CEOs Getting Canned for Office Romances

For a long time, CEOs could get away with having relationships with employees. But now, companies are taking a tougher stance. The railroad Norfolk Southern fired its CEO, Alan Shaw, for a consensual relationship with the company's chief legal officer. This shows how seriously companies now take executive misconduct. Research shows that these relationships can be a red flag for other issues. A study after the Ashley Madison hack found that companies with cheating CEOs were more likely to have financial problems. But there's a catch: these companies were also more innovative. So, boards face a tough choice: hire people who take risks, or people who follow the rules? And how does a company make sure their leaders are both creative and careful?

At Norfolk, Shaw was under a lot of pressure to save the company after a big accident. Despite this, he chose to have an affair with a colleague. This likely made the board question his judgment and whether he might cross other lines. So, they decided to fire him. This shows that even though boards want talented leaders, they also want them to follow the rules. And that's a good thing, right? After all, we want leaders who are both creative and trustworthy.

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