On-Boarding Eradication Of Sexual Misconduct: Practical Suggestions For Boards

The Metropolitan Opera. Hollywood. Morning TV. Senate races. British MPs. Silicon Valley. The sexual harassment sagas continue to wind through politics, business, and personal tragedy. The list grows, as does the question where the buck stops for this behavior. Perpetrators are individuals. But lurking within these stories of worst kept secrets and cultures gone wrong is the question “where was the board?”

Sexual harassment is illegal and morally unacceptable. It is not a cutting edge ethical issue like those embattling regulators and innovative tech companies looking for the right allocation of responsibility for gig economy employees or social media abuse.

Here are eight high priority efficient and practical suggestions for boards proactively to reduce risk of sexual misconduct in their organization—whether Fortune 100 companies or Silicon Valley start-ups. There are no companies too small or early stage to be concerned with sexual misconduct.

Most boards in my experience are highly competent, hard-working and committed to the highest ethical standards, and it is (appropriately) impossible to know all that happens behind closed boardroom doors. But nothing in this list should fall within board confidentiality. On the contrary. These steps should buttress recruiting, retention, risk management and reputation. Employees, shareholders, customers, and other external stakeholders and the public expect no less—including of the venture capital world.

“Sexual misconduct is a universal organizational risk.”

First, boards should assume that sexual misconduct can involve any combination of genders, levels of seniority, and type of behavior. I have advised on several cases of junior managers harassing top executives; women harassing men; board members harassing each other; and subtle retaliatory behaviors like “forgetting” to let someone know that a meeting has been changed or leaving a colleague out of an email discussion.

Second, boards and management should filter ethics in the recruiting process, particularly but not exclusively for senior positions (including board members).  Relevant interview questions should probe candidates’ ability to withstand pressure to compromise ethics; willingness to make difficult decisions and speak up when they see potential (not just actual) wrong-doing; understanding of the various ways sexual misconduct can appear and hide within organizations; and detailed awareness of the learning from issues in the news. Boards of start-ups should watch founders as the company develops.

Candidates should also demonstrate a track record of proactive commitment to preventing and addressing sexual misconduct. Reference checking should verify prior employee relationship difficulties and legal matters. On the positive side, candidates should demonstrate a reputation for listening and addressing feedback about their behavior. Finally, job descriptions should include these character qualities.

Third, boards should see scandals in other organizations as opportunities to verify that similar wrong-doing is not happening in their shop—whether or not the scandal is in the same industry, such as financial services, or the same country, such as a high-corruption environment. Sexual misconduct is a universal organizational risk.

Fourth, boards should proactively probe the processes in place to prevent, detect, and resolve any cases of sexual misconduct and to protect victims. Boards should ask management for evidence of compliance and the level and type of grievances (e.g. the number of sexual harassment claims)–regularly, not post-scandal. Obvious procedures include: a formal sexual harassment policy with clear penalties for violation; mandatory sexual harassment training; and an anonymous whistle blower mechanism with multiple reporting outlets (e.g. Chair of the Audit Committee, Head of HR, an independent Ombudsperson or equivalent—not just line management or senior management). Boards should equally pursue and punish vexatious claims. Witch hunts and vendettas are serious ethical violations too.

But sexual harassment is not just a compliance or process point. Social awareness is key. Eric Holder’s report about Uber’s corporate environment included relevant social practices such as changing the hour for free dinners. Several companies have modified pub-like social settings.

Fifth, performance reviews (both remuneration decisions and promotions) should include affirmative demonstration of attention to sexual misconduct not just an absence of complaints. This “what have you done lately?” approach requires brief but compelling statements about how the individual regularly demonstrates awareness of sexual misconduct and contributes to prevention and detection. “What have you learned from recent events in the news?” is another annual question. Positive examples include a CEO observing senior management meetings for the gender dynamic, modeling appropriate responses to inappropriate humor, helping a colleague come forward with a question or complaint, and senior managers attending training with even the most junior staff to convey that everyone is protected.

Six, the board should be aware of the links between sexual misconduct and other drivers of highly contagious unethical behavior. Examples include: cultures of refusal to listen (e.g. the deaf ears at Wells Fargo to the multiple employee warnings that performance targets were impossible to achieve without cheating); insufficient attention to technology as a weapon of sexual harassment (e.g. social media, revenge porn sites, email and texting …); incentive structures that skew the risk reward calculation (e.g. Harvey Weinstein’s Hollywood power or the exceptional market cap and growth at Uber).  And they should assure that management regularly solicits reliable feedback on the workplace environment generally, as well as specifically on sexual misconduct issues.

Seventh, boards should be aware of external forces that help keep worst kept secrets. In general, these external contributors also gain from staying silent.   The fashion industry and extended Hollywood web protected Harvey Weinstein for decades…and benefitted from this refusal to acknowledge his behavior. To state the blindingly obvious, and often the evidence is indeed blindingly obvious, business meetings in hotel rooms (Harvey Weinstein), desk buttons that close office doors (Matt Lauer), and sexual encounters between adult men and 14-year old girls (allegedly Senate candidate Roy Moore) or 15-year old boys (allegedly James Levine) are simply impossible to justify.

Finally, in general I believe that boards should adopt zero tolerance policies sparingly and in service of prevention, detection and eradication of unacceptable behavior—not as a phrase to insert casually in corporate banter. But sexual misconduct is a zero-tolerance offense, as is insufficient board effort to eradicate it.