January 24, 2019 Articles

A Corporate Compliance Framework for Sexual Misconduct Prevention

Making prevention of sexual misconduct a top priority will mitigate organizational risk.

By Nicole Y. Lamb-Hale

Sexual misconduct is a significant enterprise risk. Reports of the downfall of corporate leaders who have been accused of, or admitted to, sexual misconduct are all too prevalent. Such misconduct leaves in its wake not only damage to the reputations of the accused but also corresponding harm to the company’s share price and reputation.

Due to the reputational and economic damage to organizations wrought by sexual misconduct, prevention should be central to an effective corporate compliance program. Chapter 8 of the Guidelines Manual 2018, the U.S. sentencing guidelines (USSG), is instructive in the development of a sexual misconduct–prevention program. Indeed, the seven elements of an effective compliance program delineated therein provide a useful framework for the prevention of sexual misconduct. Set forth below are practical applications of such guidelines, which will mitigate the risk of sexual misconduct in your organization.

Establishing Standards and Procedures
To ensure that employees understand that sexual misconduct will not be tolerated, establish written policies, standards, and procedures that are unequivocal in their message that such behavior is improper. Such documents should clearly define sexual misconduct and provide examples of prohibited behavior. As is the case with other corporate compliance programs, during established intervals, employees should be asked to affirm that they have read and understand the policies, standards, and procedures prohibiting sexual misconduct.

Charging Chief Compliance Officer with Implementation
Prevention of sexual misconduct should be a charge of your organization’s chief compliance officer (CCO) and should be an element of her performance. The CCO should identify a compliance champion in each business unit who directly reports to the CCO during established intervals on the progress and effectiveness of the program. The board of directors should provide oversight of the compliance program and receive reports during established intervals on the progress and effectiveness of the program.

Ensuring That CCO and Compliance Champions Are above Reproach
Use reasonable efforts to ensure that the CCO and the compliance champions have not themselves engaged in sexual misconduct. Reasonable efforts include due diligence on their adherence to the written standards, policies, and procedures of the company as well as their history of compliance in prior workplaces. Such individuals are stewards of the sexual misconduct–prevention program and should have the credibility to effectively fulfill such a role.

Implementing Through Effective Communication and Training
Communicate the elements of the sexual misconduct–prevention program to all employees, including those at the highest levels in the organization, to ensure that the standards, policies, and procedures are understood and permeate the culture of the organization. Conduct training programs at regular intervals and disseminate information underscoring the organization’s commitment to the prevention of sexual misconduct. Retain outside facilitators to lead training programs and incorporate sexual misconduct modules in online training programs.

Auditing, Evaluating, and Facilitating Reporting
Develop mechanisms to determine whether your sexual misconduct–prevention program is being implemented across the organization. Charge compliance champions in each business unit with identifying patterns of behavior that may signal the presence of sexual misconduct. Make course corrections to the program as necessary. Facilitate mechanisms for employees to confidentially report sexual misconduct and to protect them from retaliation. Promptly investigate allegations of sexual misconduct, ideally with the support of third-party investigators to both ensure neutrality and reduce allegations of bias.

Enforcing and Incentivizing Compliance
Promote and enforce consistently throughout the organization incentives to comply with the sexual misconduct–prevention program. Establish efforts to prevent sexual misconduct as a performance measure in the organization’s compensation program. Ensure that appropriate disciplinary measures are imposed consistently at all levels of the organization when sexual misconduct is detected or when employees fail to report its occurrence.

Responding Appropriately to Violations
Upon discovery of a violation of the sexual misconduct–prevention program, take reasonable steps to respond to and prevent such conduct in the future. Make any necessary modifications to the program. Seek input from employees on strategies to improve the program. Communicate across the organization the corrective action taken. Monitor at the executive leadership and board levels the effectiveness of such corrective action and communicate the findings across the organization.

Elevating the prevention of sexual misconduct to the level of other bet-the-company corporate compliance issues and communicating its importance both by words and actions will promote a culture of intolerance for sexual misconduct and thereby mitigate reputational and economic risk to your organization.

Nicole Y. Lamb-Hale is a managing director at Kroll in Washington, D.C.

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