QBE boss John Neal seen with personal assistant Lucy O’Reilly outside of work

THE cost of QBE boss John Neal falling for his personal assistant is high, and outside the workplace they remain inseparable.

QBE's CEO John Neal pictured with Lucy O'Reilly, his PA. Picture: Jenny Evans

EXCLUSIVE

QBE boss John Neal kisses his sweetheart on top of the head and hugs her from behind as they ride the escalators in an up-market mall. The body language is obvious: for him, Lucy O’Reilly is priceless.

Which is just as well. The cost of falling for his personal assistant — again — has been high. And with their next stop being Tiffany & Co, it’s rising.

Mr Neal was recently docked $550,000 by QBE’s directors for not disclosing the office romance quickly enough.

The board’s choice to make its decision public has thrown a spotlight on a new trend sweeping corporate Australia — a rush to put in place rules covering the disclosure of “close personal relationships”.

Workplace lawyers argue it’s simply good governance. But leading recruiters say it is the wrong way to go.

QBE's CEO John Neal pictured with Lucy O'Reilly, his PA. Picture: Jenny Evans

Such clauses were unheard of just two years ago, said Tim Greenall of Melbourne law firm Madgwicks.

“It’s now become a prevalent trend in sharemarket-listed companies,” Mr Greenall said.

The trigger was an unfair dismissal case brought by a Westpac manager sacked after failing to fess-up about a fling with a subordinate.

“It’s surprising it’s taken so long to take hold,” Mr Greenall said. “But it’s a difficult issue to talk about openly.

“It’s quite front and centre now. John Neal is a high-profile example.”

After the board of the $15 billion insurance behemoth learnt of the relationship between Mr Neal and Ms O’Reilly, she chose to leave the company. There is no suggestion she did anything wrong.

Outside the workplace they remain inseparable — unashamedly engaging in public displays of affection.

QBE's CEO John Neal pictured with Lucy O'Reilly, while shopping. Picture: Jenny Evans

When News Corp Australia came across the couple in Sydney’s CBD last weekend they were holding hands on their way to a casual lunch at well-regarded eatery Fratelli’s, inside the mall beneath Centrepoint.

Carefree and arm-in-arm, from there they popped in to Salvatore Ferragamo to buy Mr Neal some new shoes then went to Tiffany’s.

Home is an expansive Elizabeth Bay unit still held in the name of Mr Neal’s wife Helen, from whom the 52-year-old separated last year — before the relationship with Ms O’Reilly began. The unit, which has sweeping views of Sydney Harbour, was bought for $6.3 million in 2012 and may now be worth $10 million-plus.

QBE was ahead of the curve in its approach to workplace romances because it included a close personal relationships disclosure clause in its code of business ethics and conduct in 2014. It was specifically concerned that conflicts of interest could arise.

Mr Neal was well across the policy: he penned the introduction.

“It is not just what we say that matters, it is what we DO,” he wrote.

Mr Neal did tell the board about his relationship with Ms O’Reilly. But in its view he took too long.

QBE's CEO John Neal with Lucy O'Reilly. He did not disclose his relationship with her to the QBE board. Picture: Jenny Evans

So, in its annual financial results published in February, it revealed it had docked him 20 per cent of what would otherwise have been a $2.76 million bonus, adding: “The Group CEO has had a commendable year and delivered a strong full year result for QBE. His performance is well regarded by the board.

“However, both parties agree some recent personal decisions by the CEO have been inconsistent with the board’s expectations,” the remuneration report contained in the results said.

At the time Mr Neal told reporters: “It’s been properly disclosed in the (remuneration) report. It’s a material amount (of money) for me, I’ve understood it, I’ve accepted it, but it was not my decision.”

QBE's CEO John Neal and Lucy O'Reilly are in a relationship. Picture: Jenny Evans

And earlier this month, following the company’s annual general meeting in Sydney, he said: “I think I did what I felt I should have done at the right time, and the board had a different view.”

Madgwicks’ Mr Greenall said: “If it’s disclosed it can be managed.”

A source who has spoken to both Mr Neal and the board about the matter said: “The thing is: when did it cross over into being a relationship?”

The source did acknowledge that the CEO of a risk-based business could be expected to err on the side of caution and therefore disclose early rather than late.

“He told them, but not soon enough in their opinion,” the source said. “And the board is always right.”

QBE's CEO John Neal pictured with Lucy O'Reilly, while out and about. Picture: Jenny Evans

But leading recruiters say close personal relationship clauses are the wrong way to go.

“It’s going to create more of an issue because (workplace romances) are going to be kept secret,” said Michael Page Australia managing director Adrian Oldham.

“And for an employer to engage and retain a modern workforce — which is only getting younger — the more rules and policies you have in place, the less attractive it is.”

A better solution is increased transparency about how decisions are made, Mr Oldham said, and to make sure groups — not individuals — are responsible for decisions around work conditions, bonuses and advancement.

Gossip columnists have sneered at Mr Neal’s fondness for PAs.

But another source who knows him said: “He’s just a nice, quiet, hardworking guy who doesn’t have a chance to get out much.”

Mr Neal repeatedly declined to be interviewed or answer questions for this story, as did QBE.