My View

Another public company CEO just got busted having an affair with his PA.

This CEO got ‘seriously’ penalised by his board; he received a one-off annual pay cut of 20%.

And the PA, she resigned. Presumably she’s being looked after by the CEO out of the residual $5m or so that he picked up.

The penalty wasn’t for having the affair, but for not declaring it, as per company policy.

On one hand this approach has merit. You can’t legislate against stupidity so you may as well work around it.

But had the CEO declared the affair, one of the participants would have either lost their job or been unhappily redeployed.

And that someone would have been the PA.

So the outcome would have been the same for her, no matter what. 

It still doesn’t work to have your CEO this compromised, or this compromisable.

This character flaw of compromisability must flavour many of his (I’ll stick to this gender for the purposes of this hypothesis) management activities. Not to mention the inherent dishonesty and lack of discipline.

In fact, assuming that most of the CEOs of Australian listed company are this compromisable, dishonest and ill-disciplined, one can assume that this doesn’t matter, solely because they are all as afflicted as each other, but all are also protected from foreign competition.

No competitive disadvantage then!

If I were on your board, mate, you’d have an app on your phone which would ask you to confirm daily that you aren’t having any sort of affair with any employee of our company, or even that of any supplier, customer or partner.

At the threat of full repayment of all renumeration you have ever received as CEO. After all, part of the justification for those big ticket salaries are your honesty, uncompromisability and discipline.

I suspect this would do the trick.