How a sexist culture can harm a company

#MeToo has increased the immediate risk for companies that tolerate a toxic workplace culture.

There’s a long list of reasons why companies should encourage a diverse and non-​discriminatory workplace, from making the most of their talent to basic human decency. But the #MeToo movement has highlighted another – the risk that a rotten company culture could bring a firm to its knees.

Permitting a laddish workplace culture to develop unchallenged exposes organisations to unnecessary business risk and makes them “complicit” in sexism, says Ann Francke, chief executive officer at the Chartered Management Institute.

“Combating sexual harassment involves a lot more than oblique warnings not to get into a lift with David, Bill or John or tut-​tutting over so-​called locker room behaviour and language,” Ms Francke says. Rather, it’s about addressing a “wide range of entrenched attitudes and behaviours” that can be as subtle as they are bullying.

The immediate financial risks of permitting the development of a male-​dominated culture were thrown into sharp relief by the case of film producer Harvey Weinstein. Less than six months after allegations of his sexual misconduct sparked the #MeToo movement, the Oscar-​winning company he co-​founded, The Weinstein Company, collapsed into bankruptcy after becoming an outcast from the entertainment world.

In other cases, important executives have been forced out, such as Travis Kalanick, co-​founder and CEO of Uber, his fate sealed in part by disclosure of a management trip to an escort bar in Korea.

However, a company may also be at risk from actions far below board level: for example, failing to properly investigate allegations of inappropriate behaviour after an alcohol-​soaked company party.

“I hope we have all started to realise that sexual harassment is endemic in society and that unlike the old days, businesses can no longer afford to downplay it,” says Sarah Henchoz, employment partner at the Magic Circle law firm Allen & Overy. “If a woman comes forward to complain about inappropriate behaviour, out of hours, by a male colleague and is told that ‘he is always like that’ and that they should ‘forget it,’ she will be understandably upset and angry with her employer.”

Many of the high-​profile cases involve behaviour that is obviously illegal in any jurisdiction. However, a laddish culture can be toxic and risky without necessarily being illegal. While many people may share a definition of types of behaviour that clearly cross the line, there is also what Ms Henchoz calls “a grey zone of jokes and banter which may be acceptable to some, but not to others.” She says her “advice to clients is that if they hear a voice in their head questioning whether or not they should say something, the rule of thumb is not to.”

Ben Willmott, head of public policy at the Chartered Institute of Personnel and Development, sympathises with the view that having fun at work can make the day go faster.

“Nobody wants a workplace which feels strangely inhuman, or where people can’t be themselves, but office banter can be a real problem if it leads to people in authority feeling invulnerable or impervious to criticism,” he says. “While a director may not see himself as a sexual predator and may be horrified if somebody highlights examples of their predatory behaviour, the fact they were ‘merely having a joke’ will never be an excuse or a defence in law.”

Although the recent accounts of exploitative behaviour by influential men may have served as a wake-​up call for complacent boardrooms, Ms Henchoz believes that #MeToo is far from finished.

“Speaking both professionally and personally, I really hope this debate runs and runs for the foreseeable future,” she says. “For the first time in my career, sexual harassment has become a story with both longevity and weight and I am optimistic that real change is already happening.”

“In the long term, I believe the lurid headlines will be used as a springboard to look at other areas of fair treatment – equal pay reporting for example – and to start creating a healthier corporate climate for all of us,” Ms Henchoz continued. “But for now, I hope that the shocking nature of the current wave of accusations will finally make boardrooms say: ‘Enough. No More.’”