Stock investors have put ASX 200 company boards on notice to reduce the incidence of sexual harassment in workplaces.
An Australian Human Rights Commission (AHRC) study released Thursday showed just 19% of S&P/ASX 200 Index (ASX: XJO) companies accepted that the board has primary accountability for fighting sexual harassment.
The research, commissioned by investor advocacy group Australian Council of Superannuation Investors (ACSI), also showed just 19% of surveyed companies require directors to receive training on good governance and sexual harassment.
The shocking findings come after a rough 12 months among ASX 200 companies for their cultural response to sexual misbehaviour allegations.
AMP Ltd (ASX: AMP) infamously lost 2 board members over its handling of accusations against Boe Pahari, who was promoted to AMP Capital boss despite the cloud.
In September, QBE Insurance Group Ltd (ASX: QBE) suddenly sacked its chief executive after a complaint from a female employee.
Transparency was also a concern coming out of the study. Less than one-third of ASX 200 companies comply with ASX Corporate Governance Principles by reporting sexual harassment incidents to the market.
And 14% of them don't ever report to any external party.
Companies that ignore harassment risk long-term damage
Harassment incidents are obviously traumatic for those involved.
But there is also a massive cost to the company and its shareholders, according to ACSI chief Louise Davidson.
"There is plenty of evidence over recent times that companies that fail to appropriately manage this issue do significant damage," she said.
"Long term investors have an interest in ensuring the companies they invest in are well run, safe for their employees, and have culture that prevents and addresses workplace sexual harassment when it occurs."
Workplace sexual harassment cost the Australian economy an estimated $3.8 billion in 2018, said AHRC sex discrimination commissioner Kate Jenkins.
"Workplace sexual harassment causes immense social and economic harm.
"I welcome ACSI's initiative in commissioning this survey and report, and their recognition of the critical role that ASX 200 boards and executive management have in preventing and responding to workplace sexual harassment."
8 ways companies and shareholders can all improve
The research identified 8 actions ASX 200 companies and investors could take to improve treatment of sexual harassment cases:
- Ensure board has primary responsibility and accountability for harassment issues
- Ensure companies have skills and experience to prevent and respond to incidents
- Make gender equality a priority and set targets
- Ensure systems and frameworks are in place to manage risks
- Align appointment, expertise and performance management of CEO and executive team for leadership on sexual harassment issues
- Report internally and externally
- Investors should demand information on a company's systems and processes
- Investors should advocate for improved transparency on sexual harassment
