This report provides an analysis of a critical incident where a company CEO faces sexual harassment allegations. The report, written from the perspective of an ethical manager, examines the CEO's personal competencies and their impact on the organization. It delves into the background of the allegations, evaluates the situation using organizational behavior theories, and offers recommendations for key personal competencies required for effective leadership. The recommendations include teamwork, self-development, motivational skills, and conflict management. The report highlights the importance of creating a gender-neutral and respectful workplace, addressing the negative outcomes of sexual harassment, and promoting ethical leadership within the organization. The analysis is based on the Fitzgerald (1997) model of sexual harassment, considering organizational climate and job-gender context. The report concludes by summarizing the key findings and emphasizing the importance of addressing such incidents appropriately to protect the organization and its employees. The report also provides a comprehensive list of references to support the analysis.