The firing of RBC‘s CFO shines a fresh spotlight on office relationships: ‘This kind of behavior happens more often than you realize’

The other employee in the relationship, who wasn’t named, also was terminated. According to the bank, the relationship “led to preferential treatment of the employee including promotion and compensation increases.” 

RBC, which appointed Katherine Gibson—a 22-year veteran of the bank—as interim CFO while a search is conducted for a full-time replacement, also said there’s no evidence Ahn’s conduct affected the bank’s business. (RBC, one of Canada’s largest banks, with more than 17 million clients in over two dozen countries, announced last month the completed acquisition of HSBC Bank Canada for $10.1 billion.)

Regarding Ahn’s situation at the office, “this kind of behavior happens more often than you realize,” said Shawn Cole, president and founding partner of Cowen Partners, a C-suite-focused executive search firm. “Most organizations are not as public about the circumstances of an executive abruptly leaving or will play it off for other reasons,” Cole said.

This is why, for many executive searches, back-channel references are so important, he said. In Ahn’s case, her providing financial benefits because of a personal relationship is “a significant ethical violation—this is fraud,” Cole added. “It draws into question everything they have ever done.”

Jason Walker, cofounder of the consulting firm Thrive HR, told me that, overall, most companies don’t specifically enact policies to limit relationships between employees. “However,” Walker added, “if the CFO has an employment contract with the company, as most do, there is a strong possibility that there is a clause that stipulates that they can’t engage in these types of relationships.”

In many situations where an employee receives additional compensation or a promotion because of an inappropriate direct relationship, especially with someone in the C-suite, it’s linked with harassment, Walker continued. “That will get you fired every time,” he said. “But if you are having a relationship with someone in marketing and you’re the CFO, for example, the issue is salacious but not something that is going to smack of harassment or creating a toxic work environment.”

Personal relationships at work are generally a bad idea for all involved parties, Cole said. “At an executive level, between peers or subordinates, it is unlikely that it will end well,” he said. But there are instances where it can work. “If it’s the love of your life, you can make smart decisions that don’t jeopardize your reputation, career, or the organization,” he said.

This is good news for Gen Z, which may be making office romances trendy again. A new Coins2Day feature article by Jasmine Li explores this topic where she writes that one in five Americans met their significant other at work in the 1990s. “And though the #MeToo movement and the pandemic drove Americans to hit pause on workplace romances, a February survey from the Society of Human Resources shows that some things are eternal—and young people are down to date their coworkers once again after a hiatus of what seems like years,” she writes.

Relationships between younger coworkers tend to be less fraught, but it’s still best to take precautions, Walker told me.

“Relationships at work are a good thing as long as they are not manager to employee,” he added. “Or if something develops, you need to be mature enough to talk to HR or your management and say, ‘One of us has to move so we don’t cause issues.’”

Sheryl Estrada
[email protected]

María Soledad Davila Calero curated the Leaderboard and Overheard sections of today’s newsletter.

Leaderboard

Alex Barsk was named CFO at KFC Global, effective June 1. Barsk will also oversee KFC’s financial and planning analysis and strategy functions. She joins KFC Global from its sister brand, Pizza Hut, where she most recently served as global CFO. Barsk joined Pizza Hut in 2015 and has held leadership roles across strategy, finance, development, and supply chain. 

Ankur Dhingra was appointed as CFO of Illumina (Nasdaq: ILMN), a DNA-sequencing company. Dhingra has been the CFO of other companies in the health care sector, most recently Summit Therapeutics Inc. Dhingra is replacing Joydeep Goswami who decided to leave the company but will stay as an advisor until June 30.

Big deal

The Bureau of Labor Statistics reported on Wednesday that inflation, as measured by the consumer price index, rose 3.5% from a year ago in March. The figure topped economists’ consensus forecast for 3.4% year-over-year inflation and February’s 3.2% reading. “‘Disinflation is out, and inflation is in’ after a hotter than expected March CPI report, experts say,” a Coins2Day article by Will Daniel, delves into the implications of the latest report. “You can kiss a June interest rate cut goodbye,” Greg McBride, chief financial analyst at Bankrate, told Daniel. 

Going deeper

Rho Technologies, Inc., a New York-based banking startup, has released its 2024 CFO Compensation Report. It takes a look at the compensation practices and services that affect the office of the CFO in venture-backed and mid-market growth companies. The survey was organized with the members of a CFO Roundtable.  

Some of the key findings include an increase in cash compensation, acutely at the director level. Meanwhile, 77% of respondents reported receiving a performance-based cash bonus, compared to 65% in 2021, and severance is up across the whole population, according to the report. The findings are based on a survey of 118 respondents primarily consisting of CFOs at venture-backed businesses in the Greater New York area.

Overheard

“The Fed has a bias toward cutting interest rates this year, but the strength of the labor market and recent gains in inflation are giving the central bank the wiggle room to be patient.”

— Oxford Economics chief U.S. Economist Ryan Sweet wrote in an analyst note, Coins2Day reported.