Workplace issues such as bullying, discrimination and harassment – which have come under the microscope in the #MeToo movement – now present far more significant risks to businesses and should be at the forefront of risk managers’ minds, according to Marsh.
Organizations now face both employment and reputational risk as a result of these workplace issues, and are at increased risk of facing employment-related claims, says Eleni Petros, employment practices liability insurance practice leader, at Marsh.
“These issues have traditionally been seen as something that is a HR issue for HR professionals to be concerned about… But because of the increased awareness around these employment risk issues, they really should be on risk managers’ agendas and boards’ agendas,” Petros told Corporate Risk & Insurance.
We are already seeing litigation come out of the #MeToo movement, particularly in the US, including some high-profile examples of significant financial damage as a result. The Weinstein Company, whose disgraced ex-chairman Harvey Weinstein has been accused by more than 70 women of numerous counts of sexual harassment and assault, filed for bankruptcy in March after the firm imploded post #MeToo.
According to Petros, those at the top of organizations need to ensure they are fostering the right culture – particularly in today’s litigious environment.
“The issue for companies is that if you have a situation where the culture isn’t right top-down, then the danger for boards and directors is the claims against them will be – you knew this conduct existed and you did nothing about it,” she said.
The gender pay gap has also shone a light on the lack of women in senior leadership positions in many industries, and has heightened the awareness of unfair practices and discrimination at work.
“It will raise scrutiny. If companies have a massive gender pay gap, I think there will be questions raised by employees as to whether they are being paid the same amount of money as the person next to them,” Petros said.
For now, many risk managers are not prioritizing these issues as much as they should.
“Unfortunately, I think it will take a big, high-profile case [to get it higher on risk managers’ agendas],” Petros said. “I would be interested to see if that changes, but think until that happens, I would query whether there is a real awareness by boards of these risks.
“I don’t think companies and boards can afford to leave it as just a HR issue anymore. I think it very much needs to be at the center of the board’s agenda.”