CHAUDHRY: Termination of RBC CFO raises questions

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this week, Globe and Mail Royal Bank of Canada has announced the termination of its chief financial officer.

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Nadine Ahn was fired after an employee complaint prompted an internal investigation into a personal relationship between Ahn and the bank's vice president of the treasury department. The investigation concluded that Ahn influenced the vice president's promotion and salary increase.

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In a statement late last week, RBC said Ahn was “in violation of RBC's code of conduct” and both he and the vice president were fired last week.

RBC reported that it received the complaint at the hotline of bank employees at the beginning of this March.

The Globe and Mail It also said that Ahn could lose “millions in salary,” but the bank did not specify whether Ahn was terminated for cause. At the time of his termination, the publication reported that Ahn's total compensation for 2023 was less than $4.2 million, including a salary of $641,644, a bonus of $963,625 and stock and option awards worth $2.46 million.

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Relationships at work should be avoided. We all know that, right? But such relationships happen anyway, everywhere, all the time. I've worked at several places where office romances were tolerated, sometimes even celebrated.

We rarely accept a new role, waiting for a new relationship to come. Clients I have worked with report that these relationships usually “just happened” in an organic and often innocent way.

But as in the case of the RBC CFO, office relationships can have a very dark side. The common assumption is that these connections lead to deep-seated conflicts of interest and inner personality chaos. This is especially true when the relationship is hidden.

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As for Ann, we know little about what happened, whether the relationship was covered up, what RBC knew or didn't know when it received the hotline tip, and whether the investigation was truly fair. What we do know is that the bank immediately moved to spin the story surrounding Ahn's departure, perhaps because of his executive status and high public visibility.

It is certainly reasonable that Ahn was expected to walk the walk and adhere to the bank's code of conduct. After all, that's how executives are supposed to work.

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But it is commonplace that sometimes those in power are the main rule breakers in their organizations; blatant violation of the company's code of conduct. How do most organizations respond? By looking away.

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It is difficult to tell any employee about misconduct. Even less pleasant is facing a rainmaker or marker staffer that affects the lower levels.

While many would agree that RBC made the right move to eliminate the two individuals here, one has to ask whether the bank is applying its code of conduct more strictly to its balance of C-suite and executive teams. If he took a harsher approach this time than he used to use lenient disciplinary measures on other occasions, his application of the code of conduct was arbitrary rather than principled.

Office romances should be avoided for many reasons, but for some, if their employer forgives them, they should forgive everyone.

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The content of this article is for general information only and does not constitute legal advice.

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