Perhaps it’s that the issue is too complicated, too thorny, too hot. Or perhaps there’s a more clinical reason – for many market participants how a company deals with sexual harassment simply doesn’t fit into the investment matrix.
While climate change and other human rights issues such as equal pay for women have increasingly become important issues for investors in recent years, the issue of sexual harassment does not seem to pique the same level of interest.
Yet this could soon change. There is a real prospect the ASX could soon bring in new guidance about reporting of sexual harassment policies and approaches by listed groups.
For one powerful group of investors, the Australian Council of Superannuation Investors (ACSI) which represents investors controlling $1.5 trillion in super savings, workplace sexual harassment is a serious topic that needs to be dealt with by companies.
“For a start, sexual harassment is illegal. Secondly, there is no doubt that the way companies manage sexual harassment can present a ‘non-financial risk’ as it has the potential to impact on its social licence to operate, staff morale, and the ability of a company to attract talent,” ASCI boss Louise Davidson tells The Age and The Sydney Morning Herald.
For years allegations of #metoo moments have been expected to ‘rock’ corporate Australia, but unfortunately the impact causes more of a whimper than a bang. AMP’s share price has barely moved since the allegations.
AMP is not the first to face the issue. David Jones, ANZ Bank, IFM Investors, AFL, Seven West Media and many other groups have all faced various allegations relating to the issue over the past decade, though some were questions of allegedly inappropriate consensual relationships rather than harassment and some allegations were made against staff in offshore hubs.
A landmark report by the Australian Human Rights Commission released in May recommended a number of changes to how organisations deal with sexual harassment including making the facilitation or creation of a hostile environment unlawful and creating a positive duty on employers to protect employees.
It also made a key recommendation (recommendation 44) that the ASX Corporate Governance Council introduce sexual harassment indicators for ASX-listed entities to report against. It said this could include, “information about measures taken to address sexual harassment, as part of its requirements that listed entities have and disclose a diversity policy and set measurable objectives to achieve gender diversity”.
Sex Discrimination Commissioner Kate Jenkins says the recommendation came from the success of previous amendments to the ASX Corporate Governance Councils principles and recommendation in 2010 in which organisations were asked to set gender equity targets and if they failed to reach them explain why not.
“It’s a method referred to as the ‘if not, why not’ approach, and was recognised in Iris Bohnet’s excellent 2016 book What Works as an effective strategy of driving behavioural change without mandatory quotas,” Jenkins says.
“Since the amendments were introduced, female directors of ASX 200 entities increased from 8.3 per cent in June 2009 to 30 per cent at the end of 2019. It was this example that we had in mind when making recommendation 44,” Jenkins says.
Yet a spokesman for the ASX said there was little interest in the issue from market participants during a recent updating of the council’s rules and recommendations published in 2020. “It was extensively consulted upon and this issue was not then raised by stakeholders.
“The suggestion made by the Human Rights Commission is an interesting one, which should be considered in due course in the consultation on the fifth edition. Whether it is adopted will be a matter for the Corporate Governance Council, which is independent of ASX.”
ASCI is a council member. Davidson says the body supports the recommendation from the AHRC to the ASX Corporate Governance Council.
“While the appropriate measures will need to be developed, investors would welcome more detailed information on measures taken to address sexual harassment and clearer objectives on gender diversity. At the moment it is very difficult for investors to assess how well companies are addressing these issues and disclosures are limited.”
Companies already report their policies to the government’s Workplace Gender Equality agency but there is a gap between words and action, says the body’s engagement executive manager Kate Lee.
“Nearly every organisation in Australia reports to us that they have policies, strategies and grievance processes in place – but these are clearly not translating into safe and healthy workplaces for women,” Lee says.
“The ongoing reports of sexual harassment show that unhealthy cultures have been allowed to thrive in many workplaces in Australia.”
Josh Bornstein, a leading workplace lawyer at Maurice Blackburn who has represented hundreds of clients including four former associates to former High Court judge Dyson Heydon, says there will still be problems if companies only have to rely on having policies and value statements.
“One of the great difficulties in sexual harassment matters is that companies have fantastic policies on sexual harassment and they have done for decades but the policies are unenforceable,” he says.
“And they’re deliberately unenforceable because companies craft employment contracts so the contract says you cannot enforce our company policies against us.”
“Company policies are like company value statements and corporate social responsibility programs, they’re often a good public relations vehicle but not usually a good guide of what’s going on inside the company.”
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Sarah Danckert is a business reporter.