Validation of Corporate Ethics and Compliance Liabilities: “The Weinstein Clause”

Following the exposure of sexual misconduct cases in the last few years, corporate advisors and boards are focusing more attention on reputation management.

It is imperative for companies to validate and document their corporate integrity. Third party agency audits have begun to be used, in an effort to certify a minimum of liability within a corporation. This becomes acutely important in the process of company mergers and sales. These validation audits can be difficult to accomplish when audited employees are fearful of openly sharing information due to retaliation.

Instituting an anonymous and interactive system for employees to share their observations and knowledge is beneficial for corporate leaders to validate their internal corporate reputation.

The Residual Effects on Company Mergers

One way companies are establishing their intolerance to behavioral misconduct is with “The Weinstein clause” as reviewed in a Bloomberg article between merging companies. The residual effects will continue to transform the internal expectations of all company employees, especially organizational leaders.

Companies are making certain that any merger agreements now also include guaranteed repercussions to any “subsequent revelations of inappropriate behavior damage the business.” As noted in the Bloomberg article, early 2018 saw “at least seven deals” in the “entertainment, real estate, and hospitality” industries to include “the Weinstein clause.” “The target attests that nobody has accused managers or directors, as well as executives who manage a large number of employees, of sexual harassment.”

The Residual Effects on Companies

Companies are becoming extremely intolerant of behavioral misconduct, and they are putting more attention on their own human resource environment. They are “working faster to act on allegations of bad behavior and weed out the perpetrators.” No longer is the bottom line of a company the only thing that is taken into consideration in mergers and aquisitions. Per John Waldron of Goldman Sachs Group Inc., “more of the right questions are being asked around culture and behavior.”

Validating the Integrity of Your Company

Tellzen Employee Communications Platform interactively and anonymously reaches out and addresses these issues, and opens an ongoing anonymous channel of communication. This confidential communication platform can be incorporated with ease since the resources are TellZen based, rather than relying on a company’s internal IT resources. This secure, third-party channel empowers your employees to speak freely and openly without the fear of retaliation, providing the validation of your company’s integrity from top management on down.

Facilitating Ethics and Compliance Infraction Investigations

Tellzen helps you manage your organization’s risk by proactively discovering and addressing issues that may cause financial harm and/or reputational damage, discovering issues, such as harassment, discrimination, and theft if it should exist.  Enhance your employee engagement in a variety of ways, collecting ideas and feedback in a true communication channel.

Engage with Your Employees as a Part of Reputation Management

The Tellzen way is engaging and empowering for you and your employees. Let us show you how to strengthen your organization with integrity for internal harmony and success. The residual effects of your company’s integrity will resonate in the performance and productivity of your employees. To learn more, request a demo today.