Already a Bloomberg.com user?
Sign in with the same account.
Lockheed Martin Corp
Best Buy Co Inc
Restoration Hardware Holdings Inc
It’s telling that Sen. Dianne Feinstein (D-Calif.) is one of the few sticking up for former CIA Director David Petraeus, who resigned on Nov. 9 after revealing that he’d had an extramarital affair. She stepped off the moral high ground to issue a pragmatic statement reminding everyone that the four-star general was good at his job, loved his work, and had a command of intelligence issues “second to none.” As Feinstein pointed out, his exit is “an enormous loss for our nation’s intelligence community and for our country.” And she said she regrets that President Obama accepted Petraeus’s resignation.
To be sure, as our top spymaster, Petraeus should be held to a higher standard than most, given the consequences of leaving himself vulnerable to blackmail. But that’s a unique aspect of his job, not the logical outcome of sleeping with a woman other than his wife of 37 years. Breaking the bonds of one’s marriage is undoubtedly in bad taste, not to mention bad judgment for anyone in high-profile jobs. It’s not always grounds for dismissal.
The prime consideration in firing someone should be whom they’re sleeping with. If Petraeus’s mistress turns out to be Paula Broadwell, the Harvard researcher who co-wrote his biography, then Feinstein’s support may be justified. That assumes he did not violate any laws—such as filing false expense reports or giving Broadwell access to classified material.
The same can’t be said for the other person who lost his job on Friday because of an affair: Lockheed Martin (LMT) President and incoming Chief Executive Officer Christopher Kubasik. Like Petraeus, Kubasik released a statement filled with self-flagellating prose about his failure to live up to his usual high standards. He failed, all right: Kubasik was sleeping with an employee. Not only did that leave him and Lockheed vulnerable to charges of sexual harassment and discrimination, it’s an unacceptable abuse of power. That’s why sleeping with a subordinate—which means anyone on the payroll when you’re CEO—violates most corporate ethics codes.
You don’t have to look far to find examples of why it can be a problem. Best Buy’s (BBY) Brian Dunn was fired earlier this year after an internal audit concluded that he’d been romantically involved with a subordinate; Restoration Hardware’s (RH) Gary Friedman left the same way. At Best Buy, the young woman reportedly delighted in telling co-workers about the perks she was getting from the boss. (The company has declined to comment formally on the case.) Meanwhile, former Boeing (BA) chief Harry Stonecipher’s affair with a senior executive in the Washington office a few years ago sent the airplane manufacturer reeling. Among other things, Boeing’s previous CEO, Phil Condit, had resigned in an unrelated scandal.
The issues aren’t hard to understand. When it’s your boss who’s making a move, it’s kind of hard to say no—even if he is technically married and sometimes decades older. When the affair ends, as many do, it’s the person without the golden parachute and press release who heads first for the door. As boards know all too well, that’s often the first person to then file a lawsuit for harassment.
Some situations can be complicated: Former Stryker (SYK) CEO Stephen MacMillan did have an affair with someone he met at work. But he says he started dating Jennifer Koch, a former flight attendant on his corporate jet, only after she quit her job and he had filed for divorce. Moreover, he was so concerned about any perception of impropriety that he even gave the board a heads-up on his intentions. (MacMillan was forced out earlier this year, in any case.) Hewlett-Packard’s (HPQ) board, on the other hand, fired Mark Hurd after it found “inappropriate payments” related to his alleged relationship with a contractor. In short, he was allegedly filing personal meals with her as business expenses on his T&E reports, a firing offense even if you’re not having sex with your lunch mate.
So where does that leave Petraeus, besides without a job? Maybe he quit out of embarrassment and a desire to spare everyone a messy investigation. Maybe he was pushed out in the belief that the country’s top intelligence chief no longer had the credibility to do the job. When you’re managing a network of spies and searching for signs of blackmail, that’s a legitimate concern.
But let’s not forget that the top ranks have long been littered with people whose judgment on personal matters was at odds with their areas of expertise, from ex-presidents to late-night TV hosts. Some went on to recover their reputations. Some didn’t. But falling in love with one person while married to another should not, in itself, be sufficient to push a talented leader out of a critical job.