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Speaking to CNBC, Mr Nadella insisted that the company is “very different” in 2021 than how it was in 2000 when the relationship reportedly occurred, and that power in the workplace should not be abused.
Mr Gates stepped down as CEO in 2000, 25 years after founding the company that made him one of the richest people in the world.
The revelation of an inappropriate relationship that same year came to light earlier this week as Mr Gates and his wife Melinda move forward with their divorce, which they announced earlier this month.
An investigation into the workplace relationship began in 2019 and was still ongoing when Mr Gates stepped down from the board of the company in 2020.
Mr Nadella was asked about Mr Gates’ affair with a staff member before a discussion on the future of work on CNBC on Friday.
“The Microsoft of 2021 is very different from the Microsoft of 2000,” said Mr Nadella to CNBC anchor Jon Fortt when asked about the revelations about Mr Gates in relation to workplace culture at the company.
In an apparent slight towards the company founder, he continued by adding that power dynamics at work should not be abused and all employees should be comfortable raising concerns even about incidents from long ago.
“Overall the power dynamic in the workplace is not something that needs to be abused in any form,” he said.
He added: “The most important thing is for us to make sure that everybody’s comfortable in being able to raise any issues they see, and for us to be able to fully investigate it.”
Mr Gates’s spokesperson has acknowledged that the billionaire had an affair at Microsoft more than 20 years ago, but said it ended “amicably” and was not related to his decision to step down from the company’s board.
Members of the board at Microsoft pursued an investigation into the billionaire founder’s affair after they were informed of a letter sent by a female employee in 2019, alleging that she and Mr Gates had a sexual relationship over the years, The Wall Street Journal reported.
“Microsoft received a concern in the latter half of 2019 that Bill Gates sought to initiate an intimate relationship with a company employee in the year 2000,” confirmed a company spokesperson.
Several board members grew concerned, according to the report, and felt that Mr Gates should step down from leadership roles with the company while the investigation into the matter continued.
A private law firm was hired to investigate the allegations by the woman. She had demanded changes to her job in the letter and that Mr Gates’s now-estranged wife should also read the letter.
It is not clear what level of seniority the woman held at the company.
Since 2006 a policy has been in place whereby staff must disclose any relationships with other employees.
There are also policies encouraging diversity and inclusion, and ensuring employees can speak out on issues that concern them.
“In that context, the fact that anyone can raise any issue — even an issue from 20 years ago — we will investigate, take action to the satisfaction of the person who has raised it,” said Mr Nadella.