Norfolk Southern (NYSE:NSC) shares gained ground Monday, amid word its board is examining allegations that CEO Alan Shaw engaged in an inappropriate workplace relationship, according to three people familiar with the matter.
The company confirmed late Sunday evening it was probing Shaw over “possible conduct” that violated the company’s code of ethics and that it had hired outside legal counsel to investigate.
The probe is in its early stages, and it is possible that no misconduct may be uncovered. The company is working with outside legal advisors on the probe, two of the people said.
Shaw did not return phone calls or text messages requesting comment. The board is chaired by former Canadian National Railway (T.CNR) CEO Claude Mongeau, who also did not return requests for comment.
Norfolk Southern, a $57-billion company, is one of just a handful of Class 1 railroads left in the United States. Class 1 railroads haul huge amounts of commodities and freight, and are critical to the nation’s economy. Norfolk Southern’s operations span 22 states across the Eastern U.S.
Norfolk Southern’s board has undergone dramatic change over the last few months.
An activist investor earlier this year sought to oust Shaw from the top job at the railroad, over his handling of the toxic East Palestine derailment, the poor performance of Norfolk Southern’s stock and what the activist described as a flawed operating strategy.
NSC shares picked up $3.07, or 1.2%, to $253.08.