Governance Explainer Workplace relationships

Breaking up

Bernard Looney resigned as Chief Executive of BP on Tuesday 12 September 2023 after less than four years in the top job for failing to fully disclose details of past personal relationships with colleagues.

In May 2022, the board investigated allegations that the BP boss had engaged in personal relationships with company colleagues. During that review, Looney disclosed “a small number of historical relationships with colleagues prior to becoming CEO”.

At the time, the company found there had been no breach of its code of conduct and the board was given assurances by Looney “regarding disclosure of past personal relationships, as well as his future behaviour”.

However, fresh allegations were made recently, prompting the board of BP to reopen the investigation. Looney informed BP’s board that he did not fully disclose details of all relationships at the time of the 2022 review, which prompted his resignation.

The high-profile case highlights how disastrously wrong things can go if the issue of workplace relationships isn’t properly addressed by boards.

Why the fuss?

Many people will have read about Looney’s resignation and wondered what all the fuss was about. Office romances are pretty common, and many people meet their partners at work.

A 2020 survey in The HR Director publication revealed that 66% of workers in the UK have had a romantic relationship with a colleague and 28% found their current partner at work.

Indeed, there are no laws against dating a work colleague. But companies will usually have their own ‘code of conduct’ they expect staff to adhere to, which is likely to include a section on workplace relationships.

Companies are unable to ban relationships between work colleagues, but boards are understandably keen to ensure staff act professionally while at work.

If one party is more senior than the other it’s easy to see how the more powerful party might be tempted to use their position to give the other an unfair advantage over colleagues, particularly when decisions about promotion or redundancies have to be taken. Equally, there is a risk they may abuse their position to punish the other in the event of an argument or breakup.

There could also be power dynamics at play within the relationship, with one party feeling obligated to entertain a romantic relationship for fear of repercussions, such as an unfair dismissal.

It is even more critical that the board monitor these ‘power dynamics’ if senior executives are involved in a relationship at work.

What can boards do?

Large employers are increasingly adopting a written policy on personal relationships at work. In many cases, these allow relationships between colleagues as long as they disclose their relationship to management or, in the case of a senior management, the board. The higher up in the organisation you are, the more severely the policy is applied.

Workplace policies may allow companies to transfer one or both employees to another department or change their reporting lines if there is a conflict of interest and in serious cases, where a breach has occurred, disciplinary steps can be taken.

Increasingly, companies are requiring employees involved in relationships to sign ‘love contracts’ – these are more common in the US, but they are creeping into UK corporate life.

These are designed to limit the liability of an employer whose employees are romantically involved -so that one party can’t bring a sexual harassment lawsuit against the company at a later date.

The love contract will state that the relationship is consensual, and may also stipulate rules for acceptable romantic behaviour in the workplace.

In 2018, ‘magic circle’ law firms Clifford Chance and Linklaters introduced love contract policies requiring staff to report workplace relationships in order to guard against imbalanced workplace relationship dynamics and avoid any professional conflicts of interest.

Rules are also evolving because of the #MeToo movement. For example, Facebook and Google allow employees to ask a coworker out once, and if the person says no or gives an ambiguous response (“Sorry, I’m busy”), the employee is not allowed to ask again.

Better directors for a better world

The IoD supports directors and business leaders across the UK and beyond to learn, network and build successful, responsible businesses.

Enhancing transparency and accountability

Browse valuable governance resources from the IoD.
Internet Explorer
Your web browser is out of date and is not supported by the IoD website. It is important to update your browser for increased security and a better web experience.