Clifford Chance

A failure to create an inclusive workplace (in terms of recruitment, pay and career opportunities) can lead to a diversity debt, talent loss, and discrimination claims. Pay gap reports and the focus on board and pipeline diversity can be seen as a threat or an opportunity to solve underlying problems. Training, remuneration and appraisal structures, strong anti-harassment policies, positive action, removing bias from recruitment (including in using AI), and calling out and eliminating bad behaviours, are just some of the tools that employers can use to overcome this. In certain sectors, getting inclusion and diversity right is also becoming a prerequisite for doing business.

The worst way to find out about an employee concern is a scandal splashed across the news, or a phone call from a stakeholder - or worse, an unreported concern leading to a disgruntled employee (and litigation). A strong internal speak-up culture, an efficient grievance and whistleblowing process, engaging with staff at all levels, monitoring the effectiveness and outcomes of grievance processes and appointing a non-executive or supervisory director with responsibility for engagement on these issues allows an employer to hold itself to account - and can alert organisations to necessary actions before they escalate into business risk and a front page story.

In the wake of #metoo, heightened stakeholder scrutiny of conduct and tighter regulation around issues such as data protection, rogue employees can cause reputational/cultural impact - and harm fellow staff or the business. Further, key business assets are at risk of employee action - a defecting employee may take confidential data or try and poach a team. Clear messaging at all levels about acceptable behaviours, implementing focused controls (including strong restrictive covenants and GDPR safeguards) and consistent enforcement are just some ways to reduce these risks.

Setting the right objectives and getting promotion and reward structure right at all levels is key, not just to prevent a talent exodus, but to instill the right culture in an organisation and to prevent stakeholder or legal challenges. Clawback and deferral can be key tools in controlling and rewarding staff. However, a positive workplace culture, in which employees feel motivated by pursuit of shared goals and being 'looked after', can also prevent high staff turnover and prevent the risk of claims and problematic behaviours.