John Faragher denies the allegation he used racist languageEssex chairman John Faragher has resigned following an allegation he used racist language in a 2017 board meeting.
Faragher strongly denies the allegation but Essex say they will review why the matter was not fully and independently investigated at the time.
He stood down from his post following a board meeting on Thursday.
"There is no place for discrimination of any kind at the club," chief executive John Stephenson said.
Former Essex opener Stephenson, who only took over the day-to-day running of the county in October, said he first found out about the alleged incident this week.
"I was made aware of this single allegation on Thursday," he added.
"The board met last night [Thursday] during which John Faragher's resignation was unanimously accepted.
"This is a proud club with a zero-tolerance policy towards racism and any form of discrimination. I will not hesitate to uphold those principles and drive out any form of discrimination that is uncovered."
Faragher, who was appointed Essex chairman in 2016, oversaw County Championship title wins in 2017 and 2019, a T20 Blast triumph also in 2019 and the county lifting the Bob Willis Trophy in 2020.
His resignation comes in the wake of a racism scandal at Yorkshire involving former player Azeem Rafiq.
A report found Rafiq was a victim of "racial harassment and bullying" but the county said it would not discipline anyone, drawing widespread condemnation.
However, a number of resignations have followed including chief executive Mark Arthur and chairman Roger Hutton.
John Faragher (third from left) helped oversee Essex's first County Championship title win for 25 years in 2017Analysis
Glenn Speller - BBC Essex sports editor
This will come as a huge shock to the Essex Cricket family after so much success over recent years.
The club is heavily invested in its community activities and has been particularly strong with its work within Asian communities both in the county of Essex and East London.
My understanding is the alleged comment was an outdated phrase being used rather than it being directed at any specific individual or ethnic minority. The club are to review procedures in terms of how allegations such as this are reported so they can be dealt with "appropriately and immediately".
John Faragher was an extremely well-regarded chairman and one not afraid to ruffle the feathers of those at the ECB in charge of the county game.
His hands-on approach drove the club forward from a period of mediocrity to oversee two County Championship titles, two Second Division titles, a Bob Willis Trophy victory and their first T20 Blast win.
His tenure as chairman was due to end early next year although there were many who wanted to see it extended.
