The CEO of Norfolk Southern Railroad just got fired for sleeping with the company’s Chief Legal Officer. Nabanita Nag was fired, too. The board terminated Alan Shaw with a little extra “prejudice.” He was fired “for cause.” That means he won’t have any golden parachute to break his fall.
Norfolk Southern acts quickly
Norfolk Southern Railroad has been a train wreck in progress since Alan Shaw took over as CEO two years ago. The 28 years he spent working his way up the ladder to that point don’t count for anything. All that matters is the string of major disasters which have happened on his watch.
“Engaging in a consensual relationship with the company’s chief legal officer” doesn’t do good things for investor confidence.
On Wednesday, September 11, Norfolk Southern issued a statement explained that Shaw had been dismissed “for cause.” They didn’t spell out what’s so special about that. It means they could “prevent him from collecting the kind of exit package that CEOs often receive when shown the door.”
A few days earlier, on Sunday, the company revealed that “Shaw was the subject of an investigation.” They didn’t say what they were investigating. Now, we know.
The entire two years that Shaw’s been CEO of “one of the nation’s four largest freight railroads” has been turbulent. Norfolk Southern went through “contentious labor negotiations that nearly resulted in an economy-crippling strike,” then the major crisis in East Palestine, Ohio.
Residents there will never fully recover from the effects of exposure to toxic substances.
Sleeping with your lawyer
After their tank cars full of toxic chemicals were laying by the side of the tracks after derailment, a decision was made to do a controlled burn to avoid an explosion. Norfolk Southern already had advice from the maker of the tank cars not to do that because it totally wasn’t necessary.
The railroad suppressed that information and kept it away from all the officials making the controlled burn decision. That leaves a lot of legal liability. Sleeping with your lawyer isn’t a good idea.
“Nabanita Nag has been terminated from her roles as executive vice president corporate affairs, chief legal officer and corporate secretary, effective immediately, in connection with the preliminary findings of the Board’s ongoing investigation.”
Norfolk Southern appointed “CFO Mark George as the company’s new CEO.” They have full confidence in his abilities but that’s what they said about Shaw when they promoted him.
It was interesting to note that “the company’s statement contained no expression of thanks to Shaw for his 30 years with the company, nor any statement from Shaw, who could not immediately be reached for comment.” Shaw hasn’t been popular and things the NTSB had to say didn’t help.
Jennifer Homendy, chair of the National Transportation Safety Board, which investigated the accident said “Norfolk Southern’s actions following the derailment put first responders and neighbors of the derailment site at unnecessary risk.” She also said Norfolk’s actions during their investigation were “unprecedented and reprehensible.“
