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Office romance at Boeing raises questions

Harry Stonecipher was Boeing's very own ethics czar.

“You have to look it squarely in the eye and deal with every issue they bring up,” the Boeing CEO said in December 2003.

But violating the code of conduct he developed, by having an extramarital affair with a female executive, cost the CEO his job.

“We saw things surrounding the relationship that we thought were potentially embarrassing and therefore compromised Harry's ability to lead the company,” says Lewis E. Platt, chairman of the Boeing Co.

That swift reaction has some wondering if there's a new morality in corporate America.

“This is sophomoric behavior that, granted, five years ago, would have been tolerated if some of these numbers were up, if shareholder value had increased, but right now everyone is being held to a higher level of scrutiny,” says executive recruiter Brian Sullivan.

Office romances are commonplace. A survey this January by found 56 percent of employees have dated a co-worker and one in four dated someone higher up. But in the aftermath of Enron, Worldcom and Tyco — some of the biggest corporate scandals in history — CEOs are under a microscope.

Freada Klein consults on sexual harassment issues. She says several companies have called her to deal with top executive affairs but Boeing's reaction is unique.

“What's rare about this case is for somebody to be ousted after what appears to be one consensual relationship,” says Klein. “When CEOs get ousted it is after a string of relationships that aren't clearly consensual.”

Boeing turned to Stonecipher 15 months ago, after it was rocked by scandal. Its chief financial officer had illegally offered an Air Force officer a job while the company negotiated a $23 billion contract, and it had been stripped of Air Force contracts for using a rival's proprietary documents.

Though some may wonder how a president of the United States could survive a sex scandal, but not the CEO of a major corporation, the answer is: The rules have changed.

“Boards of directors now are scrutinizing all kinds of mismanagement, whether it’s financial mismanagement, whether it’s hormonal mismanagement,” says Sullivan.

It's all part of an effort to make sure the company’s business affairs are only about business.