Written Testimony of Anne Wallestad President & CEO BoardSource

Meeting of October 31, 2018 - Revamping Workplace Culture to Prevent Harassment

Good morning Acting Chair Lipnic and distinguished members of this Commission. My name is Anne Wallestad, and I am President and CEO of BoardSource, a globally-recognized organization focused on strengthening nonprofit leadership at the highest level - the board of directors.

The board plays an essential, but unique role in addressing workplace harassment. As leadership bodies that are focused on organizational strategy and fiduciary oversight, they are not involved in the day-to-day leadership and management of an organization. Therefore, the board's role in preventing and addressing harassment is somewhat removed from those day-to-day realities, and focuses primarily on organization-wide policy-setting and chief executive oversight.

Through these two levers - organizational policies and proper CEO oversight - the board has not only an opportunity, but a responsibility, to ensure that the organization treats employees fairly and appropriately, that it is in compliance with all relevant laws, and that issues of harassment are being addressed. Sometimes this is done through direct action by the board. More frequently, however, the board's role is to ask the right questions and ensure that the CEO is leading in a way that effectively prevents and addresses harassment.

Unfortunately, not all nonprofit boards are embracing this responsibility. Within the past year, there have been reports of organizations where the board's action - or inaction - in the face of serious issues of harassment has been extremely problematic.¹ With that in mind, I would offer the following in terms of general guidance about what the board must do to fulfill its essential responsibilities.

ORGANIZATION-WIDE POLICY SETTING

A fundamental board role is to ensure that there are strong policies and practices related to reporting and addressing harassment. First and foremost, every organization should have a formalized whistleblower policy that enables staff to report issues of abuse or wrongdoing at any time. This should include a direct reporting line to the board of directors so that reports related to the CEO's own leadership cannot be suppressed by the CEO. It should also include a protocol that alerts the board of any reports made at the staff level and how they are being addressed.

Boards should also ensure that they are comfortable with the organization's policies and practices related to each of the following:

Hiring and references

In publicized accounts of situations at two high-profile nonprofits1, employees who had histories with sexual misconduct went on to hold leadership roles at other nonprofits, which underscores the importance of thoughtful reflection on the appropriate way to handle reference and background checks, both for potential and former employees.

Boards should proactively ask:

• Based on the work that we do, are we required to conduct criminal background checks on all potential employees (and/or volunteers)? Even if it's not legally required, should we adopt that practice? What other mechanisms do we have in place to vet potential employees and volunteers?
• What are our policies related to reference checks? Do we have a mechanism for preventing a current employee from providing a positive reference for a former employee who was involved in sexual misconduct at our organization?
• Does the demographic makeup of our staff or leadership create any "red flags" as it relates to the hiring practices of the organization? Is there any evidence that women, or any other subgroup, are being overlooked for positions, whether in initial hiring or advancement opportunities?

Reporting, investigation, and consequences

Addressing harassment requires that victims and witnesses have a mechanism for reporting misconduct and confidence that the organization will take the allegations seriously. Unfortunately, some nonprofit organizations in the past year have faltered in their response to reports of sexual misconduct or other harassment, which makes the case for proactive board-level dialogue about how such instances would be addressed in advance of being faced with that reality. Boards should proactively ask:

• Are there reporting mechanisms that encourage victims of harassment or assault to come forward, regardless of who the perpetrator was? What expectation should be set about when and how the board will be notified about allegations and/or investigations?
• Is there an expectation that every reported incident will be investigated? In which scenarios should that be an external-versus internal-investigation? When should allegations be reported to law enforcement?
• What general guidelines should be set about the consequences for harassment? How should those guidelines apply to non-staff stakeholders, such as volunteers, donors, or even board members themselves?

Communications & accountability 

The way that organizations communicate with staff and external stakeholders after an incident of harassment sends a signal about their values. Organizational responses should prioritize accountability and corrective action and be communicated through a designated spokesperson empowered to speak on the organization's behalf. An example that serves as a cautionary tale on a number of levels comes from the Humane Society of the United States. In the wake of a harassment scandal with their now-former CEO, a board member commented, "Our mission is to help animals, not to investigate [CEO's] allegations from years ago."²

Boards should proactively ask:

• If faced with a situation of sexual misconduct by someone affiliated with our organization, how will we demonstrate accountability?
• Do we have clear policies about who is empowered to serve as a spokesperson for our organization?
• In what circumstances would we err on the side or more (or less) transparency in our communications?

CHIEF EXECUTIVE OVERSIGHT

The board is also responsible for chief executive oversight, which plays an essential role in preventing and addressing workplace harassment. The board is responsible for ensuring that the CEO is providing strong leadership to the organization and its staff as well as ensuring that the CEO's power doesn't go unchecked if there are issues of abuse or mistreatment. In fact, in the case of a CEO who is condoning-or is at the center of-an organization's harm of its employees, board-level action may be the only recourse.

That said, boards do not typically see the chief executive's leadership and work on a daily basis, which can make it difficult for them to have the full picture on how a CEO or executive director is actually leading. And it can be very easy for boards to have a false sense of security about the chief executive's leadership based on what they see in the context of board meetings or other direct engagement between the chief executive and the board.

To effectively leverage CEO oversight as a mechanism for preventing and addressing workplace harassment, boards must work to get a more well-rounded view of the chief executive's performance, while simultaneously respecting the distinct roles of the board and CEO. Beyond the whistleblower policy, the best and primary way to do this is through a thoughtful annual evaluation process that incorporates feedback from staff.

More specifically, boards should construct an evaluation process that includes at least some of the following inputs:

• Direct, 360 feedback: BoardSource recommends that each CEO review includes feedback from-at a minimum-those employees who report directly to the CEO. This is one of the only opportunities that boards have to invite staff feedback in a way that is respectful of the CEO and does not signal a lack of confidence from the board. It also encourages honest feedback by protecting staff members' confidentiality.

• Staff surveys: Staff surveys can be a helpful window into the CEO's leadership of the team as well as the overall health of the organization.
• Staff retention metrics: Boards should pay attention to any spikes in attrition or significant variances within different demographic categories of staff, which could be a signal of challenges.
• Publicly available commentary & feedback: Boards can take advantage of publicly available commentary on sites like Glassdoor.com, which enable employees (and former employees) to share candid feedback about the organization's work environment.

Boards that fail to invite team feedback as a part of these annual reviews (including the 40 percent of boards that do not do annual CEO evaluations at all³) are missing an important opportunity to better understand the CEO's leadership, which may be putting their organizations at risk.

Additionally, boards should pay attention to subtler signals that may be illuminating in terms of the CEO's leadership style and orientation to staff, whether as a part of the formal review process or more generally. This might include observations about:

• The willingness of the CEO to engage senior staff leaders with the board: A CEO's extreme aversion to contact between the board and staff-including in board meetings and committee meetings-may be a signal of underlying challenges that the board may need to better understand. It could reflect a lack of transparency around organizational performance, a loss of confidence in the CEO's leadership within the team, a weak or dysfunctional senior leadership team, generalized leadership insecurity or paranoia, or something else.
• The way that employees act in the CEO's presence: When team members-particularly at the senior team level-are afraid to speak up, look to the CEO before saying
• The way a CEO talks to (or about) the team: Speaking rudely or dismissively to or about the team or individual team members may be evidence that the CEO devalues the team, which could be playing out problematically within the organization.
• The failure to recruit and retain talented people of color or women: Finally, an organization's failure to recruit and retain talented people of color and women could be a warning sign for the board about the organization's culture and its CEO's leadership. Paying attention to hiring and promotion patterns, retention rates and average tenures in a way that disaggregates by demographic categories may help the board to detect if there are issues of bias, hostility or abuse.

While it is important for boards to pay attention to staff inputs and observable leadership dynamics, they must also acknowledge that context matters. What is happening within an organization and its operating environment can have a significant impact on the staff experience. For example, an organization that is going through major changes or is in financial distress may have staff members who are feeling anxious about their job security, limited in terms of their budget or programs, or frustrated by changes that are happening around them as a part of efforts to right the ship. All of these things can have an impact on the feedback that is shared. If staff members (or former staff members) share pointed feedback about a CEO's leadership-particularly on something like Glassdoor-board members should avoid knee-jerk reactions to what could simply be complaints from a frustrated or disgruntled employee. Instead, they should focus on broad themes that are worthy of exploration with the CEO, keeping in mind that the CEO's job is to navigate the organization through challenging or complex situations and make decisions that are measured not by their popularity but by the extent to which they advance the organization's goals and impact.

BOARD HARASSMENT & COMPLICITY

Finally, the board must be willing to contemplate how they themselves might be contributing to a culture that enables sexual misconduct or harassment, whether directly or indirectly.

A recent Inside Philanthropy article highlighted that-when it comes to sexual harassment-board members themselves are sometimes the problem, propositioning or otherwise harassing nonprofit employees.⁴ Boards should ensure that there is a mechanism for reporting and addressing sexual misconduct by a board member and that there are protections in place to assure a chief executive and other staff members that they won't face retaliation if they report a board member's bad behavior. As a part of this discussion, boards should also consider if there are other behaviors or activities that would be considered misconduct by a board member, even if they are not sexual harassment or assault (e.g., dating or having an intimate relationship with a staff member), and how they would handle it if such an issue arose.

Another area for board reflection is around performance metrics, and ensuring that they are not creating perverse incentives to ignore or silence allegations of harassment. According to the same Inside Philanthropy article, "One reason charities look the other way when wealthy donors and trustees harass fundraising staff is doubtless the money and influence such people wield, critical support that organizations stand to lose in correcting problematic behavior." Illustrating this point, Politico reported that a senior leader at the Humane Society allegedly encouraged a fundraiser to "take one for the team" by sleeping with a donor.⁵ No employee should be asked to tolerate harmful or inappropriate situations "for the good of the organization," and boards should make sure that they are not incentivizing dysfunction by emphasizing metrics such as fundraising performance or staff retention in such a way that it disregards a healthy organizational environment for employees.

Finally, the board's own composition may work against its ability to prevent, detect, and address harassment. Boards are wise to consider how their own composition may create blind spots or vulnerabilities as it relates to addressing sexual harassment and assault. For example, a female victim may be less likely to report a male chief executive's harassment to an all-male board. Or a board may have definitions of what is-or isn't-sexual misconduct that are out of step with current social mores and expectations. For example, the same former Humane Society board member defended Mr. Pacelle's actions to a reporter with the comment, "Which red-blooded male hasn't sexually harassed somebody? Women should be able to take care of themselves."⁶

CONCLUSION

There is no question that it is an abdication of responsibility for a board to ignore allegations or instances of harassment or assault, particularly when the perpetrator is the chief executive. But it is not enough for boards to passively commit the organization to addressing allegations when they arise. Boards need to proactively examine how their organization's own culture may be contributing to an environment where harassment and abuse goes unchecked. And if they don't like what they see, they have a responsibility to do something about it. Thank you.

¹ "It's Time for Nonprofit Boards to Have a Conversation about Sexual Misconduct", Nonprofit Quarterly, February 22, 2018

² "Humane Society CEO resigns after sexual harassment allegations," Washington Post, February 2, 2018

³ Leading with Intent: 2017 National Index of Nonprofit Board Practices, BoardSource

⁴ "Sexual Harassment is Common in the Fundraising World-And Often Goes Unpunished." Inside Philanthropy,

⁵ "Female Employees Allege Culture of Sexual Harassment at Humane Society," Politico, January 30, 2018.

⁶ "Humane Society C.E.O. Resigns Amid Sexual Harassment Allegations," The New York Times, February 2, 2018.