Lloyd’s says a relationship between former CEO John Neal and a female employee breached compliance policies and employment terms, and his behaviour fell “significantly below” standards expected of senior leaders.

The undisclosed relationship with former corporate affairs director Rebekah Clement was “sufficiently close” that it could “be viewed as creating a perceived conflict of interest”, a Council of Lloyd’s investigation has concluded after almost 40 witnesses were interviewed.

“The conduct of both Mr Neal and Ms Clement resulted in reputational damage to Lloyd’s Corporation and the Lloyd’s market,” it found.

Mr Neal also failed to ensure whistleblowing reports made in November 2023 were properly handled, the market adds.

“These were serious failures that should never have been allowed to happen,” Lloyd’s said.

Senior staff raised concerns with Mr Neal regarding his relationship with Ms Clement, and he acknowledged both the concerns and his responsibilities to Lloyd’s and undertook to modify his conduct.

“However, the investigation found no evidence of material change in Mr Neal’s conduct thereafter,” Lloyd’s said. “Mr Neal’s failure to address these concerns after they had been raised with him directly on more than one occasion fell significantly below the standards of judgment, transparency and accountability expected of a Lloyd’s chief executive.”

Mr Neal – who previously led QBE in Sydney – was Lloyd’s CEO from 2018 to last year. He was then expected to join Aon, and later AIG. But in November, AIG decided against appointing him president, agreeing to pay him $US2.7 million ($4.2 million).

Lloyd’s found no conclusive evidence Mr Neal and Ms Clement were engaged in a romantic relationship during their employment, or of process failures in the promotion of Ms Clement.

“As both Mr Neal and Ms Clement had left Lloyd’s [by the time of the investigation], the council’s ability to obtain certain potentially relevant information was limited. Both individuals declined to answer questions relating to the nature of their relationship following their departure from Lloyd’s and Mr Neal declined a request to provide access to his mobile device.”

According to Reuters, Mr Neal responded to the findings by stating: “I would have hoped less time and resource had been spent in reaching a conclusion on the central question that was, in truth, never in doubt.

“I am disappointed with the other findings and do not accept them, but I’m glad that all parties are now able to move on.”

Lloyd’s says Ms Clement should have modified her behaviour “given she was aware of rumours regarding the nature of her relationship with Mr Neal and should have disclosed the perceived conflict of interest”.

Ms Clement is now considering legal action against Lloyd’s, according to her lawyer Shah Qureshi.

“Rebekah is hugely disappointed with Lloyd’s conduct over the course of this investigation, the nature and length of which have caused her unnecessary stress and significant reputational damage relative to its ‘findings’,” Mr Qureshi said.

“She is not surprised that Lloyd’s found no evidence of an inappropriate relationship with John Neal, nor any evidence of any failings in her promotion. She also co-operated with the investigation throughout. Yet Lloyd’s has still chosen to find against Rebekah, on the pretext of ‘perception’, the source of which was rumour, gossip and innuendo.”

Lloyd’s says it has now adopted heightened council oversight, revised committee structures, changes to senior appointment procedures and enhanced disclosure requirements, and has imposed a “duty of candour” for CEOs.

It says it has also improved conflict resolution processes and the escalation process for whistleblowing. Lloyd’s is now updating its code of conduct, including guidelines around personal relationships at work and use of social media.

Chair Charles Roxburgh said: “Where standards were not best in class, we have put that right. However ... culture and personal accountability also play a vital role.

“The Council of Lloyd’s is unequivocal about the behaviour we expect from everyone, at every level.”