Here you can sleep with who you want but in the US they have strict rules about this kind of thing. It is generally considered unwise and inappropriate to be in an intimate relationship with some one you directly line manage. In a large organisation if it becomes an issue an individual can be moved to another post but in smaller organisations or when it involves senior managers it another matter.
Case one. The Director and assistant director are in a consensual sexual relationship. Members of the Senior Management Team complained to the deputy who had a word with board members about the negative impact this was having on the team, in the department and with partner agencies. Both are forced to leave the organisation and the deputy takes over as the new director. ( The fact that the Director was married was considered relevant by some board members)
Case two. The Director and assistant director enter into a consensual relationship. On learning of this the Chief executive required one of them to move to another organisation because of the direct line management arrangement. His preference was for the AD to move .They refused saying this was a private matter and was not impacting on their work. There were no complaints or concerns expressed by colleagues. This was a same sex relationship. Perhaps because of this and the fact it was a Local Authority it was discussed in the local media. It was only resolved when the Director took up a new post in another authority.
In both cases the individuals were senior managers who worked in the public sector responsible for services to children. In the first case it was dealt with as an internal matter and only a few people including HR were ever aware of it. In the second example the couple who had made no secret of the fact that they lived together went public when the chief executive requested one of them move. To the surprise of many the media and public response was this was a private matter. However the relationship between the chief executive and Director was damaged and a few months later the Director took up a new post in another authority as a chief executive! The AD also moved but not to the same Local Authority.
In my opinion in the first case the ambition of the deputy director played a part as did the disapproval of some board members to the fact that the Director was married. In the second example the chief executive appeared to be trying to protect the organisation from criticism but misjudge public opinion.
Intimate/romantic relationships at work become an HR issue only when they adversely affect working relations other wise they are a private matter but as these case examples show it’s not always that simple.