On 17 June 2021, the Australian Human Rights Commission (AHRC) released the “Equality across the board: Investing in workplaces that work for everyone (2021)” report (AHRC Report).  The report collates survey and interview data from 118 ASX200 listed companies to portray how these companies are currently combatting the issue of sexual harassment and makes recommendations based on these findings.  The AHRC Report builds on the findings and recommendations set out in the Respect@Work report, which discusses the benefits of data collection and transparency around workplace sexual harassment.

The AHRC Report focusses on eight key areas and makes a number of useful recommendations in respect of these areas.

Leadership and governance

The AHRC Report found there was a lack of clarity as to who holds ultimate responsibility for preventing and responding to sexual harassment.  The results showed that only 19% of respondents recognised the board as attracting this primary responsibility, with most saying the responsibility was with the CEO or Head of Human Resources.

Further, even if the board was found to have ultimate responsibility, sexual harassment is not often a board agenda item with less than half of the respondents (43%) indicating that the company had sexual harassment as an agenda item regularly.  Often, it was external events that were prompting respondent companies to discuss sexual harassment in the workplace, which the AHRC Report suggests displays a reactive rather than proactive approach to the issue.

Incidents of sexual harassment also tended to be reported more often to the executive management team (63% of respondents) rather than the board (49%).  What is not clear is the communication between executive management and boards in respect of these issues.

Risk assessment and industry action

Almost two-thirds (64%) of the companies surveyed had in place mechanisms that identified and mitigated risk-factors for sexual harassment.  The risk factors included male-dominated workplaces and workplaces with overnight shift work.

Of the companies who did not have a mechanism in place, 5% indicated they were unwilling to develop such a mechanism at all, and 18% would do so only if circumstances required.

Culture

There is no doubt that culture is a driving and complex issue in respect of sexual harassment in workplaces.  The Respect@Work report found grave misgivings in respect of workplace cultures.

The AHRC Report has found that 79% of respondents who indicated that culture and conduct standards generally were tied with the executive management teams’ remuneration and performance incentives, and 27% tied incentive payments to preventing sexual harassment specifically at least partially.

Knowledge

The AHRC Report observes it may benefit directors and executive management teams to establish further skills and expertise on good governance and sexual harassment.  Currently, 19% of companies surveyed required directors to undergo education on good governance and sexual harassment, and this increased to 60% for executive management teams.  11% of companies described the training as “trauma-informed” and as including “victim-centric approaches” to worker welfare.

Reporting and supports

The AHRC Report demonstrated that a majority of companies had reporting structures in place for complaints of sexual harassment, including 85% with whistleblowing options, 81% with internal investigation options, 79% with manager interventions, and 78% with anonymous reporting.

However, the AHRC Report found that follow-up and support practices needed improvement.  Within six months of a complaint, only 31% of respondents followed up with the complainant and this dropped to 16% when following up with the alleged perpetrator.  These statistics certainly do not assist in creating a culture that does not enable or allow sexual harassment or one where complainants can speak out comfortably against it.

For employees involved in a workplace sexual harassment complaint, many companies have employee assistance programs (85%), but less than half of the companies referred employees for psycho-social support (43%) or had online support information or programs available (32%).  These numbers dropped slightly for bystanders and alleged perpetrators to 81%, 36% and 28% respectively.  Almost one-eighth of companies made legal advice available (12%).

Measurement and accountability

The AHRC Report found that most companies collected information relating to complaints of workplace sexual harassment (78%), with 70% collecting anonymous, de-identified complaints.  Other information gathered includes information on legal cases (64%), settlements with current and former staff (51%) and the satisfaction of parties (19%), among other things.

Survey results also demonstrated that companies gathered a wide variety of information on potential cultural issues and prevalence of sexual harassment.

Transparency

The AHRC Report commented there was a lack of consistency in how information was shared internally.  Inconsistent information invariably creates miscommunication in organisations and a lack of transparency.  Less than one-third (31%) followed the recommendation of the ASX Corporate Governance Principles and publicly reported information relevant to sexual harassment and 14% did not respond externally at all.  Most companies consulted with staff on sexual harassment related issues (67%) and provided information generally (68%) or through updated policies (64%).

The AHRC Report argues that voluntary external reporting allows companies to show their commitment to better practice, particularly where the company has suffered reputational damage due to sexual harassment issues.

Gender diversity

Almost two-thirds (62%) of respondents have a target to increase female representation on their board and gender equality was a priority for almost every company surveyed during recruitment (94%) and overall (89%).

The AHRC Report notes that gender diversity on boards is linked to stronger governance and oversight of matters regarding sexual harassment.

Recommendations

The AHRC Report makes eight recommendations, six of which are targeted towards the ASX200 companies and two of which are targeted towards investors.

  • Boards
  1. Boards should demonstrate “visible leadership and appropriate oversight and governance over culture, sexual harassment and gender equality.”
    1. The AHRC Report adopts an approach where ultimate responsibility and accountability to prevent and respond to sexual harassment rests with the board.
    2. Boards should ensure to the appropriate expertise at the board level and foster a culture where speaking up is encouraged.
    3. Policies, systems and frameworks should be implemented as part of a proactive, risk-based approach to managing sexual harassment.
  2. Ensure there are sufficient skills and experience to “effectively prevent and respond to sexual harassment
    1. All directors should undergo what the AHRC Report refers to as “trauma-informed” and “victim-centric” education to build skills on best practice governance.
    2. Executive management team members should have a baseline understanding of good governance and sexual harassment, and specific roles (eg Human Resource executives) should undergo further training on the natures, drivers and impacts of sexual harassment.
  3. Prioritise gender equality and establish gender diversity targets
    1. The AHRC Report recommends a 40:40:20 approach to gender diversity targets and put timeframes in place.
    2. Consider of gender diversity at each level of the company as a strategic goal.
    3. Implement policies relating to gender diversity with the CEO demonstrating leadership in this regard.
  4. Ensure systems and frameworks are in place to collect, analyse and use data to effectively manage the risks related to sexual harassment
    1. Implement policies, systems and frameworks that both assist in preventing sexual harassment and respond to incidents of sexual harassment.
    2. Allocate responsibility for collection of data clearly.
    3. Use data to elucidate systemic trends in corporate culture, including sexual harassment.
  5. Align appointment, expertise and performance management of the CEO and [executive management team] with the entity’s values to ensure that [the executive management team] demonstrates and displays visible leadership on culture, sexual harassment and gender equality
    1. Gender equality, positive corporate culture and approaches to addressing sexual harassment are areas that the AHRC Report suggests should be a strategic priority through appointment and performance oversight of the CEO and executive management team.
    2. Conduct remuneration and performance reviews with a link to culture, conduct and ability to prevent sexual harassment.
  6. Boards should both internally and externally report sexual harassment information to monitor the effectiveness of policies and procedures
    1. Consider the indicators for public disclosure as contained in the AHRC Report.
    2. Continue to utilise existing reporting mechanisms such as the ASX Corporate Governance Principles.
  • Investors
  1. Seek information on investee entities systems and processes to prevent and address sexual harassment
    1. Actively pursue information about the entity’s approach to workplace sexual harassment and this should form part of key disclosure matters and general due diligence.
    2. Consider the indicators for public disclosure as contained in the AHRC Report
  2. Advocate for improved transparency and public disclosure on sexual harassment
    1. Encourage entities to publicly disclose their approach to tackling sexual harassment.
    2. Advocate for more robust and targeted metrics on sexual harassment in existing reporting mechanisms.

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