- 11 September 2025
The world’s largest food company, Nestlé, faced a governance crisis earlier this month after the dismissal of its CEO for concealing a romantic relationship with an employee. This follows similar high-profile incidents such as the CEO of technology company Astronomer resigning after being caught on camera hugging the company’s Chief People Officer at a Coldplay concert.
A company announcement from Nestlé stated:
The departure of Laurent Freixe follows an investigation into an undisclosed romantic relationship with a direct subordinate, which breached Nestlé's Code of Business Conduct. In line with best practice corporate governance, the Board ordered an investigation overseen by Chairman Paul Bulcke and Lead Independent Director Pablo Isla, with the support of independent outside counsel.
Paul Bulcke, Chairman, commented:
“This was a necessary decision. Nestlé's values and governance are strong foundations of our company. I thank Laurent for his years of service at Nestlé.”
Laurent Freixe, who had been Chief Executive for only a year but had worked at Nestlé since 1986, was replaced by Philipp Navratil, a long-time Nestlé executive.
Nestlé’s Code of Business Conduct (CBC) prohibits relationships between employees in a direct reporting relationship and requires the disclosure of all “close” relationships between employees who are connected by indirect reporting lines:
“Direct reporting relationship between family members, partners and close associates is not allowed. Indirect reporting lines must be declared and assessed on a case-by-case basis.”
Nestlé is not the only major corporation recently embroiled in controversy over staff misconduct. Aside from the recent CEO of Astronomer case, in September 2023 Bernard Looney, the CEO of BP, resigned after admitting he had not been “fully transparent” with the BP board about his past personal relationships. The board later announced that Looney would forfeit the majority of his £32.4 million remuneration package due to the “inaccurate and incomplete assurances” he had provided during their initial investigation in 2022.
Secrecy is a major risk
It is worth noting that in all three cases, the relationship itself was not the cause of disciplinary action. The issue was the secrecy surrounding the relationships. All three CEOs could potentially have remained in post had they followed company guidance on relationship disclosure.
Romantic relationships that involve colleagues or subordinates can raise serious questions about organisational ethics, transparency and corporate governance.
These high-profile exits highlight a broader company challenge: how can organisations manage personal relationships in the workplace, particularly at the executive level, while respecting personal freedom and maintaining an open and inclusive culture?
Workplace relationships can be detrimental to a business in the absence of clear rules and effective enforcement. They need to be managed to prevent negative consequences such as harassment, team disruption, breaches of confidentiality, coercion, favouritism, conflicts of interest, collusion and the possibility of legal claims if the relationship breaks down.
As of October 2024, the UK implemented the Worker Protection (Amendment of Equality Act 2010) Act 2023, introducing a legal duty for employers to take reasonable steps to prevent sexual harassment in the workplace. Failure to comply can result in increased compensation awards of up to 25% in employment tribunals and enforcement actions by the Equality and Human Rights Commission. Clearly communicating to employees what forms of conduct are unacceptable is advisable considering this legislation.
While trying to protect our organisations against these hazards, we need to strike the right balance. Realistically, office romances cannot be banned outright. While in the US it is possible for organisations to prohibit all relationships between employees, in the UK such blanket bans may be vulnerable to legal challenge. Under Article 8 of the European Convention on Human Rights (ECHR), which protects the right to respect for private and family life, any interference with employees’ ability to form and maintain romantic relationships must be lawful, proportionate, and necessary in a democratic society. A total ban could be deemed unlawful if it disproportionately affects individuals’ rights.
What steps should governance professionals take?
In the UK, there are no specific laws governing personal relationships at work, but there are practical measures employers can take to manage the associated risks:
- Review your code of conduct: Does it clearly define which relationships are prohibited and which are reportable? Does it include relationships with external stakeholders? Consider making the disclosure of all personal relationships compulsory.
- Review recruitment and supplier onboarding processes: Do they capture existing relationships?
- Update your risk register: Ensure it includes risks associated with “close personal relationships.”
- Consider a standalone “Relationships at Work” policy: This should mandate disclosure, define acceptable and unacceptable behaviours (e.g., favouritism, coercion), clarify expectations for professional conduct (e.g., avoiding public displays of affection), and outline consequences for breaches.
- Train your managers: Managers are often the first to notice workplace relationships. Ensure they understand the boundaries of manager-subordinate relations and are trained to handle team members in relationships. Regular check-ins can help assess policy effectiveness.
- Strengthen your whistleblowing procedures: Ensure all employees are aware of the process. If it is not being used, it may not be functioning effectively.
Disclaimer
This blog post is intended for informational purposes only and does not constitute legal advice.