In the specific case of an employee and CEO (or board member), it seems that having a policy against that is reasonable.
We don’t let prisoners and prison guards fraternize. We don’t let military officers fraternize with enlisted soldiers (or NCOs with junior enlisted).
If I lead a team and I’m sleeping with one of them, it’s practically impossible for everyone to feel like they’re being treated equally.
In the same vein relations between managers and subordinates are not permitted, not to protect the well being of the subordinate, but to protect the well being of the corp.
Would never date my boss though if I didn't have an exit plan. Doubt you would ever get happy if such a relationship fails.
If we took on more of a French attitude about extramarital behavior (see: https://www.pewresearch.org/fact-tank/2014/01/14/french-more...), it would reduce the power that "the other woman" has... which might actually discourage some from assuming that role.
For another thing, his authority is only one source of power. She can go to the media, where even allegations could inflict huge damage. In this case, the employee seems to hold tremendous power since she could publicize a consensual (with her), though extramarital (not likely, though possibly, consenting from his wife) relationship in the workplace.
I'm not saying good, bad, right, or wrong. I'm just wondering what the power imbalance is in practice.
All true, but he could say to her boss "I don't like her, make life hard so she leaves". He doesn't even need to ask for her to be fired, just make life hell: move her desk near the toilets, don't invite her to meetings, give her the shit jobs etc.
What if you were her boss? Would you tell the guy at the top "No"?
Even if you had the balls, what's to stop him then going to your boss and pointing the finger at you?
It has all sorts of repercussions.