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Corporate sexual harassment scandals have abounded in recent headlines, with organizations such as The Weinstein Co., Fox News, Uber Technologies, Wynn Resorts, Lululemon Athletica, and others finding themselves under a harsh spotlight. In each case, the company emerged from scandal with its reputation significantly damaged.
Has your board reflected upon the #MeToo and #TimesUp social movements, and about the continuing wave of CEO resignations amid misconduct allegations? Whether you are a member of the board of a public, private, or nonprofit company, procedures for addressing and preventing sexual harassment must be on your board’s agenda. Directors need to do the right thing for employees, for customers, and for all stakeholders. The time for boards to act is now.
As advisers to boards for a combined 40 years, we have had many discussions about the challenges facing companies. Understanding risk appetite and ensuring the company has a process in place for managing its risks is usually at the top of the list.
When we delve deeper into how boards manage risk, we often hear that different risks are monitored by different committees. For example, accounting risks come under the purview of the audit committee, and risks related to cash and stock incentive programs are monitored by the compensation committee.
But what about sexual harassment? Companies generally agree that while sexual harassment in the workplace is unacceptable behavior on the part of an individual, the ensuing silence or lack of consequences for the behavior reflects a problem with corporate culture — and, ultimately, culture is the responsibility of the entire board.
This begs the question: How do we monitor culture and focus board attention on preventing sexual harassment and misconduct at their organizations? Our answer, based on experience helping boards increase effectiveness, is that directors must first implore their board chair to put this topic on the board agenda. Even though it may be an uncomfortable issue, boards must start the dialogue about this “new” risk. To begin, we suggest directors ask the following seven questions:
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How do our current policies measure up to best practices?
Too often, the board does not read company policies or require human resources leadership to review policies and procedures annually to gauge the effectiveness of the reporting process.