Corporate Governance and Consequences of Bad Behavior: Creating a Culture of Compliance in the #MeToo Era

Description

Corporate boards and owners set the stage for the culture a business possesses. Much of the spotlight on the #MeToo allegations related to the individuals and their violations. However, the damage went beyond individuals to the companies that tolerated, enabled, or empowered bad behavior.

Conscientious businesses must understand the roots of the #MeToo movement to respond effectively to employees' increased demands for more transparency and accountability in investigating sexual harassment claims. The "court of public opinion" inflicts damage on a business' reputation long before the matter goes to court.

The company needs to review its handling of all prior allegations of sexual harassment. Historically, companies have used nondisclosure provisions in employment agreements and settlement agreements to conceal details of alleged sexual harassment. The prevailing sentiment in the wake of #MeToo is that these agreements allow businesses to hide misconduct and avoid addressing it. At least 17 states considered legislation to prohibit nondisclosure agreements in the sexual harassment context. Additionally, the use of arbitration agreements with sexual harassment or abuse claims is subject to restrictions in multiple states, requiring businesses and their counsel to prepare for full-scale litigation in the event of a sexual harassment claim.

Corporate counsel must prepare to advise an organization's leadership on the effect of the changes in both laws and public opinion concerning potential #MeToo claims. The role of the board of directors is to establish oversight for an organization's compliance with applicable law and standards of ethical conduct. The need to develop policies, procedures, and a culture that focuses on preventing and remedying workplace sexual harassment is apparent. In the social media age, a business can suffer severe consequences even without the imminent filing of a lawsuit.

Listen as our authoritative panel provides practical advice and guidance on creating a culture of compliance in the post-#MeToo environment to prevent and remedy instances of workplace sexual harassment and shares tips for educating your board of directors on this important issue.