The Petraeus affair is short on substance - FT.com
15/11/12 07.15
November 14, 2012 6:46 pm
The Petraeus affair is short
on substance
By John Gapper
©Ingram Pinn
The sex scandal that brought down David Petraeus, the director of the Central Intelligence
Agency, this week has everything – compromising emails, a relationship with his admiring
biographer, a second femme fatale and a shirtless agent from the Federal Bureau of
Investigation. Everything but substance.
The US has lost a widely admired – perhaps too admired – intelligence and military strategist
while General John Allen, commander of US and Nato troops in Afghanistan, has also been
drawn into the investigation. And for what? One affair and some flirtatious emails. It is hardly
the Cuban missile crisis.
Mr Petraeus’s relationship with Paula Broadwell, reportedly after
he left the army as a four-star general and took charge of the CIA,
did not change how he did his job or was regarded by colleagues (until it was revealed by the
FBI). The FBI did not judge it to be a security breach. Had he been a business leader, it would
until recently have remained his own affair.
Now corporations are increasingly acting like the military. No matter what their formal policies,
they treat executive adultery as prejudicial to “good order and discipline” and evidence of poor
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The Petraeus affair is short on substance - FT.com
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judgment. As this scandal broke, Chris Kubasik, Lockheed Martin’s chief executive-in-waiting,
was dismissed for having an “improper” relationship and Marillyn Hewson replaced him.
There has been a rash of such cases since Harry Stonecipher was fired for alleged poor
judgment in having an affair as Boeing’s chief executive in 2005, although he hadn’t broken its
code of conduct. In May, Best Buy pushed out Brian Dunn, its former chief executive, for
becoming overfamiliar with an employee and then Richard Schulze, its chairman, for not telling
the board.
Perhaps such inquisitions are appropriate in the military, where fidelity and unity are matters of
life or death. But they do little for shareholders or customers, and not much for employees, in
the corporate world. If two consenting adults wish to have a relationship that doesn’t affect
colleagues, let no board of directors put them asunder.
This isn’t a demand to return to a Mad Men society in which male executives drink, smoke and
harass women. Some executives are accused of abusing power in ways that should be blocked.
Steven Heyer was ousted as chief executive of Starwood Hotels five years ago over allegations
that he had harassed employees, which he denied.
An affair with a subordinate can lead to favouritism, or suspicions of it among other executives
– one finding against Mr Dunn at Best Buy. If a male chief executive promotes a lover, flies her
around on a corporate jet or buys her gifts on expenses, more fool him.
But having an affair is not, in itself, evidence of bad judgment of a sort that should concern
boards, as opposed to spouses. Bill Clinton’s affair with Monica Lewinsky showed awful
judgment in his personal life, but it did not affect his ability to be a good president.
Even the CIA does not ban spies from having affairs per se, although it insists that they report
any past or present indiscretions which could expose them to blackmail. We don’t know
whether Mr Petraeus obeyed this rule and gained security clearance, or the FBI uncovered his
secret before the CIA did.
As The New York Times noted this week, US military officers are told to read a management
paper on the temptations facing leaders called “The Bathsheba Syndrome” after King David’s
seventh wife, whom he first espied from the roof of his palace, having a bath. The Bible says he
slept with her, got her pregnant and sent her husband Uriah into battle to get rid of him.
“The thing that David had done displeased the Lord” concludes the Book of Samuel, as well it
might. The point is that leaders gain power and privilege (the view from the roof) and believe
they can cover up transgressions (killing Uriah).
Promotion to senior command can lead to temptation. Dean Ludwig, a professor at Lourdes
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university and co-author of the Bathsheba paper, argues that command tends to involve
isolation. “You lose friends you can bounce things off, and let off steam with. It becomes quite
lonely,” he says.
The paper’s description of King David is uncannily reminiscent of Mr Petraeus and corporate
leaders ensnared in scandals: “A leader with a humble past, a dramatic and rapid rise to power,
strong organisational skills, a charismatic personality, an eclectic approach to problem-solving,
a strategic vision for his people, and a man of high moral character. He was a man who had it
all.”
When loneliness, charisma and the newfound power to wield resources are combined it makes a
potent brew. It is no surprise that there are so many recent cases of executive infidelity – and
these are just the ones that have been uncovered. It is unnatural to expect them to stop.
Companies need suitable codes of conduct to prevent abuses by such executives. Lockheed
Martin’s code, for example, says that any “close, personal relationship with a subordinate
employee” should be reported to a manager. It does not call it an automatic firing offence, which
was Mr Kubasik’s fate.
But they should watch for harmful side-effects rather than relationships in themselves. Instead,
some boards behave like military tribunals, treating affairs as inherently bad. In March,
Stephen MacMillan had to step down as chief executive of Stryker, the medical device maker,
after he asked directors for approval to date a female employee.
Both military and espionage services have reasons to be wary of ill-discipline, although Mr
Petraeus has suffered heavily for what was a plain affair. Companies are in a different position;
they must be careful where they tread.
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