Office flings and firings

If you heard the phrase “cheaters never prosper” talked about at AFL headquarters, you’d assume they were talking about performance enhancing drugs, salary cap breaches or breaking the rules to win a game.

This week, as AFL CEO Gillon McLachlan announced the resignations of two senior officials, Richard Simkiss and Simon Lethlean, after they admitted to adulterous affairs with junior staff, the phrase took on a whole new meaning.

The reaction to McLachlan’s decision has been mixed. Some have applauded the move as a strong defence of the AFL’s culture and values. Others have suggested the AFL has gone too far. Writing in The Australian Financial Review, Josh Bornstein suggested office affairs that don’t involve “harassment or stalking or bullying” should “not be grounds for loss of employment”.

Particulars of the AFL case aside, this view is misguided. It conflates ethics and the law and demonstrates a lack of appreciation for the important role values and principles play in corporate governance. Just because something is legal doesn’t mean it’s ethical.

Yes, the law should play a role in guiding an organisation when developing an ethical framework. But it is far from sufficient. Arguably, the best test of an organisation’s ethics will arise when they’re operating in areas not covered by the law.

When a power imbalance could potentially cause harm to the more vulnerable party, then we have good reason to question that conduct.

With that said, what should we make of the AFL’s decision? When announcing the resignation of the two senior officials, McLachlan spoke to his organisation’s values. He stated that he would like to lead “a professional organisation based on integrity, respect, care for each other, and responsibility”.

An organisation’s values are affirmed by the actions, choices, and decisions that are made and condoned by its people, especially its most senior leaders. This also was not lost on McLachlan. “I expect that executives are role models and set a standard of behaviour for the rest of the organisation,” he said. “They are judged, as they should be, to a higher standard”.

The response by the Seven West Media board to revelations that their CEO Tim Worner had an adulterous affair with executive assistant Amber Harrison was a little more benign. They engaged a private law firm to undertake an independent investigation into a variety of allegations made by Harrison, including the inappropriate use of company funds and illicit drug use by Worner.

Although the findings of the investigation were not made public, the board concluded there was no evidence supporting the claims of wrongdoing by Worner. Furthermore, they stated he had been disciplined over his “personal and consensual” relationship with Harrison, which it also said was “inappropriate due to his senior position”.

So what are we to make of these seemingly contrasting responses? Should we cast judgement and declare that one organisation is more virtuous than the other?

We must be careful not to instantly assume that an individual who has become involved in an extra-marital affair is less committed to the organisation or its values. Infidelity is not a simple question of character deficiency.

It should be acknowledged that although the two organisations handled the incidents differently, neither condoned the conduct of the leaders involved. When judging the individuals and the organisation’s responses, commentators and the public appear to point to two factors.

The first is the power asymmetry between the people in each of the affairs. This is not unique. Power asymmetries in organisations are inescapable and almost all leaders have at some stage used their power to gain advantage, even if they did so unwittingly. However, when a power imbalance could potentially cause harm to the more vulnerable party then we have good reason to question that conduct.

The second factor inviting people’s judgement is the fact the affairs were adulterous. Understandably, infidelity arouses a range of moral responses. But we must be careful not to instantly assume that an individual who has become involved in an extra-marital affair is less committed to the organisation or its values. Infidelity is not a simple question of character deficiency.

Stories are powerful. After notable incidents like these, they become folklore within organisations.

Whenever a senior executive becomes involved in a regrettable or unsavoury incident similar to these, an employer has no choice but to respond. How they do so is a defining moment for the organisation. Their response (or lack thereof) reveals to us what the organisation really values and how committed it is to those values.

However, judging the appropriateness of the response is difficult. Perhaps the best measure is one we don’t yet have access. Namely, the stories that these events inspire within the organisation.

Stories are powerful. After notable incidents like these, they become folklore within organisations. If they affirm and are aligned to stated values and principles, they can strengthen the organisation’s ethical foundations. If not, people can quickly become cynical, compromising the organisation’s character.

When we look past the salacious gossip surrounding office romances, this is arguably the most important thing to take from these unfortunate incidents. For the sake of the boards at the AFL and Seven West Media, I hope that the stories being told within their organisations are reflective of the values they extol.