The board’s role in preventing workplace sexual harassment

Sexual harassment is now recognised as an important governance issue. Organisations are considering the steps they must take to manage the risk and are shifting their focus from response to prevention. To explore the board’s role in preventing workplace sexual harassment, the AICD spoke to senior directors and the Minerals Council of Australia about the measures that are proving to be effective.

It’s an issue that has played out in organisations all over the world. Domestically, reported cases of sexual harassment and assault – such as those at AMP, the High Court of Australia and Parliament House in Canberra – have come into the public spotlight, exposing the poor governance and prevention controls in place to prevent and manage this critical area of workplace risk.

These cases highlight the need to improve not only workplace policies, but also the measurement and reporting of incidents, and consequence management. Leading organisations including ANZ, the Law Council of Australia, BHP and the Minerals Council of Australia are taking steps to educate staff and offer guidance on acceptable workplace behaviour.

Graeme Liebelt FAICD, who is chair of Amcor and sits on the boards of ANZ and the Australian Foundation Investment Company, says his boards have strengthened their monitoring and preventative action in the past few years. Actions have included developing codes of conduct and other relevant policies, staff training, putting in place measurement systems for reporting, mechanisms for staff to raise issues, and improvement plans. Importantly, he says, there has been considerable work on ensuring respect and improving the experience of those who have been subjected to poor behaviour.

“The consequence management of this issue is very important,” he says. “If you walk past behaviours and implicitly sanction them, then eventually they will be reflected in your culture… It can then become a reputational issue.”

In recent times, sexual harassment has become much more closely tied to workplace culture. “There has been a great deal more discussion recently around culture, generally. I think it's fair to say that most boards are now paying a lot of attention to supporting the desired culture, and that includes respect for other workers. Building the right overall culture is a very important part of having a respectful workplace and helping to stamp out sexual harassment.”

As with other workplace issues, leaders at management and board level have a responsibility to model the right behavior and set the right tone. Liebelt says that while his boards have not directly tied the issue to remuneration outcomes for executives, “in the assessment of the performance of our management team, if an issue arose, either a specific or general issue, it would be taken into account in performance assessment.”

All reported cases of sexual harassment must be elevated as a work health and safety matter, he says. As former CEO of Orica, he saw the importance of workplace safety come to the fore. “I've been in the mining and explosives industry, so safety is very much top of mind, but that's physical safety. Boards are [now] increasingly aware that the psychological safety of the workforce is equally important, so people feel safe from the threat of harassment and bullying. Employees should feel able to raise issues where they see them in the workplace.

“We need to make our workplaces as productive as possible. You need that psychological safety to be able to talk about things that you see going wrong, not just about sexual harassment, but [also] with respect to other poor behaviours and opportunities for improvement.”

All 260 members of the Male Champions of Change Coalition supported the guidance calling for sexual harassment to be treated as a workplace health and safety issue. They recommended sexual harassment incidents be listed in annual reports and that there is a significant reduction in the use of non-disclosure agreements (ie. only at the request of the victim). They also called for organisations to implement strategies that encourage staff to speak up, to listen to and respect employees who have experienced harassment, and to promote increased gender equality.

James Fazzino, a convenor of the coalition who was involved in drafting the report, says the issue has elevated in importance in recent years and board members are starting to ask a lot more questions about how to prevent the problem occurring. Once it has occurred, action needs to be taken in a visible and public way, he says, preferably without the use of non-disclosure agreements. “If the breach relates to a CEO, or a member of the management teams, frankly, they need to leave the organisation,” Fazzino says. 

Fazzino, who is also the chair of Manufacturing Australia and Osteon Medical and a director of Rabobank, Tassal and APA Group, says, “The consequences for leadership are higher because the expectation of leadership is higher and those consequences could include not only leaving the organisation, but the company [publicly stating] why, in order to lift the organisation’s transparency. For others in the firm, action could mean loss of incentives or demotion or retraining.” It should also be part of the recruitment process to check an applicant’s history for any sexual harassment breaches, he adds. 

“There's no place for non-disclosure agreements to shut down an issue, because when you see that individual has left the firm because of harassment, everyone in the company knows why they left… Secondly, non-disclosure agreements stop people who are being harassed speaking up and telling their story, if they choose to.”

The #MeToo movement has highlighted the issue publicly and helped show that sexual harassment poses a risk on many fronts, including reputationally to the company, board and individual board members. “And of course, it goes to culture, which means it's part of your strategic risk as a board.”

Fazzino recommends businesses use their existing safety tools to prevent and address the issue. He says there should be a focus on prevention and early intervention and sexual harassment should be included on risk registers. And every single occurrence of sexual harassment should be followed up and dealt with.

“It wasn't that long ago, where in our health and safety approach, we actually had the mindset that people would get injured at workplaces. And of course, around 10 years ago we said, ‘No, that doesn't need to occur’. And if you look at what's happened since using those safety tools, the reduction in the incidence has been extraordinary in Australian workplaces. That’s why we use our safety tools, because we know they work. And that will mean we can quickly deal with harassment.”

Business should heed the lessons from safety which are applicable to harassment, he says. “If you deal with everyday sexism, then by definition, you'll change the culture and prevent harassment.”

Miners set up taskforce and launch campaign

Meanwhile, in a statement endorsed by its board of directors and supported by all member companies, the Minerals Council of Australia has committed to a zero-tolerance approach to sexual harassment. The move came in response to the Australian Human Rights Commission report published last year, Respect@Work: Sexual Harassment National Inquiry Report 2020.

This landmark report includes recommendations for industry and professional groups to collaborate to create initiatives that address sexual harassment. Last October's Federal Budget also included funding to set up a national workplace sexual harassment council and other initiatives recommended by the Respect@Work report.

The Minerals Council, whose members include BHP, Glencore Australia Holdings, Rio Tinto and Whitehaven Coal, is developing an industry code and toolkit to establish clear expectations and protocols on preventing and responding to sexual harassment in the workplace. It also expanded its safety policy, introduced a focus on respectful workplaces, added language around health and psychological wellbeing, and called workplace harassment and disrespectful behaviours preventable.

The council has pledged to create an industry culture that respects all people, eliminates sexual harassment and stands up, supports and cares for those affected by unacceptable behaviour. "Through committed leadership, we will develop an industry response that recognises and prevents sexual harassment and empowers people to speak up and take action where behaviours do not meet expected standards."

The board of the Minerals Council also established a Respect@Work Taskforce to broaden its safety and health policy and develop a commitment to eliminating sexual harassment.

Mining has historically been one of the country’s worst industries for sexual harassment, with a 2018 Human Rights Commission survey finding 74 per cent of female mine workers had experienced harassment in the previous five years. In total, 40 per cent of mining workers reported being subjected to harassment in the previous half decade. The Council's statement describes this conduct as "unacceptable and illegal" and acknowledged that sexual harassment causes "profound physical, emotional and psychological harm".

Minerals Council CEO on the work ahead

In an interview with the AICD, Minerals Council of Australia Chief Executive Office Tania Constable outlined the work the council has planned.

Is your industry response on sexual harassment finalised?

We know that a statement by itself is not enough. That’s why the MCA is developing specific guidance through an industry code that identifies both the preventative and response measures the sector will need to take. 

Companies are at different stages on their journey to eliminate sexual harassment and we will be developing fact sheets, templates and training materials over coming months to support members.

This response is only the start of a long and challenging journey for the industry. The MCA’s expanded safety and health policy is the springboard for a range of initiatives with a comprehensive and detailed approach to physical health and safety as well as psychological wellbeing. 

Will adoption of the code be voluntary?

The final form and status of the code will be determined by the MCA board. It will be similar to other initiatives that MCA members commit to as part of their membership, such as sustainability measures.

What has been the reaction from your members to this campaign?

Our members have been strongly supportive from the start. The board was and remains extremely concerned about the unacceptable prevalence of sexual harassment in the industry and the profound physical, emotional and psychological harm it causes.

Are you developing specific guidance to boards and directors?

Yes. Leadership, organisational values and culture are key preventative tools in dealing with safety and health risks. As a society, we often ask our leaders to enact change, but we don’t always give them the tools to do so. Specific guidance and training will be included in the toolkit.

Will you be working with the National Workplace Sexual Harassment Council?

Yes. We have been and will [continue to] be actively engaged with Sex Discrimination Commissioner Kate Jenkins and her team, as well as closely observing the work of the council. We will continue providing input and assistance.

Do you see sexual harassment as a risk issue for boards?

Sexual harassment is a significant risk to businesses across Australia. Under safety and health laws, boards and the entire workforce have a duty of care to others and themselves.

MCA member companies who are eligible businesses under the Workplace Gender Equality Act 2012 already provide annual compliance reports to the Workplace Gender Equality Agency and information on managing sexual harassment forms part of their reports.

What should boards and managers do to prevent sexual harassment?

It is important that boards, CEO’s and managers transparently report on sexual harassment prevention strategies and their effectiveness, both internally across the business and externally where appropriate.

Leadership, cultural and governance frameworks, awareness and education, and ensuring the working environment is safe, healthy and respectful are also critical. 

Are any measures likely to be more effective than others?

There is no single solution. Each business should undertake a risk assessment to determine the risks of sexual harassment in their workplace, with targeted actions mapped out in response to such assessments. It is critically important that incidents are treated seriously, confidentially and sensitively, with a focus on supporting affected individuals and eliminating sexual harassment.

BHP takes action

Multinational mining company BHP is one organisation that has taken concrete steps towards prevention and education, both here and overseas. In Australia and the Americas, the company conducts sexual harassment training as part of its code of conduct training. It also established an internal working group in 2020 to develop a holistic plan to address controls and cultural enablers of workplace sexual harassment and assault.

In their 2020 Annual Report, the company stated “Respect is one of Our Charter values and we believe it is fundamental to building stronger teams and being an inclusive and diverse workplace. For some people, this has not been their experience of working at BHP. We are determined to address this.”

BHP also continued its internal Respectful Behaviour campaign in 2020 to build awareness of what constitutes disrespectful behaviour in the workplace. They equipped leaders and employees with materials to help them have conversations about disrespectful behaviours and are integrating these concepts into their cultural tools and internal training programs.

The company has also conducted widespread training and education programs in the Americas and held employee conversations as part of a sexual harassment and sexual assault awareness training program, to better understand what they can do to prevent and respond to sexual harassment.

Law Council releases action plan

The Law Council of Australia is calling for the creation of an independent body to hear complaints against judges as part of its push to reduce sexual harassment in the legal profession. The peak body outlines recommendations in its new National Action Plan to Reduce Sexual Harassment in the Australian Legal Profession, published in December last year.

The report recommends driving cultural change in the legal profession through professional regulation, the development of national sexual harassment policies and guidelines, a centralised source of information and educational tools, facilitating a consistent complaints process, and supporting people who have experienced sexual harassment.

It also advocates setting up a national Workplace Sexual Harassment Council, harmonising federal and state and territory discrimination laws, providing education and training programs for judicial officers and tribunal members, and making federal law reform amendments to the Sex Discrimination Act 1984 (Cth) (SDA). The Council will also advocate to establish a Federal Judicial Commission.

The Law Council will review and report to the board annually on its action plan addressing the implementation and progress on endorsed measures as they are further canvassed and developed in consultation with the Law Council’s members.

New report from Safe Work Australia

A new report by Safe Work Australia Preventing workplace sexual harassment also offers guidance on prevention and responding to sexual harassment in the workplace.

The report provides valuable guidance to directors and officers on discharging their duties, and says officers must, under WHS laws, do whatever they can to eliminate or minimise so far as is reasonably practicable, the health and safety risks of workplace sexual harassment. 

Boards are urged to consider whether control measures could be improved by implementing new measures or making changes to the physical work environment, work procedures, workplace policies or additional training.

It recommends keeping records on reported incidences of sexual harassment and the actions taken to assist in analysing trends and identifying systemic risk factors, and notes that any records with identifying information must be kept confidential.

Read our recent summary from the AICD Policy Team on the Safe Work Australia report.

Australian Human Rights Commission report: Respect@Work

The Australian Human Rights Commission’s (AHRC) released its Respect@Work: Sexual Harassment National Inquiry Report (Report) in March 2020 following extensive consultation with key stakeholders across Australia, including victims, government agencies, business groups and community bodies.

The inquiry examined the nature and prevalence of sexual harassment in Australian workplaces, the drivers of this harassment and measures to address and prevent sexual harassment. The AHRC heard that the current system for addressing workplace sexual harassment in Australia is complex and confusing for victims and employers to understand and navigate. It also places a heavy burden on individuals to make a complaint when, in fact, most people who experience sexual harassment never report it.

Ultimately, the final Report made 55 recommendations, which are intended to help government, employers and the community to better prevent and respond to sexual harassment in the workplace.

Critically for directors, the AHRC encourages boards to consider sexual harassment as a non-financial risk to the organisation, and notes that to do so, they need to be properly informed regarding any policies and programs in place to prevent sexual harassment, any incidents that occur and the response to those incidents.

Further resources for directors

• AICD Director Tool: A director's guide to preventing and responding to sexual harassment at work
• AICD: Preventing workplace sexual harassment – obligations for directors
• AHRC: Respect@Work -Sexual Harassment National Inquiry Report (2020)
• Champions of Change Coalition: Disrupting the system - Preventing and responding to sexual harassment in the workplace