end non-disclosure agreements for companies affected by scandal


The counterproductive nature of NDAs in combating and preventing sexual harassment is not new, but their widespread use persists.

NDAs are the go-to for corporate boards when it comes to protecting the reputation – of the company and the author. At worst, NDAs facilitate further infringements.

The “family reasons” line

Sally Bruce, COO and CFO at Culture Amp and board member of Chief Executive Women, also spoke at the governance summit.

Ahead of his speech, Bruce told the Australian Institute of Corporate Directors (AICD): “For a long time when someone left the workplace because of their behaviour, the farewell was written in a way that indicate that she is leaving for family reasons or a career change or something.

“We have to name these things for what they are. A company could instead state that the departure was the result of an investigation into the conduct and [the person] not continuing here, based on code violation.

Instead, perpetrators of harassment or sexual assault are highly motivated to sign an NDA. Ask Harvey Weinstein.

Companies are also highly motivated to sign an NDA; sexual harassment is not good for the company’s share price or reputation. Just ask AMP.

No author or company wants to have a conversation about sexual harassment if they can possibly avoid it.

The victims, however, are silenced by the NDAs. Victims’ stories go unheard, warnings about the behavior of perpetrators cannot be given, and the courage of those who speak up cannot be recognised.

While NDAs may solve a potential short-term reputational problem, they do not solve the long-term, systemic health and safety challenge that workplace sexual harassment poses.

Not all victims will want to talk or want to be recognized. When a victim chooses to speak up – or if they do so at all – must be entirely up to that victim and not taken away from them through a restrictive NDA. Victims’ preferences should be placed at the center of counsel’s decision-making process.

Instead of turning to an NDA to seal a financial settlement and craft a generous resignation letter thanking the perpetrator for their service, boards could announce that someone was leaving because there was a clear violation. the company’s code of conduct, values ​​and commitment to the workplace. health and security.

The statement could also thank the victim, preferably anonymous, for courageously coming forward. Counsel could recognize the courage and commitment the victim has shown to provide a safe workplace for others and take the opportunity to encourage others to do the same.

The AICD supports the abandonment of traditional NDAs. While NDAs may solve a potential short-term reputational problem, they do not solve the long-term, systemic health and safety challenge that workplace sexual harassment poses.

James Fazzino, non-executive director of the APA Group and Rabobank Australia and chairman of the Tassal Group, told the AICD last year: “There is no place for non-disclosure agreements to close a problem .

“Non-disclosure agreements prevent harassed people from speaking out and telling their story, if they wish.”

Julia Szlakowski agrees.

Szlakowski is the woman who filed a sexual harassment complaint against Boe Pahari at AMP. She said: “Non-disclosure agreements are designed to muzzle victims of sexual harassment, protect perpetrators and help mask the toxic corporate culture that enabled the harmful behavior in the first place.”

She added: “NDAs are used by most companies and help contribute to a culture of silence. Breaking this silence is a daunting and precarious undertaking. It makes sense that cases of sexual harassment (and assault) are severely underreported.

Hillsong Church only spoke out this week when the most recent media coverage of the improper conduct allegations against Houston became widespread. Arguing that it had wanted to “act biblically and in accordance with good governance”, the council acknowledged that there had been a significant breach of trust.

We can only speculate if the Hillsong Church Board of Trustees had spoken publicly about Houston’s inappropriate conduct in 2013, it might have helped prevent further inappropriate conduct in 2019. Committed, as they say, to “understanding the truth,” these women should also be free to speak publicly about their experiences, if they choose.

Only when we feel able to talk openly about what happened in the past can we hope to prevent it from happening again in the future.

Kirstin Ferguson is a non-executive director, author, assistant professor at
QUT Business School and former Vice President of the ABC.


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