Legal Question in Business Law in California

CEO's boyfriend is paid investment consultant for company

I am seriously looking at leaving the company I'm with over the fact that the CEO's (female CEO) boyfriend is a paid investment consultant for the company. Cash is tight, and payroll is on the verge of being delayed at least once every three pay periods, vendors/creditors are hounding us at every turn - and yet, checks to the boyfriend/consultant are cut immediately upon request for what Ive been told are substantial amounts.

There is a clear conflict of interest here. Considering the situation, what are the top ways this type of CEO/boyfriend/consultant relationship could be abused to the detriment of the company, it's employees and investors? I want to make sure Im not flying off the handle and come prepared with some solid rationale for my decision to confront this issue and submit my resignation.

Thanks,

Ed


Asked on 7/14/02, 3:05 pm

1 Answer from Attorneys
Martin Snitow

Re: CEO's boyfriend is paid investment consultant for company

I don't suppose the company has an independent board of directors? In today's business climate, any director should be concerned about personal liability if conflicts like the one you describe are not addressed. You might speak to them.

On the other hand, if the boyfriend is working to secure financing for the company, it may be entirely proper to pay his invoices. That is for the board to decide.

You do risk losing your job if you go over the head of the CEO. You might be eligible for unemployment insurance if you did it this way rather than quit. You might even get severance.

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Answered on 7/14/02, 10:57 pm


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