With two high-profile CEOs recently being called to account over workplace sexual harassment, it's now up to HR to lead the way
The workplace culture of financial institutions has been in the spotlight the past couple of weeks.
The chief executive of QBE, Pat Regan, is to leave the company following a complaint from a female employee. The outcome of an external investigation into workplace communications found he “did not meet the standards set out in the group’s code of ethics and conduct”. QBE said in a statement its board had taken “decisive action” following the investigation.
Meanwhile, at AMP Capital, David Murray resigned as the chairman after employees and shareholders raised concerns about his handling of complaints against Boe Pahari, former CEO of AMP Capital. Pahari himself resigned after only two months in the role following the re-emergence of a 2017 employee complaint made against him by a female colleague.
In an AMP statement, the Board reiterated that Pahari’s comments and behaviour in this matter were unacceptable and apologised to the employee who made the complaint.
Pahari also apologised and acknowledged the significant impact the matter has had on AMP's clients, people, and shareholders.
"I have decided to stand down as AMP Capital CEO in the interests of all parties, and to minimise disruption to the business," he said.
The recent publicity has no doubt prompted many organisations to reconsider how they recognise the right people and prioritise cultural change.
However, the good news is that HR can play a significant role in guiding organisational culture and promoting ethical leadership, according to Karen Gately, founder of Corporate Dojo.
From an HR perspective, Gately said the key is to help businesses have a better understanding of why driving cultural change and ethical leadership is a “commercial priority”.
“I think HR often struggles when they are only arguing from a place of ‘it’s the right thing to do’," said Gately.
“A great culture is clearly what people deserve and should be the focus, but it’s too often the case that leaders fundamentally don’t focus enough on that.”
Gately said the result can be unwise decisions, such as appointing a leader irrespective of that lack of trust and respect they have from the rest of the workforce.
Educating senior leadership about that link between commercial outcomes and culture means explaining how culture helps manage risk more effectively and leads to better business outcomes.
“Having that conversation is the most powerful thing to do because HR alone can’t drive cultural change, they can only support it,” said Gately.
“They can do this by providing leaders with the resources and knowledge that they need to perform responsibly and inspire others to do the same.”
Culture fundamentally comes down to the way in which leaders set expectations, coach people and are held accountable, added Gately.
If organisations reward and recognise the wrong types of behaviour, “then we are just going to get more and more of them”.
Gately added that HR can have as “many posters on the wall articulating values as they like”, but until leaders make ethical behaviour matter - starting with their own – then culture won’t change.
Where companies come unstuck is when they compromise on values and make decisions that undermine trust, respect and engagement in the workforce.
She added that when human beings feel trusted and respected then they are more likely to dig deep.
“They are more likely to go beyond the call of duty and strive to enable the business to be successful,” said Gately.
“When people don’t trust their organisations then what the company gets is people who only doing as much as required to keep their jobs.
“If you really want to tap into the full strength of your team’s capabilities then you have to earn it. You have to inspire people to want to give their best.”