Add this to your collection of business truisms: Bad judgment knows no rank. It’s not just people in the trenches or middle managers or subordinates who are guilty of missteps that reflect badly on the larger organization. All too often, the bad choices and dumb decisions are made in the executive ranks, too.

The most recent example is American Red Cross president Mark Everson, who resigned after admitting that he had engaged in a “personal relationship” with a subordinate. Everson had joined the Red Cross in May “as the charity sought to restructure itself after sharp criticism of its response to Hurricane Katrina,” according to an Associated Press report.

He is married and has two children, and joined the Red Cross after serving four years as IRS commissioner. Earlier, he chaired the President’s Management Council, which is composed of Cabinet department and major agency chief operating officers, while also serving as deputy director for management for the Office of Management and Budget. Everson also worked as a business executive and previously held several positions in President Reagan’s administration.

With a CV like that, you can see that this is a seasoned business executive, and that’s even more reason why Everson should have known that an office romance is almost always a bad idea … especially when you are already married with children. As I said here last month (see “Love in the Office: A Hot Trend, but Still a Bad Idea”),  “anyone who values their job knows better than to get involved romantically with someone at work. It can be a career-killer if handled badly (as so many office romances are) and takes the focus off the job at hand: the work.”

Like Caesar’s wife, senior executives must be above reproach. Whether they like it or not, they set an example for everyone else in the company for how to act, how to work and how to deal with the business of life. If they are casual and risky in their personal relationships, what does that say about how they will act in their business relationships?

Everson’s resignation is just the latest problem for the American Red Cross, an organization that has struggled with the very real perception that it was frequently too bureaucratic and unaccountable. Unfortunately for the organization, Everson had taken steps to overhaul the charity organization and improve its response and governance, and that work had begun to show up in the agency’s response to the recent Southern California fires. It was a promising start that, sad to say, will soon be forgotten as people focus on what he did wrong personally, instead of what he did right professionally.