In the wake of sexual harassment and assault scandals in a wide range of industries, corporate boards are increasing scrutiny of CEO hires and changing contracts to include strong language around sexual misconduct, according to a Wall Street Journal report.
Corporate boards are taking the stance they would fire CEOs if sexual misconduct allegations came to light, even if the behavior in question occurred before their current employment. Additionally, boards are expanding reference checks and expecting CEO candidates to offer more information about themselves.
"Reputation management is becoming an increasingly important component of the valuation of a business," said Brent Saunders, chief executive of Allergan, according to WSJ.
Boards that previously required background investigations and psychological assessments for CEO candidates may begin to go further. Development Dimensions International, a human resources consultancy firm, told WSJ previously psychological assessments focused on leadership traits, but DDI is now being asked to note any sign of prior offensive behavior.
Other tactics board directors are employing for CEO searches include vetting via social media. A director at a software company told WSJ they hired a new executive after first ensuring they did not find any negative comments on social media about the candidate.
The corporate landscape post the #MeToo movement is also focused on ridding itself of toxic workplace cultures that may have been left behind from prior executives. The movement spread in October as women took to social media to speak out about sexual harassment they had faced using the two-word hashtag. The movement was spurred by serious sexual harassment and assault allegations made against media mogul Harvey Weinstein, who has since been dismissed from the company he co-founded.
Thus, boards are also actively looking for CEO candidates who can help turn a toxic culture around and ensure a safe and equitable working environment for all, the WSJ notes.