TMX Group Inc. announced Friday that its chief executive, Lou Eccleston, will be retiring early, less than two months after years-old allegations of harassment were raised about him in a media report.
In a statement, TMX said Eccleston “believes it is in the best interests of TMX Group, including its employees and stakeholders, for him to retire early.”
His departure comes after the board of directors of TMX retained an independent investigator to probe “historical allegations against Mr. Eccleston,” which were revealed in an article published by Business Insider in late November.
The focus of the article was Michael Bloomberg, who is running for president of the United States, and it detailed a series of employee lawsuits against Bloomberg LP, the New York-based financial data and news company he founded. Eccleston, a former Bloomberg employee from the late 1980s until 2002, was not named in any of the lawsuits, but according to the article some employees had accused him of inappropriate behaviour in court records and filings with the New York Division of Human Rights.
A statement issued by TMX in November, after the article was published, said the firm would be looking into the allegations and added that Eccleston had informed the board that he supported this course of action.
TMX said Friday its investigator found “no evidence that Mr. Eccleston engaged in sexual harassment or sexual misconduct while employed at TMX.”
In the statement, board chair Charles Winograd said the board accepted Eccleston’s decision to retire and recognized his “outstanding efforts” since taking on the CEO role in October 2014.
“With Lou’s retirement, the board of directors is concluding the investigation into the historical sexual harassment and sexual misconduct allegations to avoid further distraction to the company,” TMX said in the statement.
John McKenzie, a 19-year veteran of the Toronto-based bourse, and its current chief financial officer, was named interim CEO, effective immediately.
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A search will be conducted to find a permanent CEO, with both internal and external candidates considered, TMX said.
Richard Leblanc, a professor of law, governance and ethics at York University, said the board did the right thing by forming a special committee and retaining an independent investigator.
“This is all best governance practice,” he said, adding that an expanded scope to include “pre-TMX conduct” as part of
the investigation would have been complicated in terms of getting access to witnesses and documents.
“This is likely why the investigation was narrow,” he said.
Companies engaged in this type of process are also likely to review disclosure and background check requirements for hiring senior executives, said Leblanc.
“Boards are much less forgiving for reputational risk now, even if it was in the distant past,” he said.