Intel nudged out its CEO Brian Krzanich on 21 June for conducting a romantic relationship with a colleague – which happened some time ago, and is no longer in progress. On his watch, Intel has captured some 40% of the $260 billion date-centre chips market [1] – and that is just one part of the firm’s business.
In an official statement, [2] the chipmaker said: “Intel was recently informed that Mr Krzanich had a past consensual relationship with an Intel employee. An ongoing investigation by internal and external counsel has confirmed a violation of Intel’s non-fraternisation policy, which applies to all managers. Given the expectation that all employees will respect Intel’s values and adhere to the company’s code of conduct, the board has accepted Mr Krzanich’s resignation.”
Intel’s policy of banning leadership figures from becoming romantically linked with staff has in this case triggered the hasty assembly of an entirely new leadership team, with CFO Bob Swan – who held the same role at eBay for nine years up to 2016 – appointed as interim CEO. The company’s statement added, “The board believes strongly in Intel’s strategy and we are confident in Bob Swan’s ability to lead the company as we conduct a robust search for our next CEO. Bob has been instrumental to the development and execution of Intel’s strategy, and we know the company will continue to smoothly execute. We appreciate Brian’s many contributions to Intel.”
But while Intel insists that it has “a robust succession-planning process in place”, signs are that the search for Krzanich’s permanent replacement won’t be plain sailing.
According to a Bloomberg article on the fallout from Krzanich’s departure, “During a five-year stint as CEO, [he] upended Intel’s executive mentoring approach and pushed out several internal leaders, some of whom vied with him for the top job. That leaves a thinner executive bench from which to pick a successor, and forces the company to look outside to potentially lure back some of the talent who left or were pushed out.”
All of this organisational turbulence has flowed from a policy designed to safeguard against one of the world’s most common occurrences: relationships between co-workers. Does this demonstrate that non-fraternisation policies are inherently unreasonable?
“We actually did some research on this subject three years ago called Love in the Office,” says The Institute of Leadership & Management's head of research, policy and standards Kate Cooper. “The majority of people we surveyed didn’t have a problem with relationships at work. Are you more loyal to someone with whom you’re romantically involved than you are to someone with whom you have a long and close friendship? The kind of concerns that some firms have over how romantic loyalties could skew perspectives are unrealistic.”
Cooper points out: “a 2016 survey of 1,600 adults by the TUC [4] found that one in five people who are married or in a civil partnership met their partners at work. It also found that a third of people have, at some point, had relationships with colleagues. TUC general secretary Frances O’Grady said: ‘It's hardly surprising that relationships start around the water cooler – after all, we work longer hours than anyone else in Europe.’ Clearly, you’re never going to prevent this with non-fraternisation policies. All you’re going to do is make people more secretive about their relationships – and that could be even more damaging than the relationships themselves.”
She notes: “if you are open and transparent, then arrangements and contingencies can be put in place to safeguard against conflicts of interest. Really, it’s all about the professionalism of those involved. I know people who have been in romantic relationships while they have worked together, and their relationships haven’t undermined their professionalism in any way. That said, if there was a policy line in place that Krzanich overstepped, then he did the right thing by resigning. After all, it was part of the company’s internal rules, and as CEO – particularly one with a strong track record – it was up to him to show an example.”
Cooper adds: “In terms of the potential struggle that Intel faces with replacing him, a well-managed succession policy should ensure that no one is irreplaceable, and that options are always on the table for emergencies like this. The alternative is simply too risky.”
For further thoughts on ethics, check out these learning resources from the Institute