Corporate Culture and Misconduct Investigation

Woodbridge corporate and securities lawyer, Joseph Chiummiento, of Core Lawyers, describes the importance of “culture” in the workplace and potential legal trends likely to affect the workplace.

With the rise in the #metoo movement and increased attention being given to equality, diversity and inclusiveness companies are having to give attention to corporate culture, whistleblowing initiatives and feelings of safety or acceptance in the workplace more than ever.

Corporate Culture is defined by the President & CEO of a company, its board of directors and the shared beliefs within the organization

How Important is Corporate Culture?

Corporate culture is driven from the values reinforced by the President and CEO together with the Board of Directors. In larger organizations trust and loyalty can sometime drive decisions to promote, or can be higher priorities at times to merit. Shared beliefs, knowing how someone will react in tough situations and whether or not they pose risks to the leader all weigh into the creation of a culture within your organization.

Over the years most employees will watch and learn from the hiring and firing of others within the organization and learn what is important to management, whether implicit or explicit. Dealing with advances from those in positions of authority, watching as rules or policies are broken, noticing that anyone who challenges the status quo is met with repercussions are all pseudo disciplinary actions that exist in large organizations.

What values are being reinforced in your organization through “actions” that are pseudo-disciplinary? Has management promoted more of its kind? Has your management structure promoted based on shared beliefs – and have those share beliefs allowed individual authority, power or control to permeate across job and social settings in the workplace?

Are Shared Beliefs in the workplace bad?

Having a shared belief system is not a bad thing for an organization as it can help create amazing value, aligned customers and an engaged work-force. But what checks and balances does your company have to ensure individuals don’t abuse power, stifle creativity or take advantage of others in a subordinate position.

More importantly what resources exists for your employees to speak out anonymously without repercussions or retribution. Have you developed any of the following:

• An HR policy that clearly sets out what “misconduct” in the workplace is defined as and disciplinary actions for breaches of the policy?
• Enforcement of disciplinary actions?
• A Whistleblower policy and service that allows your employees to speak up anonymously or openly without fear of job loss.

Services like SurveyMonkey allow organizations to send out surveys, ask questions and receive feedback in an anonymous forum, and could be used to gauge a spectrum of culture issues or to sniff out any potential misconduct issues existing in your organization that management may not be aware of.

What resources exists for your employees to speak out anonymously without repercussions or retribution?

Liability for corporate culture protecting misconduct

Over the next year or so the courts will be asked to weigh in. While some organizations are doing well to highlight the continued importance of zero-tolerance for misconduct in the workplace others need the effects of court awards, legal fees, and stock price depreciation to understand the priorities have shifted in the workplace.

I believe there will be a brave few that will be forced to challenge old ingrained beliefs in the corporate world of large organization using the court systems. The real question will be who will be liable? Will the courts allow a piercing of the corporate veil and attribute liability to board members or will liability stop with the corporation and board member shaming drive corporate boards to change?

Take action, hire a law firm, lawyer, accountant or independent investigator to manage an investigation or to inquire as to what happened at your last #crazychristmasparty and set out an action plan to assess your culture. Knowing where you are or what risks exist is half the battle.

If you have any questions or wish to discuss your situation please feel free to contact me directly.