This week’s ouster of Nestlé Chief Executive Laurent Freixe served as a lesson to other European executives: When it comes to office romances, expect to play by American rules.
A more laissez-faire approach has traditionally prevailed in much of Europe. For years, companies and their boards largely viewed the private lives of employees—and even bosses—as mostly off limits. European authorities, too, have traditionally imposed tighter limits on employers’ abilities to monitor and investigate staffers’ relationships than in the U.S.
That is changing as more European companies adopt and enforce U.S.-style governance standards—sometimes with a vengeance. Last year, BP ordered all staff to disclose intimate relationships at work and mandated that senior leaders disclose any office romances over the previous three years. The impetus was the 2023 resignation of CEO Bernard Looney , who the company said was “not fully transparent” about his past relationships with colleagues.
British broadcaster ITV also introduced a stricter policy on personal relationships at work after a 2023 incident in which a morning-show presenter admitted to a relationship with another staffer. This year, Filipe Silva , the CEO of Portuguese oil company Galp Energia , stepped down after a report by the news outlet Eco that the company’s ethics committee had investigated an anonymous tip of a relationship between Silva and a senior manager.
Driving the shift, in part, is a push among investors and shareholder groups to globalize corporate standards in managing risks to a company’s reputation or financial performance. A European Union directive established several years ago to better protect workers also requires that companies establish whistleblowing programs to receive reports of wrongdoing or questionable conduct.
The result, legal specialists say, has been a convergence of workplace standards across both sides of the Atlantic.
“The U.S., in the business world, is certainly an exporter of cultural norms,” said Martin Gelter , a law professor at Fordham University.
In the U.S., a string of executives have lost jobs over workplace relationships since the #MeToo movement first shook up American workplaces eight years ago, including former CEOs of McDonald’s and Intel . Most U.S. public companies prohibit executives from dating subordinates and many have strict rules around executives and managers disclosing such relationships. Those disclosure rules also mean many investors expect transparency when an executive is ousted.
“It’s more difficult to just hide these types of situations,” said Matteo Tonello , head of data benchmarking and analytics at the Conference Board.
More recently, the retail chain Kohls fired its CEO , Ashley Buchanan , for trying to funnel business to a romantic partner he once worked with. Norfolk Southern CEO Alan Shaw was ousted last year after a board probe found a romantic relationship violated company policy .
In Europe, privacy laws give colleagues more cover to pursue workplace relationships, to a point. In 2005, some German employees at Walmart objected to the retailer’s prohibition of romantic relationships between supervisors and employees, arguing that the company hadn’t consulted worker representatives on the plan. A subsequent worker lawsuit prompted Walmart to lift its ban. (Walmart exited its German business the following year.)
Yet, employers can generally intervene in personal relationships when there is a clear, justified reason to do so, such as managing a conflict of interest or rooting out harassment, legal specialists said. And companies can enforce policies that prohibit leaders from having relationships with subordinates.
Cultural norms also play a role. At the height of the #MeToo movement, some in France denounced the collective reckoning over sexual harassment as “puritanism,” arguing that overzealous misconduct allegations risked undermining sexual freedom.
“Insistent or awkward pickups aren’t a crime,” a 2018 public letter signed by a group of prominent French women, including actress Catherine Deneuve , stated.
In recent years, though, some European companies have taken a harder line. The chief financial officer of the London-based electronic products distributor RS Group resigned in 2023 because of a personal relationship with a colleague. In a statement at the time, CFO David Egan said that there had been “some shortcomings of judgment” and that his actions fell short of standards expected of the company’s leaders.
The EU and Switzerland maintain different employment and privacy laws, and Swiss multinationals typically follow global standards for corporate conduct. At Nestlé, Freixe’s downfall followed a tip to an anonymous internal company hotline, The Wall Street Journal reported. A tipster said Freixe was having an intimate relationship with a marketing executive who reported to him.
The couple initially denied any relationship, Nestlé said. But after two investigations, more hotline reports and a letter to the Nestlé chairman, the food company dismissed Freixe on Monday for breaching its conduct code.
Despite the greater scrutiny on both sides of the Atlantic, incidents of CEOs resigning over workplace relationships are still relatively rare. Nearly 90% of CEO successions in the S&P 500 were planned last year, according to data from the Conference Board and ESGAUGE. About 8% involved CEOs forced out because of corporate underperformance, personal misconduct, financial misdeeds or another reason.
“These cases remain fairly uncommon,” the Conference Board’s Tonello said. “You kind of remember them because they stand out from other situations of a CEO succession.”
Still, no matter what scrutiny, expect more executives on both continents to be ensnared in such incidents in the future, said John Coffee , a professor at Columbia Law School, who specializes in corporate governance issues. In the workplace, where employees often spend a lot of time in proximity, it’s almost inevitable that personal connections develop .
“Sex is a very powerful force all around the world,” he said.
Write to Chip Cutter at chip.cutter@wsj.com
