A recent, highly-publicized controversy provides a near-worst case scenario of how workforce culture issues can damage corporate reputations and raise questions about board oversight.
The controversy involves widespread allegations of inappropriate workforce behavior by management-level employees of a major US-based international sports apparel company. The focus of the controversy was a series of female employee complaints of harassment and discrimination against women. It was ignited in large part by an internal survey, prepared and led by several female executives and distributed among the company’s female employees. The focus of the survey was on whether the respondents experienced sexual harassment or bias at the company.
Three factors make this controversy particularly unusual and noteworthy: First, it has been the subject of intensive national media scrutiny, with attendant reputational harm to the company. Second, the delivery of the survey prompted an internal investigation which, in turn, has led to the departure of more than 10 senior managers. Third, the company’s CEO has made a public apology to employees for allowing a corporate culture that tolerated inappropriate behavior, and for failing to take seriously complaints regarding workforce misconduct.
These and other related factors should serve as a prompt to corporate boards to seriously consider their workforce culture oversight obligations.