Renewing trust amid sexual harassment claims

Renewing trust amid sexual harassment claims | Insurance Business America

Renewing trust amid sexual harassment claims

By Montieth M Illingworth, president, Montieth & Company

Who had ever heard of the Presidents Club two weeks ago?

We all know about it now, and when the names of all 360 male attendees recently surfaced in the news media, multiple corporate communications departments scrambled to manage the inevitable fallout. Some organisations took the right steps in withdrawing their support for the so-called charitable purpose of this annual event. Others didn’t. Probably everyone who attended wishes they hadn’t.

The organisation itself made the major misstep right out of the gate by justifying its event because it helped raise money for good causes. Derided as a “fig leaf” statement to distract people from the entirely sexist nature of the annual dinner, and the conduct of the partygoers towards the female servers, the group then said it would return this year’s donations to the guests.

But then this is all now very familiar. The news media headlines revealing yet another sexual harassment matter come almost with regularity from all sectors of society – from government through to sports teams, schools, entertainment, financial services and beyond. There is no apparent end in sight to these revelations and for a simple reason: they are arising from what have become powerful movements, #MeToo and #TimesUp.

Say what you will about how fair or reasonable the accusations are, they will continue. There is a view that it’s not the severity of the allegation that matters, but that every act of sexual harassment, and even every utterance that creates a sexually hostile work environment, has to be exposed.

How should an organisation and its leadership and management deal with a sexual harassment accusation? What are the best practices for responding, both within the organisation and publicly? What are the biggest mistakes to avoid?

The answers involve a complex intertwining of legal and reputational considerations. A sexual harassment claim in the current environment is a “risk event” for any organisation; even in some cases a business killer. It has to be treated as something that if not handled properly could have significant legal, regulatory, and financial costs, not to mention severe damage to the reputation of the organisation itself in the eyes of its employees, its business partners and the public at large.

At the same time, if handled properly, those potential costs can be significantly offset by reputational gains, all deriving from the renewed sense of trust and confidence that can be instilled among all core stakeholders.

Herein, the best practices for achieving that trust.

Most mistakes happen early

The case study for mishandling a sexual harassment claim remains Rupert Murdoch’s Fox News. Far more energy was put into keeping those many claims, over a long period, and the legal settlements around them out of the news than the energy put into properly preparing for the inevitable public disclosures. As a result, as those disclosures cascaded one after the other into the news headlines, leadership and management appeared to be more interested in obscuring the truth, ostensibly to protect the reputation of the organisation, than in achieving a just and reasonable outcome for the women who brought the allegations.

Of course, when the truth came out the inevitable occurred: far more disruption in a short period of time than would have been in the case if leadership and management had been more transparent about the claims and the legal settlements from the outset.

There was even media speculation that it was partially because of how Fox handled these incidents that a UK regulator blocked the company’s attempt to take full control of Sky. Rupert Murdoch’s comments in the media last year that the allegations of sexual harassment were largely “political” didn’t help in this circumstance or in the repair of its corporation reputation.

Know who you’re addressing

In many of the cases that have been in the news, leadership and management’s public statements have been mostly self-referring and sometimes defensive, which is to say more about its own reactions to the allegations. That’s an understandable situation. For decades that’s been standard corporate communications practice. But what can’t ever be forgotten in all these matters is that we are talking about acts and utterances that produced victims. Management, while obligated to protect the interests of the company, speaks to its core constituents, and serves its shareholders, must consider that it’s also important to acknowledge the victims and their experience - even though at the outset of these disclosures we are only dealing with allegations.

At the same time, it’s vital to state, unequivocally, that the organisation has a zero-tolerance policy towards sexual harassment. In October of 2017, Michael Roth, the Chairman and CEO of the advertising holding company giant, IPG, is believed to be the first major corporate leader to proactively state a zero-tolerance policy, along with stated protections for whistleblowers who report sexual harassment. Even if the implementation of that policy turns out, upon investigation, to have failed in any regard, assertion of it before any allegations surfaced at IPG affirms that the company, from the top down, is committed to putting employee protections in place.

Needless to say, any statement or act that seems to diminish the legitimacy of the victim’s experience is also a mistake. Hence, why a key best practice at the outset is to state that the company is committed to investigating the allegations and doing so in an impartial way, typically using outside legal counsel, professionals, and an independent investigation specialist also knowledgeable about legal and regulatory compliance. Very often law firms turn to such specialists.

The social dimension

Leadership and management are entitled to keep legal settlements confidential. What the #MeToo and #TimesUp movements have shown, however, is that that confidentiality can be seen as putting the company’s interests ahead of not just the victim’s, but also ahead of the emerging public “good” of shedding more light onto these acts of sexual harassment.

What leadership and management therefore must also consider when it addresses these claims are that they have a social obligation to be seen as taking steps not just to do what’s right for the victims; but also, to support and advance a broader social good. Resolution of the matter isn’t just about employees at the company, both those who were victims of the alleged acts and the person or persons who committed them. It’s about sending a message broadly to society that the company is a good corporate citizen.

In that sense, how organisations deal with these claims are now bundled with what’s called “license to operate.” That license no longer relates to the organisation’s conduct regarding whether or not its factories are polluting or limiting its carbon footprint. License to operate now also means how the company conducts itself in resolving sexual harassment matters.

Facts, facts, facts

One of the biggest challenges any organisation faces in these circumstances is obtaining and having a high confidence level about the facts concerning what happened. The allegations at the outset are just that, allegations. Even taken at face value - who said and or did what to whom, where, and when - only the investigation can begin to obtain and verify those facts.

Accordingly, any public statements have to stay within the “four corners” of the known facts and until they’re verified the language must be highly circumspect. Particularly key to avoid in the early period are affirmative statements. For example, “at all times we ensured that our policies against sexual harassment were followed,” amongst many other similar statements. This only creates “exposure” in both reputational and legal terms as it invites people to find exceptions, those times when in this example the policies weren’t followed. And when that happens, leadership and management’s credibility diminishes.

Even a sudden “about face” diminishes the organisation’s credibility. Witness global casino magnate, Steve Wynn, denying the allegations against him this past January, then a few days later resigning as finance chairman of the Republican National Committee.

The other key issue here is being mindful of the facts that aren’t yet known. In many of the cases that have emerged - say, regarding Harvey Weinstein, and the actor Kevin Spacey - there were so many allegations covering such a long period of time into the past, decades in fact, that the facts changed almost every day during the early weeks and months of the disclosures.

In the case of the Weinstein Company, statements were made without knowing that information, in all 80 women would come forward, which in effect completely blindsided management. In the case of Netflix, which streamed Spacey’s hit television series House of Cards, swifter action was taken and to the credit of leadership and management: within a day of one specific allegation Netflix announced that it was suspending the production.

What kind of organisation will we be?

One of the most significant outcomes of the #MeToo and #TimesUp movements is the collapsing of the traditional boundary between what goes on inside an organisation and the rest of the world. These movements have exposed the conduct, and decision making or lack thereof, of dozens of organisations, warts and all, to the outside world. But internally, employees are watching too, very carefully. Many of them are discovering for the first time and proudly so that they’re part of an organisation that seeks to do the right thing in the toughest of circumstances; others are witnessing the failures of their leadership and management.

Both circumstances will have long term effects on employee morale and corporate culture. For the organisations that took the right steps, even on a steep learning curve, their teams will perform with new confidence and the corporate cultures will be strengthened; they will feel that the organisation can conduct itself with total integrity. For those who saw their leadership and management stumble, or worse attempt to squirm away from doing the right thing, the damage is probably irreparable.

Montieth M. Illingworth is president of Montieth & Company, a global specialist communications consultancy with offices in New York, London, and Frankfurt. It advises organisations and individuals on a range of issues and crisis management and litigation matters.