Wachtell Lipton's "Boards, Sexual Harassment, and Gender Diversity" discusses why and in what capacity board involvement in the company's sexual misconduct/harassment posture matters, and suggests these board oversight action steps:
- Review the company's policies and procedures regarding sexual harassment or assault allegations.
- Management should brief the board on the company's employee training and protocols for preventing, reporting, and addressing sexual misconduct.
- Management should brief the board on the factors it uses in determining which claims are reported to the board (or relevant board committee).
- Consider briefings from counsel on litigation risk, disclosure requirements, and the importance of maintaining attorney-client privilege in this context.
- Discuss relevant aspects of risk management, particularly with respect to any situations that involve senior leadership, repeat offenders, or a pattern of complaints.
- Consider developing a crisis response plan that includes participation from HR, PR, and Legal to be better positioned to respond quickly and in a coordinated manner should situations warrant.
The firm notes:
Going forward, each board should regularly consider taking a hard look at its company culture. Directors should consider the actions necessary to become confident that their culture is one in which misconduct will not be tolerated and any sexual harassment allegations will be addressed promptly and fairly. By being proactive, they can better ensure that, should a serious allegation arise, management and the board are ready to act swiftly to protect employees, curtail ongoing misconduct, and minimize harm to the company, its shareholders, and other stakeholders.