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TheStreet Open House

Lockheed Martin Ousts Future CEO Over Relationship

Stocks in this article: LMT

"Such behavior is unacceptable, both as a husband and as the leader of an organization such as ours," Petraeus said.

William Sannwald, a professor of business ethics at San Diego State University, said there's no easy way to explain why executives continue to be ensnared in these sorts of ethical lapses.

"It just happens, and perhaps it's the power that comes with the position that makes them feel that they can be above scrutiny," he said.

As for Kubasik, his choice to get involved with a subordinate clearly reflects on more than just his personal life, Sannwald said.

"It's poor judgment on his part," Sannwald said. "And probably Lockheed might be better off that he didn't take the position, if he exhibits that kind of poor judgment in his own personal relationships."

Lockheed Martin's board elected the executive vice president of its electronics systems business to take Kubasik's role.

Marillyn A. Hewson, 58, will be president, chief operating officer and a director. She takes over as CEO in January. Hewson joined the company in 1983.

She will also keep her current role in the electronics systems business until the end of this year.

Lockheed Martin said that the company's operational or financial performance has not been affected by the matter.

"While I am deeply disappointed and saddened by Chris' actions, which have been inconsistent with our values and standards, our swift response to his improper conduct demonstrates our unyielding commitment to holding every employee accountable for their actions," Robert J. Stevens, chairman and CEO said in a statement.

Lockheed Martin's board also elected Stevens to serve as executive chairman beginning at the start of the year.

Lockheed Martin shares rose 6 cents to close at $89.98 on Friday.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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