With the seemingly daily news reports of sexual harassment scandals, business owners and investors are starting to realize an inconvenient fact: leaving the problem of workplace sexual harassment to the human resources department or middle-managers may no longer be adequate. Instead, owners and investors are beginning to recognize that they should – and must – use their enormous leverage over companies to demand accountability from the top down.

Traditionally, investigations and enforcement of sexual harassment issues in the workplace fall onto the shoulders of middle-level managers and human resource professionals. While this structure is necessary, it is not sufficient. Nor is simply adopting an anti-harassment policy and holding an annual workplace training. Rather, anti-harassment measures must be continuous, cultural, and spearheaded by owners and upper-level management. Increasingly, investors are rightly beginning to demand that boards of directors and upper-level management answer tough questions about the company’s policies and their effectiveness, and whether the corporate culture encourages sexual harassment, covers it up, or outright ignores it.

College business students are taught that, as a practical matter, the ultimate influencers in any company are its owners, shareholders and investors. Indeed, the highest-level executives of every company essentially work for the company’s equity owners. Now that sexual harassment claims and stories are front and center in the news, business owners would be well-advised to ensure that their anti-harassment policies are up to date and appropriately enforced. From a risk-management and corporate culture perspective, companies should review and possibly strengthen their handbook policies and approaches to ensure they are doing all they can to eliminate sexual harassment and the risks it poses to employees’ well-being and morale as well as the bottom line.

For more information on this important issue for your organization and other business or employment law matters, contact PLDO Partner Brian J. Lamoureux at 401-824-5100 or [email protected]. We welcome your comments, questions and suggestions.