However, such maleficence isn’t confined to Hollywood. Midway through this year, a Commons select committee said that the public and private sectors needed to intensify efforts to stamp out sexual harassment in the workplace. It’s hard to imagine that any organisation would openly tolerate this form of abuse, but the committee said that a culture exists which effectively discourages some victims from speaking out, citing the widespread use of non-disclosure clauses in employment contracts and termination settlements.
Shortly before the Weinstein scandal broke, the Women and Equalities committee published a report – Sexual Harassment in the Workplace – which posited that “employers have failed to tackle…a long-standing and endemic problem”. The issue has attracted huge publicity since the advent of the #MeToo movement, but beyond the reputational damage that allegations of this stripe can inflict, there is a chance that corporations could be subject to beefed-up legislative strictures. The committee set out its support for a previous recommendation of the Equality and Human Rights Commission “that the government should place a mandatory duty on employers to protect workers from harassment and victimisation in the workplace”. This would also encompass the introduction of punitive damages for employers and the minimisation of potential cost risks for employees.
Recent experience shows that reputational damage can have a direct bearing on a company’s trading performance. Nobody wants to be damned by association, so the support of customers, suppliers, institutional investors and other stakeholders cannot be guaranteed if it’s felt that a given company hasn’t taken the necessary actions to address allegations.
It was recently revealed that Ted Baker (TED) founder and chief executive Ray Kelvin had agreed to take a temporary leave of absence after “further serious allegations” of harassment were made against him. Claims that Mr Kelvin enforced a “hugging” culture at the fashion retailer emerged after a petition was launched calling for an end to “harassment”. A ‘hands on’ management style is one thing, but the revelations exacerbated existing negative sentiment towards the stock, which may have seemed impervious to problems in the retail market at one point, but it has now shed around 40 per cent of its market value over the past 12 months, including 20 per cent after the revelations.
Shareholders in WPP (WPP) got a rude shock earlier this year, when its founder Martin Sorrell was forced to relinquish the reins at the advertising giant after an investigation was launched over allegations of personal misconduct, although neither Mr Sorrell nor the company have come forward about the nature of the complaint.
And if we needed further evidence of how this issue is concentrating minds in the corporate sphere, accountancy heavyweight KPMG has disclosed that seven of its UK partners left the firm because of inappropriate behaviour, including sexual harassment, over the past four years. The revelation came shortly after industry rival Deloitte said it had shown the door to 20 partners over the same period for similar transgressions. PwC and EY quickly followed suit, revealing that they both fired five partners for inappropriate behaviour including harassment or bullying. Corporations do not want to be seen to be dragging their feet in this area.
We got another perspective on the issue with the maiden set of statutory figures for Mind Gym (MIND) since its admission to Aim at the end of June. The learning and development specialist, which offers “psychology based organisational transformation”, provides consultancy and training services under its ‘Respect’ business arm, designed to help business leaders “keep their workplaces safe from predatory behaviour”. Given the prevailing mood, it could prove a lucrative niche.
