Royal Bank of Canada fires female CFO Nadine Ahn over secret relationship with employee who received promotions and bigger pay

Nadine Ahn (pictured) was terminated from her role as RBC's CFO on Friday after an investigation into an undisclosed personal relationship she'd had with a colleague

Royal Bank of Canada made headlines as it terminated its chief financial officer, Nadine Ahn, following revelations of her undisclosed personal relationship with a colleague. The unnamed colleague reportedly received promotions and salary increases due to this connection.

Ahn, RBC's first female CFO, had her employment terminated on Friday alongside the individual involved in the relationship, whose identity remains undisclosed.

The colleague's identity was not revealed, though they were fired alongside Ahn after receiving preferential treatment included promotions and pay raises as a result of the relationship

During fiscal 2023, Canada's largest bank paid Ahn approximately $3 million USD, representing a significant 25 percent salary increase from the previous year. Her appointment as CFO in 2021 marked her as the sole female CFO among the Big Six Canadian banks.

RBC initiated an investigation after becoming aware of allegations against Ahn, ultimately finding that she violated the bank's code of conduct by engaging in an undisclosed close personal relationship that resulted in preferential treatment for the colleague, including promotions and increased compensation.

The bank conducted an extensive internal review and sought legal counsel, noting that no financial misconduct was uncovered during the investigation.

Before assuming the CFO role, Ahn, in her early 50s, held the position of head of investor relations at RBC, having joined the bank in 1999 and progressed through various financial roles.

Katherine Gibson was named interim CFO as a replacement search begins

According to RBC's annual statement to investors, executives terminated for cause may not receive severance and could forfeit other bonuses.

In the interim, Katherine Gibson has been appointed as the CFO, with a search underway for a permanent replacement. Gibson, with two decades of experience at RBC, most recently served as Senior Vice President, Finance & Controller, overseeing board reporting processes and financial management systems.

A news report noted the rarity of powerful female executives losing their positions due to undisclosed relationships compared to male counterparts. Notably, Bernard Looney, former CEO of BP, faced termination for similar reasons, with BP recovering $40 million in remuneration after concluding he misled the board about personal relationships with colleagues.