Essex County Cricket Club chairman John Faragher has resigned following a historical allegation of racist language used by him at a board meeting in 2017, the club has announced.
Faragher stepped down after a meeting on Thursday. While he strongly denies the incident, the club is reviewing why it was not fully and independently investigated at the time.
New chief executive John Stephenson said: "There is no place for discrimination of any kind at Essex County Cricket Club.
"This is a proud club with a zero-tolerance policy towards racism and any form of discrimination and, as Essex Cricket's new chief executive officer, I will not hesitate to uphold those principles and drive out any form of discrimination that is uncovered."
The news follows the racism row which has engulfed Yorkshire County Cricket Club after it revealed it would not take disciplinary action against any of its employees, players or executives following a review into allegations of racism.
In September, the club said there was "no question" that bowler Azeem Rafiq was the victim of racial harassment and bullying during his first spell at the county.
News of the alleged incident involving Faragher only emerged this week.
Mr Stephenson, who took over day-to-day running of the County Championship club in October, said he had been only just been informed about the alleged incident.
He added: "I was made aware of this single allegation on Thursday having joined the club four weeks ago.
"The board met last night [Thursday] during which John Faragher's resignation was unanimously accepted by the board.
"We are committed to working with the England & Wales Cricket Board to eradicate discrimination from the game. This is an important first step, but the club must now act further.
"Our internal reporting mechanisms will be reviewed to ensure that matters such asthis are dealt with appropriately and immediately. I intend for those next actions to be communicated as soon as possible."
Analysis - Donovan Blake, ITV News Anglia sports correspondent
This news today will be a real shock to those who follow Essex cricket.
There's still no detail of the precise allegations, and it's important to point out at this stage that Mr Faragher denies the allegation.
Now, the club is reviewing why the matter was not looked into thoroughly and independently in 2017.
Given what's gone on at Yorkshire, where claims of institutional racism have been made, there's a clear desire at Essex to work with the ECB to stamp out discrimination.
New chief executive John Stephenson says it's an important first step - but the club must now act further.
The England and Wales Cricket Board has opened an investigation into the incident after a complaint was initially taken up with the governing body.
An ECB spokesperson said: "There is absolutely no place for racism or any form of discrimination in our game.
"The England and Wales Cricket Board opened an investigation into Essex County Cricket Club after receiving an allegation involving John Faragher, who has subsequently resigned as the club chair. The ECB is taking this allegation extremely seriously."
Huw Turbervill, editor of The Cricketer magazine, said he was surprised by the news.
"I wasn't aware of anything like this being in the pipeline. I've spoken to somebody who's involved with the club and it's come to them as a shock as well.
"I don't know exactly how much is going to come out now about Essex. It's a shame, it's a great regret. It's not a good look for this to have happened but they'll need to get to the bottom of it."
Watch an interview with Huw Turbervill, Editor of The Cricketer
Last year Essex County Cricket Club promised to work on their approach to diversity after a Muslim player was sprayed with alcohol during a trophy winning celebration.
The incident occurred after the club won the Bob Wills Trophy. Batsman Feroze Khushi, 21, had beer poured over him on the balcony at Lord's.
In a statement issued after the incident in September 2020, the club said the celebrations did not meet their values and they would work to educate their players.