aicd-governance-snapshot-the-boards-role-in-preventing-workplace-sexual-harassment

However, by leading the conversation on how to eliminate sexual harassment in the workplace and establishing a culture that promotes equality, directors can have a significant and lasting impact within their own organisations, as well as society more broadly.

  • Workplace sexual harassment is significant and systemic in Australia
  • The Australian Human Rights Commission’s (AHRC) “Respect@Work” Report (2020) called for boards to consider sexual harassment as a key non-financial risk to their organisations
  • Prevention of sexual harassment and more effective responses to sexual harassment require a leadership focus
  • Preventing workplace sexual harassment is relevant to board oversight of culture, workplace health & safety, risk management, legal compliance and leadership

The AICD will be issuing governance tools to support directors on this issue. Links to further resources will be updated as available.

Sexual harassment is not only an act of individual conduct; it is pervasive in society and has causes and consequences at an organisational level.  While all genders have been victims of sexual harassment, the evidence shows the act is predominantly perpetrated by men upon women.

Sexual harassment is unlawful and can cause deep physical and psychological harm to employees. Sexual harassment poses a significant work, health and safety risk. Organisations have a legal responsibility to identify and manage the risks of such conduct and behaviours occurring in the workplace.

In some instances, sexual harassment may also amount to criminal conduct and will need to be treated as such.  Organisations may also have legal obligations to report allegations to external agencies.  Boards should ensure that management has in place policies that appropriately reflect such obligations. Unless otherwise required by law, organisations should respect the wishes of complainants, especially regarding how and whether a matter is reported internally or externally.

Addressing and preventing workplace sexual harassment is relevant to the spectrum of the board’s work, from oversight of organisational culture and workplace health and safety, risk management and legal compliance, through to recognising it as a leadership issue. 

The AICD welcomed the Australian Human Rights Commission(AHRC) report, Respect@Work, and the Champions of Change Coalition report, Disrupting the System – Preventing and responding to sexual harassment in the workplace, highlighting the importance of elevating the prevention of sexual harassment and early intervention as a leadership priority. We encourage directors to digest these reports and reflect on how their learnings apply to their respective organisations.   

Governance lens

Just as directors have played a positive role in driving better workplace health and safety outcomes, the AICD believes that directors, distinct from the role of management, can be powerful agents of change in addressing workplace sexual harassment, having regard to the following principles:

  • Leadership and culture: directors have a critical role to play modelling desired behaviours and inculcating ethical values from the top. Doing so sends important cultural signals- not only about the values and behaviours that employees are expected to demonstrate but also the board’s commitment to eliminating and addressing sexual harassment.

    There are practical initiatives that directors can implement to achieve these outcomes, such as:

    • approving workplace behaviour policies and practices that make clear that sexual harassment will not be tolerated, and that promote respectful and inclusive workplace cultures;
    • prioritising resources and training to support the overall prevention and response strategy;
    • encouraging employees to report sexual harassment and overseeing frameworks that ensure safe, confidential and clear avenues to do so, including anonymous reporting; and
    • using recruitment and promotion strategies that create a diverse workforce – this should start from the top, including ensuring diversity at the management and board levels;

  • Risk management:directors have due diligence obligations under work, health and safety laws to proactively identify and eliminate the risks of sexual harassment occurring in the workplace. As with mitigating other risks in the workplace, managing the risk of sexual harassment is an ongoing process. Directors should review the risk management systems, processes and policies regularly to ensure they remain effective.

  • Reporting to the board: in line with reporting on other non-financial risks, directors should set clear expectations to ensure management is providing de-identified data on complaints or incidents of sexual harassment in the workplace periodically. While directors must diligently interrogate data and metrics, they should also remain alive to the risk that raw numbers can be misleading; a lack of reporting does not always mean sexual harassment is not occurring – indeed it may be indicative of a culture where employees feel uncomfortable raising complaints.

    Directors should look beyond incident reports and consider other indicators or trends over time, such as employee behaviours and interactions, or high attrition rates in certain pockets of the organisation. Where reporting to the board has not occurred before, boards may wish to see example case-studies which give insights into how matters have been handled by the organisation.

  • Accountability:directors should adopt a zero-tolerance approach to sexual harassment in the workplace. Zero-tolerance does not mean organisations should respond to every incident in the same way. Rather, that sexual harassment is taken seriously by the board and organisation, and that there will be actions and consequences that are appropriate and proportionate to any misconduct and behaviour. Boards should challenge management to ensure these values are being communicated appropriately and understood at all levels of the organisation.

    Critically, the AHRC’s Respect@Work report highlighted that too often employers prioritise corporate reputation, legal and financial liability than looking after employees, and respond to reports of sexual harassment through formal, legalistic investigation procedures. When dealing with incidents or complaints, the AHRC recommends taking a victim-centred approach. This places the wishes, safety and wellbeing of any person allegedly subjected to harassment at the centre of an organisation’s response, is sensitive to any trauma and empowers personal choice for how a complaint or certain information is handled, where reasonably practicable.

  • Transparency:Maintaining privacy, confidentiality and due process is essential in responding to incidents or reports of sexual harassment in the workplace. However, once an outcome has been determined, directors should actively seek ways to encourage respectful transparency around incidents and organisational responses, particularly regarding incidents involving senior leaders. Promoting internal and external transparency around the occurrence of sexual harassment and visible actions taken in the workplace sends strong signals to employees and stakeholders that such misconduct will not be tolerated.

At the same time, the AHRC’s Respect@Work report urges careful consideration be given to requirements for external reporting, noting the risk of creating an incentive for organisations to engage in counterproductive behaviour designed to reduce the number of reports of misconduct – for example deterring employees from making complaints or encouraging settlement of complaints confidentially. Key to any effective response is ensuring the organisation can learn from incidents, continuously improve approaches as well as promote accountability and trust among its employees and broader stakeholders.

Further resources for directors