In light of recent events, private company directors should consider implementing a sexual harassment policy for their company at their next board meeting if such a policy isn’t already in place. Such a policy would be a necessary response to not only their moral obligations but to their legal obligations as well. Addressing the issue of potential sexual harassment within their company relates to key elements of corporate governance: company culture, risk management and crisis management.
It is understandable that directors may believe, in the absence of specific complaints, that their company does not have a problem. But the increasing societal awareness of sexual misconduct, and the severe consequences of misconduct allegations, are creating an environment in which more complaints are made, causing directors to take notice. Advance preparation by directors is now required to ensure an effective response.
A board needs to take seriously the risks of sexual harassment claims relating to its company environment and personnel. The damage can be extensive. While most serious to those employees personally affected, the consequences can include negative publicity, the loss of experienced personnel, reputational damage, the inability to attract top talent, the defection of valuable clients and customers, the possibility of false accusations, and the burden of defending costly and time-consuming lawsuits. Even though sexual misconduct allegations may not be a “risk factor” for a company with no reason to expect that such claims may be made, its board should at least discuss the possibility.
From the board’s oversight perspective, sexual harassment in the workplace is a governance issue. In addition to discussing and implementing a new harassment policy or amending an existing one, the board should be briefed on the company’s employee training and protocols for preventing, reporting and addressing sexual misconduct, and the factors used by management in determining which claims are to be reported to the board or a board committee. The board may want to discuss various aspects of risk management, particularly any situations that involve senior company officers, repeat offenders, or a pattern of complaints.
Ideally, the board and management should develop a crisis response plan that includes input from those performing human resources and public relations functions within the company, as well as from the company’s legal counsel. With a team and plan in place, the company should be better able to respond to a harassment situation diligently and in a coordinated fashion, ready to act quickly to protect employees, curtail ongoing misconduct, and minimize harm to the company and its shareholders.
While there are many reasons for a board to implement a harassment policy that includes a response plan, the law dealing with sexual harassment provides sufficient incentive and cannot be ignored. More than one statute deals with sexual harassment. The Canadian Human Rights Act [s. 14(2)] makes sexual harassment a prohibited ground of discrimination. The Ontario Human Rights Code [s. 7(2)] states every person has a right to freedom from sexual harassment in the workplace.
Yet it is the Ontario Occupational Health and Safety Act [s. 32, 55 and 66] that stipulates how employers should investigate and address incidents of workplace sexual harassment. It requires that both the employee who has experienced the workplace harassment and the perpetrator be given written notice of an investigation. Notice must also be given of any corrective action that the employer has chosen. There is a penalty against employers who are unwilling or fail to conduct investigations if a complaint has been made. The Ministry of Labour may also compel an employer to hire an impartial investigator selected by the Ministry to conduct an investigation in the employer’s workplace and produce a report with respect to the investigation, all at the employer’s expense.
Crafting a sexual harassment policy and response plan for a private company takes time and thought, as it must be the right policy for that company, regardless of what other companies may be doing. There isn’t a “standard form” policy to be used by all private companies, although whatever policy is created has to be understood by all of the company’s employees in order to be effective.
There are, however, a number of general principles that are worth considering at the outset before drafting a specific sexual harassment policy and response plan for the company. Serving as appropriate guidelines for company personnel, they include the following:
First, any whistleblower mechanism available for employees to tell the company of suspected sexual harassment should ensure that those listening are outside the regular chain of command and can listen objectively and make sure the right people within the company are notified promptly.
Second, care must be taken to avoid punishing those who come forward, paying particular attention to employees whom their managers say are under-performing. While those employees may be seeking to avoid disciplinary action with a false report, the performance assessment may be an attempt by their managers either to escape punishment themselves or to punish the employee for coming forward.
Third, the right people who receive the results of any investigations into alleged sexual misconduct must follow through objectively, without bias, and without regard for position or title, and ensure appropriate action is taken consistently.
Fourth, the same protections must apply to everybody who works at the company or is subject to the actions of its employees, such as temporary personnel, contractors, consultants, suppliers, customers, and partners.
Fifth, appropriate training must be in place for everybody. That training should go beyond simply reading the policy but involve various scenarios and case studies, and not only be based on what not to do but also guide people on what to do if they see or hear of sexual harassment. Such “bystander training” allows employees to act as agents of surveillance and intervene to hold their offending peers accountable for misconduct instead of being complicit in it.
Sixth, when a credible accusation is made and received, the accused should be put on a paid leave of absence while an investigation takes place. The investigation should promptly be conducted by external investigators already vetted and designated by management and the board. If the claim is substantiated, the accused must be immediately terminated, but if not, then immediately reinstated.
And seventh, due process must be maintained throughout, with trustworthy impartiality, wisdom, and dedication to do the right thing in every instance.
If the foregoing guidelines are reflected in a sexual harassment policy and response plan for the company, and the policy is implemented by the board and enforced throughout the company in a fair and diligent manner, the directors will have taken a significant step towards meeting their obligations to address the issue of potential sexual harassment within their company.