Royal Bank of Canada fired its chief financial officer after she failed to disclose a personal relationship with a colleague who allegedly received promotions and salary increases as a result of the relationship. Nadine Ahn, the bank's first female CFO, had her employment terminated on Friday, along with the man she had a relationship.
The identity of the employee with whom Ahn had a relationship was not revealed. Canada's largest bank paid Ahn $3 million in fiscal 2023, a 25 percent salary hike compared to the previous year. When she was appointed to her now-former role in 2021, Ahn was the only female CFO among the Big Six Canadian banks.
Love at Workplace Costs Job
RBC said that it became aware of "allegations" against Ahn, leading to an investigation that revealed she had breached the bank's code of conduct by engaging in an "undisclosed close personal relationship with another employee, which led to preferential treatment of the employee including promotion and compensation increases."
The bank conducted an internal review and also sought legal counsel. It clarified that no evidence of financial misconduct was found during the investigation.
Before assuming the role of CFO, Ahn, who is in her early 50s, served as the head of investor relations at RBC.
Ahn's tenure at the bank began in 1999, where she held various financial positions before eventually being promoted to CFO.
RBC's official annual statement to investors outlines that if a senior executive at the bank is fired for cause, they may not receive severance pay and could forfeit other bonuses.
Loss of Salary and Image
The bank has named Katherine Gibson as its interim CFO as a replacement search commences. With a two-decade tenure at RBC, Katherine Gibson most recently held the position of Senior Vice President, Finance & Controller.
She was responsible for overseeing the board reporting process and managing the bank's accounting policy and financial management systems in the role.
According to The Sunday Times, it is significantly less common for a prominent female executive to lose her job because of an undisclosed relationship compared to male executives facing similar circumstances.
Last year, Bernard Looney, the former CEO of BP, was dismissed for not disclosing personal relationships he had with employees.
The oil giant was able to recover around $40 million in remuneration from Looney after determining that he had deliberately misled the board regarding multiple personal relationships with his colleagues.
