Business Leaders Often Pull a Petraeus Too
There's usually no good time to announce that your CEO is resigning. But Friday, November 9, 2012, came close.
[GALLERY: Political Cartoons of the David Petraeus Scandal]
That's the day CIA Director David Petraeus announced he was abruptly leaving his job in the aftermath of an extramarital affair, kicking off one of the most sensational news stories since presidential candidate John Edwards got caught bedding down with his videographer, while his wife struggled with cancer. Little noticed in the maelstrom was the resignation of Christopher Kubasik, who was due to take over as CEO of Lockheed Martin on January 1. An investigation at Lockheed--America's biggest defense contractor--found that Kubasik had engaged in an improper relationship with a subordinate, so the board decided he had to go.
The surreal details of the Petraeus affair--which has so far entangled his fetching biographer Paula Broadwell, the Florida socialite Jill Kelley, Marine Corps Gen. John Allen and an anonymous, shirtless FBI agent--have generated a predictable media circus. One emerging storyline is that there must be something wrong with military and government officials that makes them prone to flings with flatterers and dilettantes.
But if this is a problem unique to the military, then there are a lot of CEOs who might be better cast as generals.
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Mark Hurd resigned as CEO of Hewlett-Packard in 2010 after a female contractor accused the married Hurd of sexual harassment. Dov Charney, CEO of American Apparel, has been sued several times for sexual harassment, including allegations that he masturbated in front of two female employees. Herman Cain's presidential bid was derailed last year when one woman claimed to have had a long affair with Cain starting in the 1990s, when he was a restaurant executive, and several others alleged that he had harassed them. Cain denied the charges.
Sex scandals have derailed business leaders at firms ranging from Boeing to Best Buy to Starwood Hotels. And those are the improprieties we know about. It's a safe bet there's a lot more executive mischief that never becomes public. In the military, enforcement may be spotty, but at least there are strict rules prohibiting fraternization. In the corporate world, they're much hazier. Corporate jets, expense accounts and loyal executive assistants also help conceal a lot of misdeeds that are harder to hide when everybody's on the public payroll.
In the corporate world, extramarital affairs aren't even considered a liability, as long as they don't affect business matters. General Electric CEO Jack Welch had an affair while he was one of the nation's most admired business leaders. Once Welch retired, got divorced and married his new paramour, Suzy, the two of them penned a popular business-advice column, burdened by no stigma whatsoever. After Mark Hurd left H-P, Oracle--indifferent to his personal peccadilloes--snapped him up, eager to hire one of the most talented salespeople in technology.
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And in 2009, the married owner of production company Worldwide Pants--David Letterman--admitted to a TV audience of millions that he had had sex with several female staffers, which led to an extortion scheme that Letterman himself helped disrupt. At the time, critics wondered if the tawdry matter would accelerate the sunset of Letterman's storied career. But if anything, it enhanced his standing as a deft entertainer.
Petraeus, in fact, may find that once the dust settles (and his marital duress subsides) a rewarding second career awaits him in business, where his personal code of ethics would probably rank in the top 10 percent--and the FBI has little interest in your personal life.
Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.
