Cboe’s CEO resigns: Yet another chief ousted for undisclosed relationships

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Cboe Global Markets’ CEO and chairman, Edward Tilly has resigned after failing to disclose personal relationships with colleagues, bringing his decade-long stint at the helm to an abrupt end. 

The Chicago-based exchange operator announced the news in a statement on Tuesday following an investigation—launched in late August—that determined Tilly’s lack of transparency “violated Cboe’s policies and stands in stark contrast to the company’s values”.

Fredric Tomczyk will succeed Tilly as Cboe’s chief. From 2008 to 2016, Tomczyk, who has been on the company’s board since 2019, was president and CEO of the parent company of brokerage TD Ameritrade.

William Farrow III, the Cboe board’s lead director, has been named nonexecutive chairman.

A Cboe veteran, Tilly rose through the ranks as a clerk on the business’ trading floor in 1987 to CEO in 2013. Under his watch, the company’s stock stock more than tripled.

Cboe said Tilly’s conduct and subsequent departure doesn’t impact the company’s strategy, financial performance or operations.

It remains unclear whether those undisclosed relations happened while Tilly was CEO or prior to his tenure at the helm, or what sparked the internal investigation. 

Cboe declined to comment on the matter, meanwhile, Tilly did not respond to Fortune’s request for comment.

BP chief’s similar shock resignation

Tilly is the latest CEO to be forced out for undisclosed relationships with colleagues—just last week, BP’s Bernard Looney was ousted under similar circumstances. 

The oil giant’s chief disclosed a “small number of historical relationships” with colleagues prior to becoming CEO in February 2020 during an investigation in May 2020—and no breach of company rules was found.  

However, following further investigation after anonymous tip-offs, Looney admitted to not being entirely transparent and resigned. BP has now launched a review of all personal relationships between staff to root out ‘problematic’ conduct, according to the Guardian. 

In many companies executive relationships aren’t entirely prohibited—despite being generally frowned upon—however, they must be fully disclosed to the board and HR. 

Earlier this year, CNN president Jeff Zucker resigned from his post after appearing to similarly mislead the board over a relationship with a staffer.

“As part of the investigation into Chris Cuomo’s tenure at CNN, I was asked about a consensual relationship with my closest colleague, someone I have worked with for more than 20 years,” Zucker told employees in a memo. “I acknowledged the relationship evolved in recent years. I was required to disclose it when it began but I didn’t. I was wrong. As a result, I am resigning today.”

Zucker did not name his colleague, but the company’s chief marketing officer and senior vice president of communications Allison Gollust confirmed the romance in a separate statement where she similarly described how their relationship “evolved” during the pandemic. 

“I regret that we didn’t disclose it at the right time,” she echoed.

Employer-employee relationships are becoming increasingly frowned upon

Some companies go one step further and ban relationships between managers and their reports altogether to avoid any risk of abuse of power: Take McDonald’s: the food giant’s CEO Steve Easterbrook was fired in 2019 for a consensual relationship with an employee, which violated the company’s fraternization policy.

What’s more, earlier this year it was revealed that Easterbrook had been fined $400,000 by the regulator, the U.S Securities and Exchange Commission (SEC), for covering up additional inappropriate relationships with employees and making “false and misleading statements to investors about the circumstances leading to his termination”.

Research shows that the number of ousted CEOs is growing as the #metoo movement influences the standards to which we hold leaders in the corporate world. 

Data from Exechange.com, which has tracked CEO departures for companies in the Russell 3000 stock index since the start of 2017, shows that misconduct-related exits are rare but on the rise. Meanwhile, last year, half of the forced CEO departures among the 3,000 largest US companies were due to personal misconduct, up from 14% in 2017, according to the Conference Board.

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