Should a sex scandal cost someone their job?

The resignation of CIA director David Petraeus over an extramarital affair is a reminder that high-profile individuals are not immune to the temptations of adultery.

But it also prompts the question: should a sexual indiscretion cost someone their job?

"At the end of the day, it depends on how [the scandal] reflects leadership within the organization," says Terry Flynn, a crisis management expert at McMaster University's DeGroote School of Business.

"Is your company one that values transparency and authenticity and integrity?"

'To me, having an extramarital affair in the workplace, at whatever level you're at, does not show good character or a sense of integrity from a leadership perspective.' — Glenn Rowe, Richard Ivey School of Business

If Petraeus were in his previous post, as a general in the U.S. military, it's quite likely he would have lost his job over his affair with his biographer, Paula Broadwell.

As an organization, the U.S. army explicitly forbids affairs involving members on active duty and retired officials receiving military compensation. Petraeus retired in 2010.

Flynn says that having an affair while director of the CIA is even more problematic, given the allegations that Petraeus shared secrets with Broadwell that may compromise national security.

The crisis management expert points out that as leader of the U.S. spy agency, Petraeus must uphold an image of incorruptibility, so that he cannot be blackmailed.

A question of character

"In today's world, we're looking for people of character to be leaders," says Glenn Rowe, who teaches strategic leadership at the University of Western Ontario's Richard Ivey School of Business.

People who cannot preserve that integrity should not be leading others, says Rowe.

He cites the case of Harry Stonecipher, former CEO of Boeing, who resigned from the aircraft maker in 2005 after it was revealed that he was having an extramarital affair with a female executive.

Rowe points out that during his tenure, Stonecipher helped craft a code of ethical conduct that was meant to reflect the company's new discipline. And then he broke it.

"How can people expect this person to lead with character, with integrity, if he's violating the very code he put in?" Rowe asks.

The Petraeus case involves unusually high stakes, but it demonstrates that the separation between public and private life is largely illusory.

"When a person is in a high position in a publicly traded company or in a military position or in a political position, your life is not your own," Rowe says.

He says that given the media's innate interest in the private lives of prominent figures, the public airing of an extramarital fling "could damage shareholder value in a public firm, could damage a privately owned company and certainly damages military leadership."

As a result, Rowe says, the individual must resign.

Protecting the brand

According to Jeffrey Dvorkin, a Canadian media analyst, anyone who accepts a leadership role must understand that they're also assuming accountability for the organization's brand.

"I think this is a managerial question, and it's about being really clear with people who are in charge of an organization that they have responsibilities that also involve the reputation of the organization," says Dvorkin.

Flynn says affairs can compromise any organization, no matter how small.

He sketches out an example of a family-run business with 100 employees. A number of the workers become aware that one of the executives has been unfaithful to his wife, who many of the employees know.

"You put them in a difficult ethical position: 'To whom do I have obligation? Do I have an obligation to the boss, who signs my paycheque, or do I have obligation to his wife, because [the affair] is not an appropriate thing?'" says Flynn.

Effect on morale

Dvorkin says that an affair becomes even more problematic when both individuals work for the company and one of them is in a managerial role.

This could lead to a toxic work environment where suspicions of favouritism run rampant, he says.

"The question is, what is the impact [the affair] has on the job and is this an issue of morale inside an organization if it's known that a superior is having an affair with a direct report," says Dvorkin.

Rowe from the Ivey School says that sexual indiscretions are problematic for any manager, regardless of how many people he or she oversees, and should be grounds for dismissal.

"To me, having an extramarital affair in the workplace, at whatever level you're at, does not show good character or a sense of integrity from a leadership perspective," Rowe says.