Your CEO got fired for sexual harassment. Is your board really ready for what's next?

The #MeToo movement hasn't changed much in boardrooms across America. The majority of boards — 57 percent — still haven't discussed sexual misconduct or sexism in the workplace, according to a February and March survey of board members and venture capitalists conducted by theBoardlist and Qualtrics. 

Boards may believe sexual misconduct would never happen in the top tiers of their organization. Yet executive misconduct of any kind and systemic cultural issues like sexism are absolutely governance issues. So why wait to discuss the potential risk? 

Respondents to theBoardlist-Qualtrics survey said their boards hadn't discussed sexual misconduct or sexism because these issues are low priority, irrelevant or threatening to the CEO. 

However, a closer look at how companies are rebounding from #MeToo reveals why all boards should discuss sexual harassment, despite initial misgivings. Many women now fill roles vacated by executives for sexual harassment or assault. Hoda Kotb replaced Matt Lauer on "The Today Show." Edith Chapin took over as NPR's chief news editor following David Sweeney's departure. Robin Wright took the spotlight from Kevin Spacey on "House of Cards." The solution seems simple: Put a woman in charge. It gives a qualified woman the chance to lead. It subverts the power structure in traditionally male-led industries. And while it doesn't right the wrong, it signals something powerful to women in the workforce: You have an advocate at the top. 

Unfortunately the solution workplaces need is both more nuanced and more sweeping. Consider the decision to appoint a woman to lead after an executive is ousted for sexual misconduct: How does the board make it clear she was chosen for her talents and experience, rather than as a token female leader tasked with cleaning up the mess? Even more importantly, how can boards help change the cultural norms that allow such transgressions to occur? 

"People don't have these conversations because they are not comfortable having them," said Antoinette Hardy-Waller, RN, BSN, founder and CEO of The Leverage Network, a nonprofit dedicated to advancing African-Americans in executive, governance and entrepreneurial healthcare roles. Ms. Hardy-Waller has extensive governance experience, most recently on the board of stewardship trustees for Englewood, Colo.-based Catholic Health Initiatives. "In light of what's happened with the #MeToo movement and all the claims that have occurred, in order for organizations to reduce their risk and effectively take care of their organizations, they need to begin to have those conversations." 

Boards set the tone 

Boards owe it to the employees of their organizations to engage their corporate compliance and HR committees in a review and refresh of sexual harassment policies and investigative procedures, as well as diversity and inclusion programs. Ensuring governance policies are up-to-date creates a framework for boards to process potential sexual misconduct claims if needed, and, if an executive is dismissed, outline the qualities of the ideal candidate for the job and the organization. 

"A board ought to look at itself on an ongoing basis," said R. Edward Howell, professor of public health sciences at the University of Virginia in Charlottesville. "When an executive is dismissed, that's a very appropriate time [for a board] to look at itself and ask, 'How are we doing? How are we setting the tone? Is it possible that the board had some failing that led to this misconduct or harassment?'" 

Mr. Howell has nearly 40 years of experience leading academic medical systems, most recently as vice president and CEO of the University of Virginia Medical Center. He is also dedicated to board service and currently chairs the ethics committee of the Jefferson Board for Aging, among other governance engagements. Mr. Howell believes boards set the tone for organizations. The board can send the message that diversity and inclusion are critical to an organization's mission, not just a numbers game or a check-the-box program. If leadership does not come close to reflecting the diversity of an organization's staff or the community it serves, that indicates diversity policies need to be revisited. In many industries like healthcare, there is still work to do. 

"If you look at the workforce in healthcare, it's dominated by females," said Mr. Howell. "There are certainly a large number of qualified persons available to take positions that are turning over." 

The lack of women in healthcare leadership should be an even greater motivator to review talent pipelines than the #MeToo movement. Women make up approximately 62 percent of the healthcare workforce, but fill only 49 percent of healthcare leadership positions, according to a 2017 LinkedIn analysis. Women are even more scarce in hospital executive ranks. Just 26 percent of hospital CEOs are women, according to a 2013 analysis conducted by the American College of Healthcare Executives. If an executive position or board seat is vacated, for sexual misconduct or otherwise, hospital boards can view the turnover as a potential opportunity to reduce longstanding gender discrepancy. 

The decision to promote a qualified woman following an instance of executive sexual misconduct can ignite a cultural shift, especially in industries like healthcare. Sexual harassment and assault are not uncommon in medicine, and the field's innate hierarchy can silence those who fear stigmatization for reporting issues. Almost a third (30 percent) of female clinician-researchers reported sexual harassment in a survey published in JAMA in 2016, and among those who did, 47 percent reported these events had a negative effect on their career. An informal Medscape poll puts those numbers even higher, with 71 percent of female physicians reporting sexual harassment on the job, compared to 25 percent of their male counterparts.

How to avoid the glass cliff 

If a female candidate is promoted after an executive is dismissed for sexual misconduct, the board needs to carefully manage that transition so the executive and organization understand she was chosen for her talents and experiences, not as a patch for a sticky PR situation.

This distinction is critical because organizations often promote women or minorities to lead in difficult times. So often, in fact, the phenomenon has a name: the "glass cliff." 

Researchers Michelle Ryan, PhD, and Alexander Haslam, PhD, first noticed the glass cliff in 2005 when they found women were starting to secure more board seats, but compared to their male peers, the seats they took were disproportionately volatile — the firms were performing poorly or in the midst of a crisis. 

A common example of the glass cliff is Marissa Mayer, who was appointed CEO of Yahoo in 2012. She took the helm at a particularly tough time for the tech firm, which had been losing to Google in search and had cycled through four CEOs in four years. She led the firm for five years and was ultimately ousted during the Verizon acquisition, shortly after being crowned the "least likeable CEO in tech" by Owler.

Researchers have attempted to understand why glass cliffs like this occur. A study published by The British Psychological Society in 2010 indicates gender and leadership stereotypes may be at play: Companies see a crisis or downturn as an indicator it's time to change the status quo, and they also see female leaders as possessing the skills to lead during tumultuous times. A woman becomes the token female leader tasked with harmonizing and nurturing an organization after crisis. She may also be more likely to fail; and if she does, organizations may be compelled to return to the status quo. 

However, this can be avoided. When more women lead, organizations are less likely to attribute the failure of one woman to her gender. Researchers Susanne Bruckmüller, PhD, and Nyla Branscombe, PhD, note: "Merely mentioning that the organization has had women leaders was sufficient for the glass cliff to disappear. This suggests that an effective way to avoid the emergence of glass cliffs in corporate settings would be to strive for a more diverse management." 

Eliminating the glass cliff requires long-term commitment from boards to increase gender diversity at the executive level. When a female executive vacates a role, boards should consider filling that spot with another qualified, diverse pick — something that doesn't actually happen that often. For example, between 2009 and 2017, just three of 19 female CEOs of S&P 500 companies were replaced with another woman, according to Bloomberg. After Ms. Mayer, Yahoo installed Thomas McInerney as CEO, and paid him twice the base salary Ms. Mayer received.

"We're not asking our organizations just to hire or promote women just because they are women," Ms. Hardy-Waller said. "I mean we are asking them to consider women who are actually hiding in plain sight, who clearly meet — and most times exceed — expectations for a role. It's an opportunity to give them a chance and begin to level the playing field."

A more immediate solution for the glass cliff after #MeToo involves distancing the choice of a successor from the situation at hand through documented executive search procedures. "The ultimate goal is to try to identify the individual who can best meet the needs of an organization; articulate the knowledge, skills and experience you are looking for, and if you find that in the executive, you can articulate that and it should be obvious to all," Mr. Howell said. 

Beyond #MeToo

Making decisions about executive appointments post-#MeToo will require a significant amount of self-awareness in boardrooms, which are still disproportionately white and male. In 2016, 27.8 percent of new board appointees were women — a 2-percentage-point decline from 2015, according to the 2017 "Board Monitor" report from executive search and consulting firm Heidrick & Struggles. Just 22 percent of new board appointees were racially or ethnically diverse. 

"Because most boardrooms are primarily made up of white males, I think the #MeToo movement has really clearly heightened the anxiety for what we do next," Ms. Hardy-Waller said. "Hopefully the movement has instilled enough [in those board members] to persuade them to think more deliberately about including women in the process. It clearly raises awareness around gender diversity on boards and also around the fact that we've been experiencing this systemic sexism for way, way too long." 

In healthcare, this moment of introspection for boards and C-level executives comes at an opportune time, when many baby boomers are ready to retire from their leadership posts. "Replacing those individuals, I think, provides the greatest opportunity for diversity for identifying talented women and putting them into leadership positions — and much more so than the current situation, which will be seen by many as reactive," Mr. Howell said. 

Even beyond executive roles and board seats, organizations can use momentum behind the #MeToo movement to more broadly address some of the more insidious issues all women face in the workplace. 

"It goes beyond sexual harassment. It's pay equity, lack of job promotion and it's limited board opportunities," Ms. Hardy-Waller said. "I would love to see how we could expand [#MeToo] across all industries, across all sexism we experience. Then the question becomes: Beyond that, how do we take it to the next level and begin to hold organizations accountable for allowing [systemic sexism] to happen in their organizations?"

 

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