the ground. Somehow that transitioned into a real role held by lesser and lesser qualified people. How can you have "talent" if you never started up a business that is successful? In short, how can there be CEOs who aren't Founders? Sex scandals? Isn't that the credo of a wierdo who has inherited something they don't respect and leverage to their whim and wish?


GET RID OF THE CHIEF EXECUTIVE OFFICER ROLE, restore responsibility in business.

Nov 14, 2012 7:54AM
Some women, not all, will do many things for preferential treatment. From restaurant managers to big time CEO's, there are employees, both sexes, that will hit the sack for the right schedule, the right raise, the right position. Thing is that once you have sex with an employee----they got you. If you're married you're done. If you're single, you can just say---- what the hell. They have something to hang over you that can be used again and again for a lot of things. All of the sudden, the powerful become the powerless and so it starts? " Fatal Attraction" should have made a lot of people think what a 1 night fling could turn into. To me, a little bit of pootang isn't worth all that. 
Nov 14, 2012 8:07AM

I am more concerned about firing CEOs that outsource jobs to India, China, Korea, mexico, etc., etc., etc,


I could go on with the etc's but I think the point has been made.



Nov 13, 2012 7:08PM
Disagree with the "expert", Wendy Walsh.  Today the employees are "peers".  In the future, one of them becomes the boss and either favorably treats the lover or retaliates against the "ex".  If it's a boss-subordinate affair, it's unfair to the the subordinate lover's peers.  Bonuses and raises are going to be higher for the lover (whether or not earned) and may be at the expense of the lover's peers.  I know from personal experience.  My ex works for IBM as a manager and had an active affair during the time performance evaluations, raises, bonuses and stock options were being distributed.  The lover was, according to previous managers, average but my ex gave the lover high bonuses, raises and stock options.  Yes, it's common in the workplace, even at companies with rules against it.
Nov 13, 2012 8:18PM
Help me to understand. If you are a ceo, male or female, you should be sexually inactive? Is it okay to be gay if you are a ceo? How about masturbation?  IF IT'S BETWEEN TWO CONSENTING ADULTS THAT DOESN'T BETRAY A TRUST AS IN MARRIAGE ,OR COMPROMISE SOMETHING LIKE NATIONAL SECURITY, IT IS MY OPINION THAT IT'S NOBODY ELSE'S BUSINESS.

Advise them that they need to clean up their act, or there will be more drastic matters taken if it happens again. Put them on probation period. If they screw up again then fire their ****!


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