Toxic workplace culture can infect an organisation like a disease, and sooner or later has the potential not only to cause reputational but commercial damage. A 2018 report by Deloitte quantified the cost of sexual harassment to the Australian economy at $3.8 billion.
In an address to the Australian Council of Superannuation Investors conference this week, former AMP Capital director Julia Szlakowski warned that the burden and consequences of reporting sexual harassment continues to fall on those who lodged complaints.
Ms Szlakowski was forced to bring in external lawyers to settle a sexual harassment complaint lodged against her former boss in 2017 after AMP asked her to continue to work under the person in question. She filed a seven-page complaint with AMP which alleged a “pattern” of sexual harassment that culminated on a night in May 2017. When AMP’s people and culture function failed to internally address her concerns following an independent review of the allegations, Ms Szlakowski hired external counsel to resolve the complaint.
AMP suffered a cultural implosion that resulted in a mass exodus of staff, investors pulling billions in funds, and the company’s market value collapsing.
Ms Szlakowski is not exaggerating when she says that workplace sexual harassment is a “notoriously underreported human rights issue, a health and safety violation and a professional crisis”.
In her recent speech, she used the platform to call on companies and investors to conduct themselves within the moral and ethical norms of their customer base, or risk extinction.
Investors recognise that poor corporate culture ultimately impacts investment outcomes and it’s investors who can, and should, push companies to reconsider the serious implications of continuing to do business as usual by prioritising short term gains over long-term sustainability,
Ms Szlakowski said.
Poorly handled sexual harassment complaints can not only induce long-term trauma for the survivors who report it, but completely devalue a company’s global workforce – as seen in the case of AMP and its dramatic fall from grace.
Good corporate culture also can’t be faked. Ms Szlakowsi recalled it was AMP’s token policies of ‘diversity’ and ‘inclusion’ that initially attracted her to the company but, in reality, this was a world away from the harassment and intimidation she suffered.
Addressing toxic workplace culture and the behaviour experienced by Julia Szlakowsi requires a concerted response, from both the public and private sector, to support survivors and prevent future cases.
Earlier this year, the landmark Respect@Work report was released, and the Government’s in-principle acceptance of the 55 recommendations, is a reminder that one preventative solution is embedding education into workplaces.
The Fair Work Act is set to be amended considerably as a result of the findings, with changes including allowing employers to summarily dismiss perpetrators of sexual harassment in the workplace and changing the definition of serious misconduct to include sexual harassment.
The Fair Work Commission will also be given the function of assessing and enforcing compliance, including the power to undertake assessments of compliance and issue compliance notices. In this context, it will be more important than ever for employers to be on top of their compliance requirements and have transparent and clear mechanisms in place to track policies and training.
In the case of AMP, the unwillingness to act appropriately led to massive reputational damage and ultimately devalued its value in the market. With new legislation seeking to tackle sexual harassment in the workplace, and AMP’s very public #metoo moment, there must be a shift in our culture to support women like Julia Szlakowsi, and ensure that sexual harassment doesn’t occur in the first place.
