Good morning. Royal Bank of Canada’s former chief financial officer is taking legal action against the bank after her dismissal.
In April, I reported that the Royal Bank of Canada (RBC) fired Nadine Ahn, who had been with the bank for about 25 years, and was promoted to the role of CFO in 2021. The bank said Ahn was in an “undisclosed close personal relationship” with another employee—a violation of the firm’s code of conduct. The other employee in the relationship, who wasn’t named at the time, also was terminated. The relationship “led to preferential treatment of the employee including promotion and compensation increases,” according to RBC. Katherine Gibson was named interim CFO.
But now Ahn, along with Ken Mason, the bank’s former vice president of capital and term funding, who is the previously unnamed employee fired on the same day, have filed separate lawsuits, each asking for tens of millions of dollars in pay and damages, as reported by Bloomberg.
Ahn and Mason said the RBC press release announcing Ahn’s dismissal falsely insinuated that they were having an extramarital affair.
“This discriminatory and unbalanced misstep by RBC ended the career of a woman who was a candidate to be RBC’s first female chief executive officer and caused colossal professional damage and personal and family embarrassment and privacy damage for RBC’s loyal long-term employee, Ken,” according to a statement of claim filed by Mason, as seen by Bloomberg. The claim also states that “a longstanding friendship and professional working relationship was mischaracterized by the anonymous accuser and by RBC.”
I contacted RBC to find out the bank’s response to Ahn and Mason’s lawsuits. “We conducted a thorough review with an investigation by outside legal counsel and the facts are very clear that there was a significant breach of our code of conduct based on the irrefutable evidence collected during the investigation,” the company stated in an email. RBC holds its employees and senior leadership team to “high ethical standards and a CFO’s integrity must be beyond reproach,” according to the bank.
“In accordance with securities laws in Canada and the U.S., and given that Ahn was a named executive officer of the bank, RBC was required to act quickly and to publicly disclose the full amount of detail and information required in a timely manner,” according to the email. The bank added that Ahn’s “claims are without merit, and we will vigorously defend against them in court.”
RBC has accused Ahn of breaking a code of conduct. And when companies create such policies, they typically have inside and outside legal counsel review them, Jason Walker, cofounder of the consulting firm Thrive HR, told me. And at large companies, especially those that are financial institutions, “there have been layers upon layers of review,” Walker said. In addition to legal, that could include policy review by HR, finance and accounting, he said.
“The likelihood of the policy being inappropriate is not very likely,” he said.
Accusations against an executive for violating a company code of conduct is a big deal. Ahn claims her termination resulted in “palpable reputational harm” and “public humiliation.” I asked Shawn Cole, president and founding partner of executive search firm Cowen Partners, how that could potentially compromise an executive wanting to join a new company.
“In my experience, when an executive sues an employer for wrongful dismissal, it’s almost always taken into consideration when they seek another job,” Cole told me. “Regardless of guilt, this situation is likely career-ending. Companies generally avoid entangling themselves in employment drama, especially when there’s a risk of follow-on lawsuits.”
Cole said that even if the executive is in the right and tries to clear their name, “the mere fact that they’ve been involved in such legal action can be a red flag for potential employers.”
Sheryl Estrada
[email protected]
The following sections of CFO Daily were curated by Greg McKenna.
Leaderboard
Robin Kooyman was appointed CFO of Blackline Safety (TSX: BLN), a manufacturer of employee safety technology, effective Sept. 9. She will succeed former CFO Shane Grennan, who resigned in June after eight years in the role to pursue other opportunities, the company said. Kooyman arrives from Charger Ready Properties, a real estate partner for developing EV charging networks, where she also served as CFO.
Laura Russell was promoted to interim CFO of Rogers Corporation (NYSE: ROG), an Arizona-based electronic components manufacturer, effective Aug. 12. She will succeed former CFO Ram Mayampurath, who has resigned after three years in the role to pursue another opportunity, the company said. Russell joined Rogers in September as vice president of finance and previously served in senior finance roles at chip companies Wolfspeed and NXP Semiconductors.
Big Deal
Eighty percent of U.S. Business leaders recognize GenAI as important to gaining competitive advantage and market share, according to KPMG’s AI & Digital Innovation Quarterly Pulse Survey. The report polled 100 C-suite executives and other business leaders at U.S.-based organizations with annual revenue of $1 billion or more.
Over half of those surveyed (52%) said revenue generation is their primary measure of success for AI implementation, followed by improved decision making. That was a noticeable change from the first quarter of the year, when fifty-one percent of respondents cited productivity as their top ROI metric.
“Leaders are beginning to view GenAI investment and adoption as table stakes,” said Steve Chase, vice chair of KPMG’s AI and digital innovation organization. “Now, they’re focused on how to translate those investments into a competitive advantage. Organizations are making a massive push for AI talent and adjusting their business strategies to capitalize on GenAI’s transformative potential.”
Going deeper
“In the office space slump, Miami is coming out a winner, Capital Economics confirms,” is a new report from Coins2Day’s Alena Botros. Commercial real estate’s slump looks set to continue over the next two years, with Seattle and San Francisco expected to be hit worst. Southern cities like Miami are a bright spot, however, underlined by the likes of JPMorgan Chase, Goldman Sachs, Amazon, and Apple expanding their footprints in the Sunshine State.
Overheard
“While inflation is down, prices are still high, and I think consumers have gotten to the point where they’re just not accepting it.”
—Tom Barkin, president of the Federal Reserve Bank of Richmond, said last week at a conference of business economists, the Associated Press reported.
