By: Sandi Verrecchia @satoriinsight

Leadership, Governance and Risk in Changing Times

 

I find the #MeToo movement fascinating to observe. To hear the water cooler conversations going on, and the opinions flying regarding right and wrong, men and women, and what people should and should not do. When it comes to #MeToo, everyone has an opinion.

A few weeks ago, I was at my monthly book club.  Typically, US political discussion starts up once the book has been scrutinized, celebrated or panned. This time, it was replaced by the next hot topic – the #MeToo Movement. What fascinated me about this discussion was that the group of women spanned in age from mid-twenties to early 60’s. Each woman was highly educated, accomplished and well-read, and each had their own story to tell. 

The point of this blog is not to dump all over men or to create a pity party for the women or to sling blame. Rather, the point of this blog is that action and ethics are intrinsic to good leadership. All but one of the book club women went to their boss or their HR department to report a problem, and not once did someone in a position of authority do something to right the wrong or, even at a bare minimum, address the situation.  Notably, all of the women worked for large organizations that one would expect to have well-developed ethics policies, HR policies and values in place.   Moreover, one would expect that they would not tolerate inappropriate behaviour in the workplace. But they did nothing. 

I have been thinking about the discussion that evening in the context of leadership, governance, and risk. Here are several women who were not heard, or even worse, were made to believe that their voice would seal their fate should they choose to ‘rock the proverbial boat’. That, I believe, is unjust, but I am fearful that it may be more the norm than the exception. If I am right, it is just a matter of time that the #MeToo movement moves from the far away glitz and glamour of Hollywood and politics and moves next door into ordinary organizations. 

What would happen if it occurred at your organization? Here are a few questions to consider:

1. Does your leadership walk the talk when it comes to dealing with issues that are sensitive and messy?

2. Are you having the right conversations?

3. Do you have the right level of governance when it comes to staff related items that fall outside of norms of succession and engagement?

4. As an organization are you considering risks such as reputational risk with the same weighting as financial risks? Or to put in another way, are you considering the financial risk of reputational risk? 

Good conduct is not outlined in a policy manual; it is established by an ethical culture. Corporate leaders must create, and work tirelessly to maintain, a culture rooted in integrity, transparency, and accountability. For this to happen, leaders must walk the talk and engage in conversations that spell out what an ethical culture means. If actions speak louder than words, then inaction yodels from the mountain tops. If someone comes forward, or the rumour mill begins to churn, then action must be taken. Leaders need to lead with integrity, create a safe place for their people to be heard, and set the tone for the appropriate culture that will run through the veins of the organization. In many of the #MeToo cases, it appears that people in leadership or authoritative positions knew about the allegations and chose to do nothing. Strong leaders do what is right…always. 

What is the role in the Board when it comes to issues like this? A Board’s role is to manage, or supervise the management of, the business and affairs of a corporation. As this suggests, the managerial responsibilities of a board of directors are both direct and indirect. While Boards will typically delegate the day-to-day management of the business, they are expected to perform a supervisory or oversight role with respect to decisions and actions of management. When it comes to #MeToo, the Board needs to ask questions to ensure that they are confident that the right measures are in place and that there is a mechanism whereby staff can reach out without fear. In the case of the Weinstein Board, it is alleged that the Board members knew what was going on and even approved pay-offs. The role of the Board in good governance failed miserably.

The role of the Board brings me to my last point which is risk, namely reputational risk. Many organizations are doing a deep dive into the area of risk. However, in my experience, reputational risk is downplayed or missed. Reputational risk is very important to consider as it can be directly linked to financial risk (just ask the band Hedley).  #MeToo allegations could be an overnight game changer for an organization. Therefore, similar to leadership and governance, conversations should be undertaken to ensure that reputational risk is low, and that your Board and Management are not left scrambling to make things right should negative allegations impact your organization. An excellent example of this is Mountain Equipment Co-op (MEC) and their tangential relationship with the NRA. We have yet to see how MEC reacts, but it is probably safe to say that they did not see that reputation risk coming before it hit. 

The #MeToo movement may seem far away from your desk, your office or even your city.  With social media so prevalent and the 24/7 news cycle fishing for big stories – are you confident that your leadership, governance framework, and risk assessments are where they need to be? Are you having the right conversations so that your organization doesn’t become the conversation?

 

 

  

Sandi VerrecchiaSandi Verrecchia
CMC, CPCC, MBA

Sandi Verrecchia is a Certified Management Consultant, holds a Masters degree and is a professional Leadership Coach. With over 20 years of experience in the financial services, academic and not for profit sectors, her diverse background of consulting, operations, marketing and sales is a wonderful compliment to her passion for coaching.