March 20, 2019
Authored by: Elaine Koch and Vicki Westerhaus
The #MeToo movement continues to make headlines across the globe, toppling more than 200 powerful U.S. company leaders in entertainment, media, sports and a variety of other industries. According to EEOC reports, sexual harassment charges have increased by 14% and EEOC-filed lawsuits asserting harassment have increased by 50%. Larger amounts of cash are being paid to settle harassment suits, and those amounts may be minor compared to the reputational damage of being tried in the court of public opinion.
Directors have long grappled with how to oversee company “culture” and employee behaviors. Now many boards find themselves wedged between a rock and a hard place, as they struggle to balance the need for swift action when a complaint is made versus the need for appropriate due process rights for the accused.
Boards increasingly are expected to investigate stale and non-actionable claims and off-duty conduct. They are also expected to treat wrongdoers swiftly and severely. Employees and stockholders push for transparency in investigations, as boards temper the need for transparency with the risks of defamation, tort or other claims that may be brought by the accused, as well as personal privacy rights when dealing with controversial, off-duty conduct.
The potential unintended