The finance director of a leading UK electronics company has resigned with immediate effect, after recognising that a personal relationship with a colleague showed “some shortcomings of judgment”.
David Egan, who had been at the electronic products distributor RS Group for seven years, quit as chief financial officer and director.
In a statement to the FTSE 100 company’s shareholders, Egan said he had recently notified the company’s board of a “personal relationship with a colleague”.
After a review by the board, Egan admitted “some shortcomings of judgment on my part” and said his actions had “fallen short of the high standards expected of RS leadership”. The CFO, who has served twice as RS Group’s acting chief executive, said he believed it was right for him to step down.
The London-based company, which distributes electrical and electronics components to manufacturers, said it had appointed Jane Titchener, a senior member of its finance team and the vice-president of corporate development, as its interim CFO until a permanent replacement is appointed.
RS Group said Egan would remain available to the company during an “appropriate transition period”. The company’s chair, Rona Fairhead, said the board had accepted Egan’s resignation. Fairhead, a former trade minster and former chair of the BBC Trust, thanked him for his service.
It comes after the former boss of McDonald’s Steve Easterbrook, was fined $400,000 (£328,000) in January by the US regulator for “concealing the extent of his misconduct” over a relationship with an employee.
The British executive was fired by McDonald’s in 2019 after directors discovered he had failed to disclose a secret relationship with a senior female employee at the company. McDonald’s accused Easterbrook of “poor judgment” and said he had “violated company policy”.
The US Securities and Exchange Commission (SEC) said it had fined Easterbrook because he had made misleading statements to investors about the circumstances leading to his termination. It said the company’s lack of honesty with investors allowed Easterbrook to “retain substantial equity compensation that otherwise would have been forfeited”.
The SEC said it found that Easterbrook had violated the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. “Without admitting or denying its findings, Easterbrook has consented to entry of the SEC’s cease-and-desist order, which imposes a five-year officer and director bar and a $400,000 civil penalty,” it said.
RS Group said there was no change to its profit forecasts since its last trading update published on 5 April. However, its shares fell by as much as 2.5% during morning trading on Wednesday after Egan’s announcement, making the company one of the biggest fallers on London’s FTSE 100 index of leading UK companies.
The company has recently faced a drop in sales in the US but forecast last month that its annual operating profit would come in slightly ahead of analysts’ expectations. It will report its annual results on 23 May.
