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What Recent Sexual Harassment Headlines Teach Us about Compliance

Posted by Margaret Scavotto, JD, CHC on 12/19/17, 7:03 AM

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Yes, there is a connection.

I suspect most individuals read the latest #MeToo news stories with a strong, sometimes complex, and personal reaction.

For those of us who chose a career in compliance, there are lessons for our professional lives as well.

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I regularly read Knowledge@Wharton, an online publication by the University of Pennsylvania’s Wharton School of Business that brings Wharton’s expertise to cutting edge issues. On November 28, 2017, Knowledge@Wharton published: What Can Firms Do to Prevent Sexual Harassment? In this article, Wharton management professor and director of Wharton’s Center for Human Resources Peter Cappelli hit the nail on the head: “I think the big challenge is that we have in recent years moved power away from bureaucracies and rules in companies and toward individual leaders. So we have many institutions where the leaders are all-powerful….”

The headlines of late bolster this notion that individuals in positions of power can have a profound effect on a corporation’s culture of discovering and rectifying misconduct. And, as we have also learned from the headlines, this concentration of power can lead to and perpetuate misconduct: “He couldn’t sleep around town with celebrities or on the road with random people, because he’s Matt Lauer and he’s married. So he’d have to do it within his stable, where he exerted power, and he knew people wouldn’t ever complain.”

Can your staff complain about the boss?

In an overwhelming number of #MeToo incidents, it took years – in some cases, decades – for the accusers to come forward. Or, the accusers did come forward, but it took years – or decades – and a surging social media movement for their accusations to be heard.

Why? As Cappelli puts it:

The fact that boards of directors in many companies are still chaired by the CEO is one manifestation of putting a leader above monitoring by the organization. How can we make it safe to challenge people in organizations who are so powerful? I don’t see an easy way to do that. I don’t see many company leaders being OK with the ability of individual employees to challenge their behavior or to turn over assessments of their behavior to an independent third party. It is still very dangerous for employees to challenge leaders in most organizations on anything as consequential as a harassment charge.

What does an employee do if the subject of their accusation is the most powerful (or one of the most powerful) individuals in the organization? Where do they complain – without risking their job? What can organizations do to make sure staff are not put in the untenable position of weighing their continued employment against their complaint (their integrity, their personal well-being)?

First of all, establish a way to report, directly to the top. The very top: the board. Establish a policy requiring appointment of a special board committee to review complaints involving someone on the board.

We all know that part of the problem goes beyond policies. It goes without saying that complaints will only be heard by people who want to hear complaints. So choose your board members wisely. For some organizations, it will take time to build a board that embraces complaints.

Are you using reporter protection policies?

Hotlines and reporting protection policies (anonymity, confidentiality, and non-retaliation) are only effective if they are trusted and visible.

Make these policies known. Are they in your employee handbook? Code of conduct? New hire orientation? Annual compliance training? Posted around the organization? On your website? How else can you get the message across? Because yes, more is needed.

Are the policies followed – and how do you know? There are a few ways to test your policies:

  1. Anonymous surveys. Ask employees if they feel comfortable reporting to various channels. Ask if staff fear retaliation. Some staff might fear retaliation due to an event at a prior job – but your culture will benefit if you treat all survey responses seriously. If possible without sacrificing anonymity, identify departments or supervisors with negative survey responses to identify problematic individuals.
  2. Exit interviews. An employee on the way out the door might not see the point in being honest with you. But then again, someone might – it’s worth a shot.
  3. Include your reporting protection policies in your management and board dashboards. Show your leaders the complaints: how many were anonymous; which leaders or departments have multiple complaints; whether retaliation was alleged (and founded). Make these measures a transparent part of your organization’s discussion and governance process.

What’s the loudest voice in the room?

“That’s just Charlie being Charlie.”

One of TV news personality Charlie Rose’s former assistants described being sexually harassed by Rose. When the assistant complained to the producer, the producer said: “That’s just Charlie being Charlie.”

Most employees get a copy of an employee handbook and code of conduct on their first day on the job. For many employees, the messages in these documents start to fade on day two, and are replaced with the messages spoken by leaders. What message do your employees hear most? Does this message support your code of conduct – or undermine it?

What would you do? What voice would you listen to? And how would this impact your organization’s culture if you stayed and kept quiet – and let that undermining voice continue to be the loudest?

What can you do, as compliance officer, to make your code of conduct the loudest voice in the room?

The tables have turned

As Peter Cappelli aptly pointed out, we live in an era where individuals have unprecedented power over corporations. Organizations have a choice: make your code of conduct and your reporter protection policies the loudest voice in the room – or allow individuals to lead unfettered by ethical standards.

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