Patricia Farrell of Meyer Unkovic & Scott Patricia Farrell of Meyer Unkovic & Scott

Reports of institutional sexual harassment and abuse have flooded newsstands for the last several months, wreaking havoc on the reputations of Hollywood big wigs and high-powered officials. Bolstered by the #MeToo campaign, a trickle-down effect has now ensued, encouraging thousands of victims to publicly share their stories.

These allegations, regardless of their merit, can cause lasting damage to an organization and its leadership team, and often exposes a host of related issues that may have otherwise gone unnoticed. With public scrutiny now significantly more intense, no member of an organization’s leadership team will be spared in the event of a scandal—especially its board of directors.

Now, more than ever, companies and their boards must revisit and update existing policies to establish a more crisis-based response plan than was historically necessary. The following article provides a guide for how a board of directors should respond to claims of sexual harassment, ensuring all legal responsibilities are upheld.

Organize a Comprehensive Investigative Team

While accusations of sexual misconduct are damaging enough, not responding to such complaints is arguably just as destructive. Lack of action from the board could cause negative publicity or, if the company is public, it may weaken shareholder confidence. Outside parties, including other employees, the general public or potentially a judge, will want to see evidence of a quick and thorough response.

Once a claim is levied, especially if it involves a senior executive, the first step is to form a special committee charged with investigating the allegations. To ensure the board’s duties are upheld, a variety of factors should be considered when selecting representatives to serve on the special committee.

First, the committee should consist of three to five representatives, all of whom should be free of conflicts of interest. Particular care should be taken to investigate potential conflicts in these instances, as employees may have many relationships within the confines of an organization. As a general rule, objectivity should be the number one factor in selecting committee members. Failure to evaluate these potential conflicts could expose the organization to liabilities, and may only perpetuate the already negative perception of the company.

Once the committee is formed, a chair should be selected to monitor the team’s productivity. Finally, the board will need to decide what authority the committee will have to make final decisions related to the complaint. All information should then be documented in the special committee’s written bylaws.

To supplement the internal committee, companies may also consider sourcing support from an outside legal partner to make certain the investigation is thorough and without conflict. Although it is not deemed as a legal duty, most organizations will retain specialized support in these instances, especially when the complaint involves a member of the senior leadership team.

Clearly Outline Steps for Dealing With the Allegations

Regardless of the outcome of the investigation, an appropriate action plan must be outlined by the board in accordance with the findings. For instance, if the claims are found to be true, remedial action must be taken and both the accuser and the accused must be notified of the board’s (or specialty committee’s) decision. Oftentimes, this action plan may be determined before the investigation is complete. This will allow the board to respond quickly in the event the claims are especially damaging.

During this stage, support from legal counsel is often needed to manage any investigations conducted by outside entities, or if the claimant has filed a harassment lawsuit.

Leverage Specialty Team Members to Manage the Message, Internally and Externally 

After the board has established an investigative committee, other internal and specialty teams should be engaged to lead internal and external messaging strategies. This team will likely consist of a company’s human resources director, legal counsel and public relations director. The core function of this team will be to monitor the public and internal backlash related to the claim, such as negative employee emails, news stories or social media posts. Once such reports are identified, the board will need to be alerted as soon as possible to avoid compromising the investigation.

Human resources or internal communications teams should be charged with crafting a communication from the board to internal employees. It’s important to note, however, that internal employees can serve as individual leaks, thus, no information should be shared with the employees until the allegation is considered public knowledge, or, if the board has a legal obligation to do so.

Companies may also consider contracting an outside public relations firm (separate from internal teams) to develop strategic messaging and to serve as the external spokesperson for the organization—especially if the board has not been formally trained to speak with the media. Limiting the board’s exposure to the public, beyond necessity, is the best approach toward ensuring a smooth investigation is conducted.

Mitigate Future Risks With Proactive Actions

Beyond the investigation, proactive measures should be taken to avoid similar situations in the future. At the very least, board members should review current sexual harassment policies to ensure they are up to date. For instance, if a policy does not include mention of harassment over social media platforms, it’s likely outdated and will need to include language relevant to a modern-day work environment.

As counterintuitive as it sounds, these instances can provide an opportunity for the board to show they are committed to maintaining a safe and productive work environment. Once a claim is substantiated, the harasser should be appropriately reprimanded (and most likely terminated depending on the claim) for his or her actions, reminding employees that such behavior will not be tolerated, even at the highest level of management.

Companies and their boards should also reflect on past reports of abuse and discuss how corporate procedures can be updated to fix lingering issues. On occasion, this may include requiring employees to sit through a sexual harassment training session if not already part of an employee on-boarding process.

Above all, it’s prudent for board members to be prepared when news of sexual misconduct is reported. Take time to review company harassment policies, and procedural materials on a regular basis so all resources can be effectively mobilized in the event of a crisis.

Patricia E. Farrell is an attorney at Pittsburgh-based law firm Meyer, Unkovic & Scott. She focuses her practice on corporate and business law services. She can be reached at pef@muslaw.com.