In the context of seemingly daily, dramatic media headlines on sexual misconduct allegations against C-suite executives, in Equilar C-Suite's "Avoiding a Toxic Culture," Hogan Lovells offers a number of bold but sensible suggestions for companies seeking to avoid a potentially reputation-damaging #MeToo incident, including:
- Conducting robust due diligence on prospective new hires (beyond standard background checks) that can uncover past conduct, which may include retaining an investigator to conduct personal interviews of the candidate's prior colleagues
- Requiring prospective executives to make representations about past conduct in their employment agreements, via annual corporate policy compliance certifications, and in conjunction with enhanced compensation clawback policies
- Eliminating, or adding a carve-out for sexual misconduct in, employment agreement pre-arbitration clauses
- Redefining "cause" (in the context of "for cause" termination triggers) in employment agreements and incentive compensation plans to include sexual misconduct and/or violation of the company's sexual misconduct policies
These more progressive suggestions are accompanied by now-mainstream good governance guidance that includes updating/clarifying corporate conduct policies to include sexual harassment and misconduct, appropriate reporting mechanisms and accountability, and enhanced board oversight.
Access additional information & resources on our Corporate Culture Management/Oversight page. This post first appeared in the weekly Society Alert!