Harry Stonecipher was scorched by his own e-mail when the message found its way into a reporting system he created at Boeing Co. to help the firm rebound from a string of scandals.
Boeing directors asked Stonecipher, 68, to step down as president and chief executive officer of the Chicago-based company on Monday after his extramarital affair with another Boeing employee came to light when a tipster sent an excerpt from a "very graphic" e-mail to the company's ethics officer.
While it's uncommon for a major corporation to sanction a CEO for engaging in a consensual sexual relationship, the case indicates some of the changes in workplace expectations.
"Whatever happened is happening in a much more sensitized environment than a few years ago," said Brad Agle, director of the Berg Center for Ethics and Leadership at University of Pittsburgh's Katz Graduate School of Business.
"There's no question management and boards are much more sensitive to this than they were a few years ago."
Many companies prohibit relationships between employees involving a superior and her or his subordinate.
But despite an increase in codes of conduct and rules on behavior, the emphasis tends to be less on moral issues and more on the actions that could potentially affect the business: it's bad if it's bad for the bottom line. Boeing said that Stonecipher lost his job over the poor judgment he showed in having the relationship, not the affair itself, which the company said did not violate its code of conduct.
The company's directors felt that the man who had launched a high-profile campaign to clean up the company -- damaged by revelations that it had obtained a government contract by illicitly using a rival's documents and had illegal contacts with an Air Force official controlling contracts -- couldn't afford to look in the least soiled.
Stonecipher's case is unusual for many reasons, not least of which is how career-suicidal his actions were: He had established an ethics office at Boeing; he had established a code of ethics that all employees were required to sign each year; he had established a mechanism for reporting violations that included a toll-free "ethics hot line;" he had said that the code applied to all employees and promised to punish infractions even at the highest levels of management. And, working at a company that had been damaged by revelations that came from e-mail correspondence between Boeing and Air Force officials in 2002, he sent e-mails to the woman with whom he was having an affair on the company system.
Boeing's willingness to take quick action, however, indicates a change from the days when questionable conduct was often overlooked in CEOs and others in the category known as UGLI -- an "Untouchable, God-Like Individual" -- a term coined by Ellen Bravo, executive director of the 9to5 National Association of Working Women.
Many major corporations have formal policies concerning relationships between employees, according to a 2003 American Management Association survey. Eleven percent of respondents said their company banned employee dating altogether. More than 90 percent of those who worked for companies with policies on dating said only relationships between subordinates and superiors were prohibited.
"Whether it's enforced is always a question," said Dale Hershey, who teaches business law and ethics at Carnegie Mellon's Tepper School of business.
Hershey said beyond that prohibition, companies are reluctant to regulate the personal lives of their employees.
Instead, most make broad statements of how employees should act, frequently emphasizing to employees the importance of considering how their actions, words and writings would be viewed by others should they become public.
"As an employee, your personal conduct should reflect the highest professional standards of behavior," Mellon Financial's employee code of conduct advises. When in doubt, employees are told to ponder how customers, shareholders and other interest groups are likely to interpret their behavior.
Duquesne Light's three-page guidelines encourage the utility's employees to "rely on your own conscience and your common sense when faced with questions about the 'right' way to act."
"We're asking employees to look beyond what's in the black and white of these three pages," said spokesman Joe Balaban.
The tone set by the firm's leadership is important, Hershey said.
"What the top leadership does defines a corporate code within a company no matter what statement of ethical policy the company has developed," he said.
Allegheny Technology's 17-page manual includes an admission from L. Patrick Hassey, the company's chairman, president and chief executive officer, that rules "alone cannot assure a climate of integrity and ethical behavior."
"Each of us, through our daily actions, will determine what kind of company we are," he states.
The corporate scandals of recent years drive Hassey's point home.
"Enron had a beautiful code of ethics. Enron had an ethics officer," Agle said.