Nearly all large companies have well-considered sexual harassment policies and training on the issue, but many still have big problems in the area. Why? Because the culture of some organizations, set by the behavior of senior executives and managers, undermines those policies and training programs.
This fact has important implications for internal auditors. Since board members tend to be driven by news events, they are most certainly asking lots of questions these days about where the company stands on sexual harassment issues. They will want to know if there have been cases of harassment by executives and managers. They will want to look at how those cases were handled, how they are reported and to whom, and what the strategy is to prevent harassment and unwanted advances in the workplace going forward. Many board members will be looking to see that an audit of sexual harassment risk is on the audit plan this year.
Sexual harassment problems or allegations have come to light at several companies, forcing out perpetrators and leaving the board and others wondering what happened and how such problems could have festered for so long. Such companies as Wynn Resorts, News Corp., Comcast, CBS, Uber, Guess, and many others have recently had to confront the issue. Weinstein Co. was forced into bankruptcy after the, by now, well know offenses of its co-founder, Harvey Weinstein.
The problem is thought to be particularly pervasive in such industries as financial services, entertainment, hospitality, restaurants, and technology, but no industry or company is immune to sexual misconduct or gender-based violence and harassment in the workplace.
The #MeToo movement has inspired many women and some men to come forward and make allegations of assault, inappropriate behavior and language, and persistent unwanted advances, often followed by other victims of the same perpetrator, exposing a pattern of sexual harassment. In some instances a toxic environment has gone unaddressed for years, even though many people in the company knew about the problems.
Hiding in Plain Sight
The internal audit department should take a lead role in assessing the potential risks for violations to occur and ensuring that preventative measures are in place and functioning properly. They should assess the likelihood that problems are reported, that those those accusations are taken seriously, that they are investigated and addressed when necessary, and that retaliation or threats of retaliation aren’t launched against those who report sexual misconduct.
Those initiatives will not be easy tasks, since many instances of improper conduct go unreported. According to a survey conducted last year by the American Management Association, more than half the female respondents and 12 percent of male respondents said they had directly experienced sexual harassment in the workplace. Meanwhile, 52 percent of female respondents and 38 percent of male respondents had witnessed sexual harassment in the workplace. Yet only one out of five said they felt comfortable reporting instances of gender-based inappropriate behavior.
Assess the Culture
To get a better handle on whether there are problems at your organization, you can conduct a anti-discrimination, anti-harassment, and anti-retaliation review or audit.
Here’s the rub: if those audits only look at paper policies, black and white historical and reported cases, and compliance with harassment laws and regulations, they will miss the mark. Those audits simply must include an analysis of the cultural aspects of the organization that relate to sexual harassment. According to the AMA study, 90 percent of the organizations they studied had sexual harassment policies in place and yet more than half of the women surveyed said they had experienced harassment.
The website www.Internal-auditing.com offers a sexual harassment self-check and market benchmark that could help in planning such an audit. Some measures that should be part of a thorough review include:
- Consideration of whether a sexual harassment committee or officer has been appointed—or needs to be appointed—in charge of receiving complaints, reviewing complaints, recommending courses of actions following such complaints, conducting training, and providing guidance.
- Following investigation, a formal report is prepared. The report should clarify, as much as possible, (1) What took place? (2) Who was involved? (3) What was the complainer response? (4) Where there any witnesses? Exhibits, evidences, investigation proceedings, findings, and final recommendations.
- All Company employees are aware of their commitment to avoid and to prevent cases of sexual harassment and to report instances on incidents that contribute to an environment that can lead to harassment.
Other things for internal auditors to consider are measures of workplace inequality related to gender. Companies that have an imbalance of pay for female employees, a low proportion of female executives, or complaints of gender discrimination are more likely to be breeding grounds for harassment and gender violence. Higher numbers of resignations by women than men could also indicate that a problem exists.
Good policies are well and good, but there is no substitute for establishing a strong corporate culture defined by a shared set of values. Such core values must be articulated clearly, non-negotiable, demonstrated by senior management, and rewarded. Among these are dignity and mutual respect between all employees, and the commitment of management to ensure a physically and emotionally safe workplace.
Review Standards in a New Light
Other aspects that feed into culture should also be reconsidered light of the current environment. Are gender issues considered as part of the hiring and promotion process? Should executives that have been accused or reprimanded in the past be further investigated? Should companies review and rethink policies and codes of conduct in light of new thinking on the topic?
In light of the current environment, it’s also important that companies expand their thinking on sexual harassment. Behaviors that may have been tolerated or only lightly reprimanded in the past may no longer be acceptable. In so many of the cases that have made headlines recently, there were indications of problems, but no action was taken due to the stature of those accused or they thinking that “boys will be boys.” That no longer flies in today’s environment, nor should it.
Another word of caution: don’t just view gender issues through a risk-management lens. Of course no company wants the reputational damage that comes from a top executive having to step down due to sexual harassment allegations, but that is not the only concern. Healthy work environments lead to happier and more productive employees. Organizations that foster them will see results all the way to the bottom line. 