Boards and misconduct risk – a checklist

Here are 10 best practices that can be embedded into a company playbook for turning the #MeToo moment into constructive reform before it turns into a major governance crisis for the board:

1 . Insert into the CEO’s performance and compensation metrics the need to cultivate a healthy, diverse culture where employees feel respected and real opportunities exist for promotion irrespective of gender or race. A summary at year-end of progress on the culture front should be included in the annual report for investors.

2 . Expect the board’s risk or audit committee to oversee culture just as it would oversee cybersecurity. It would need to engage with the remuneration and people committee, just as that committee engages with audit and risk for performance and incentive payment purposes. The committee can receive quarterly reports on behavioural misconduct issues, pay and review promotions, and separation agreements with particular attention to “boy’s club” patterns. Also important: Diverse membership on the board’s risk committee.

3 . Establish a culture ombudsperson who reports to the board with a dotted line to help oversee Human Resources. As a credible resource for employees, many HR departments have been damaged by harassment revelations because they did not act unless the CEO was on board. The ombudsman can receive complaints if victims are too afraid to talk to HR or management.

4 . Retain third-party experts to conduct regular and anonymous “engagement” surveys that seek to determine how employees feel they are being treated. Make the survey results available internally and discuss them. If allegations arise, the outside parties should investigate them and report back to the board. Listen for any “rumour” mill because often where there’s fire, there is smoke.

5 . Mandate in-person training for all employees on respectful conduct at work and decide how management will address issues that surface in the climate survey. Incorporate bystander training/peer feedback to thwart offensive behaviours. Bystander reporting can help directors grasp the extent of an issue, especially given what often is significant underreporting by victims.

6 . Provide directors, managers and the workforce with training into unconscious biases in the workplace—those learned stereotypes that are unintentional, deeply engrained and able to sway behaviour—to address behavioural misconduct and to adjust their own lens.

7 . Employ strategic employee communications that do not dance around the facts and that make clear management actually is addressing a situation seriously. Explain in detail how complaints are handled, including protections for victims and complainants, the range of disciplinary actions that can be taken and why outcomes generally are kept confidential.

8 . Provide confidential counselling services to employees who believe they cannot perform at their best because of what they are experiencing directly or observing around them.

9 . Listen carefully and consider outside help if the organization lacks women and/or ethnic minorities in senior management. While executive coaching is often provided for women and ethnic minorities to help them advance, coaching of white males and managers as well as a genuine desire to determine where star talent lies are even more essential for change to happen.

10 . Emphasise that a respectful workplace is the best step toward organizational success. If this is hard to appreciate, pretend a whistle-blower has brought to the board’s attention the theft of millions of dollars from company coffers. That is how much losing talented employees will cost in today’s tight labour market if promising employees depart because they cannot bear to come to work or they file lawsuits for alleged discrimination, harassment or misconduct.

© Guerdon Associates 2024
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