When the Big Boss Behaves Badly: 3 Things HR Wants to Do in Wake of Nvidia Scandal

What happens when the big boss behaves badly?

It’s a question HR pros are asking in the wake of the Nvidia scandal: The CEO, Jensen Huang, had admitted to one extramarital affair and another is alleged. One of the mistresses is accused of being a Chinese spy, possibly compromising national security. The other is alleged to be a C-Suite employee who reported to him, likely compromising workplace relationship policies.

He resigned within days from the company he built over three decades, prompting company stock value to plunge and trust to be broken within the organization and beyond.

“The Nvidia case is an example of how crossing a conflict-of-interest policy has destroyed shareholder value and may have put certain intellectual property at risk, have national security implications, and have jeopardized its own competitiveness,” says Hanna Hasl-Kelchner, a business strategist, podcast host and author of Seeking Fairness at Work: Cracking the New Code of Greater Employee Engagement, Retention & Satisfaction. 

Nvidia Scandal Opens Up Questions

CEOs aren’t new to scandal. But the latest headline-grabbing breach of trust leaves many people leaders wondering: What kind of example does that set for employees and how do we respond?

Sure, most HR pros will never face a scandal of this magnitude. But in many organizations, leaders cross ethical lines and the word gets out — even if it’s through the grapevine, not local media outlets.

So what can HR do in the wake of a scandal? Whether it’s your own, or you want to use a national scandal as a teaching/reminding moment, Hasl-Kelchner suggests:

1. Recognize It

Really, the last thing you want to do is bury your head in the sand. Rest assured, people will talk about it, even if it’s supposedly not out in the open. Gossip will always be darker than an ugly truth.

“Employees will always notice bad behavior and the longer it’s allowed to continue the more it gets excused and normalized,” says Hasl-Kelchner.

Acknowledge that something has happened, giving as much information as you legally can. And then lean into your policies.

“I’d emphasize how all employee actions are critical to the company’s success and how policies are designed to set boundaries and provide a set of rules that keep everyone rowing in the same direction,” says Hasl-Kelchner.

2. Review Pertinent Policies

Most workplaces have codes of conduct around ethics, workplace romances and conflicts of interest. Yes, Nvidia’s code of conduct calls for employees to contact HR’s legal arm if they’re “involved in a situation that could present a perceived or actual conflict of interest.” That includes relationships and investments.

“Breaks in ethical behavior demonstrate poor judgment and violate trust in the individual, in the leader, the company, and even in the product,” Hasl-Kelchner says. “It destroys reputations built over years in a heartbeat. Ethics isn’t some “woke” concept; it’s about fairness and integrity.”

So, remind employees of your code of conduct or whatever you use to ensure ethical behavior. Be sure to share without making employees feel like they’re responsible for what’s happened.

3. Address Data Security, Breaches

This scandal is a perfect opportunity to review and communicate your data security policies and practices.

It’s still unresolved whether Nvidia’s CEO’s action has caused or will result in a national security breach. But the potential for that has employers on higher alert for data breaches or cyberattacks.

That’s your cue to remind employees how important it is to follow your data security protocols.

“HR can highlight the importance by noting how market fears about data security have already caused the stock price to drop significantly and that loss in shareholder value has likely affected employee 401(K) accounts and stock option plans at senior levels,” says Hasl-Kelchner. “Confidence in data security needs to be restored ASAP. The failure to do so could have seismic consequences and even sink the ship.”