Sir Rod Drury defends a relationship with an employee saying it was consensual, raising CEO conduct questions

Thursday, 23 April 2026

Former Xero CEO and newly crowned New Zealander of the Year Sir Rod Drury rejects allegations of sexual misconduct, saying his relationship with an employee a decade ago was consensual. He has also acknowledged “other relationships over that period” which he says were “consensual and mutual”. His acknowledgement raises broader questions about whether, if they were workplace relationships, they were appropriate for a chief executive. Paula Penfold reports

Former Xero chief executive Sir Rod Drury says a relationship with an employee was consensual, and has acknowledged having had “other relationships” during his time leading the company, but would not say whether that was appropriate.

In a public statement on Tuesday, issued in response to questions from Stuff about his conduct with staff, Drury said: “Any other relationships I had over that period were consensual and mutual.”

The acknowledgement appears to broaden the issue beyond allegations from one employee, raising questions about whether those relationships were appropriate if they were in the workplace.

Drury said he was issuing the statement “reluctantly to give more context and accuracy” following allegations of sexual misconduct by former employee Ally Naylor.

Naylor, a former IT project coordinator who began work at Xero in 2014, has alleged multiple instances of unwanted sexual contact by Drury at his apartment, invitations she felt unable to decline because he was CEO and she was a junior employee.

In 2017, she filed a formal complaint through Xero’s internal whistleblower process, which led to an investigation. Its outcome has not been disclosed.

Naylor has now made a police complaint and was interviewed on Wednesday.

In his statement, Drury said the reporting had “mischaracterised the nature of a friendship over several years. Ally Naylor and I had a limited, consensual relationship 10 years ago”.

He said communications showed “a friendship over the course of two years and that Ally was a willing participant in that limited relationship. That friendship was based on us working closely together and having children of a similar age.

“It is deeply upsetting to have these allegations made nearly a decade later.”

Naylor has rejected Drury’s characterisation.

She said she stood by her account that it was unwanted and inappropriate sexual contact, and that the formal complaint she made in 2017 was not made lightly, “particularly by a junior employee against a well-known CEO, at personal and professional risk”.

She also invited Drury to publicly confirm that he would not pursue legal action against anyone who wished to speak out about their experience.

On Wednesday, Stuff sent further questions about Drury’s statement that any other relationships he had over that period were consensual and mutual.

We asked how many relationships he had with employees while he was CEO of Xero.

We also asked whether there were any such relationships after Naylor’s 2017 complaint and subsequent investigation, either at Xero or in any other ventures he has been involved in since, and whether he considered it appropriate for a CEO to have such relationships with employees, given the inherent power imbalance.

In response, a spokesperson for Drury said, “We don’t have any further comment to make.”

Xero has launched an independent review led by Maria Dew KC into the handling of Naylor’s 2017 complaint and the company’s response at the time.

Stuff asked Xero for its position on a CEO having relationships with employees, and whether it considered such relationships appropriate irrespective of whether they were described as consensual.

A spokesperson for Xero said the company had nothing further to add beyond its previous statement.

What does the law say?

Employment lawyer Shelley Eden said, generally speaking, workplace relationships were a risk to an employer, especially when one of the parties is a CEO, “so in a position of power and authority over all the staff, even those who do not report directly to them”.

She said the Employment Relations Act acknowledges the fact that an employment relationship is characterised by an inherent inequality of power, and an employee may feel they can’t object, or “must go along to get along”.

“Due to the CEO's significant authority over an employee's career, remuneration, and job security, true consent can be difficult to establish. An employee may feel pressured to agree to or continue a relationship for fear of negative consequences if they refuse.”

Eden said the Employment Relations Authority recognises a subordinate is at “an inevitable disadvantage when a senior makes an overture”.

“And so what a CEO might see as a consensual relationship or interaction could be experienced very differently by the employee.”

She said it could also put the CEO in a conflict of interest situation.

“Can the CEO objectively make decisions about salary rises, promotions or performance? The CEO may have a duty to disclose the relationship as a conflict of interest.”

She said any employer that became aware of a senior executive in a relationship with a staff member would need to manage the situation, “to avoid the appearance of favouritism and improper decision-making, and to keep both parties safe”.

Eden said employers might want to consider policies regarding work relationships, “so as to protect the employer itself from risk … and to provide safe avenues for employees to raise concerns if they are being drawn into a relationship that they in fact do not want”.