The ‘Culture’ Series: What are other regulators doing?

For my second post as part of the Culture Series, I focus on what other regulators are doing to address culture and, in particular, harassment in the workplace. Whilst I’m pleased that the financial regulator in the UK has started to think about this issue, we need other regulators to follow the same approach in order to ensure a societal level change.

The FCA is focusing on culture and wants culture to be an important and crucial part of leadership and strategy in the same way that risk management is for businesses. But we are yet to truly understand what its expectations are and whether it will play the role of enforcer, or supervisor.

In my previous post in the Culture Series, I looked at the FCA’s approach to how it is focusing on sexual harassment in the workplace. It’s clear that the financial industry regulator needs to apply a lot more thought to when it expects its regulated firms to take action in relation to alleged acts of harassment (sexual or otherwise). It needs to communicate its expectations and be prepared to adapt for the ‘unknowns’.  I, personally, look forward to some more clarity and detail on this.

The second piece I wanted to question is a bit trickier but I think of equal, if not more, importance in ensuring a societal level change to culture throughout industries.  We cannot have one regulator refusing to approve people while another shows no interest in the subject - that would be absurd and sending a very strange message.  Imagine the situation if the General Medical Council said sexual harassment had no role in its approval assessment, while a banker would never work again if he s/he was found to have perpetrated an act of harassment.

In early 2018, the Women and Equalities Committee (WEC) wrote to a number of UK regulatory bodies asking them to explain what they were doing to tackle workplace sexual harassment. The WEC’s subsequent report published in July 2018 found that sexual harassment was commonplace in the workplace and called for regulators to take a more active role in eradicating it.

The WEC stated:

“...we find the passivity and indifference of regulators in the face of widespread workplace sexual harassment to be not only surprising, but gravely irresponsible.”

In its report, the WEC called for the Government to require regulators to put in place action plans setting out what they will do to address the issue of sexual harassment in the workplace in their sectors, including what enforcement action they would take and what sanctions will apply.

I have looked at a number of other regulators to see what their positions are and here you go:

  • The Solicitors Regulation Authority (SRA): Starting first with the SRA. The SRA is focusing on regulating firms’ management of harassment in the workplace and culture. In September 2018, they responded to the WEC’s report and noted that they are committed to tackling sexual harassment in the workplace. The SRA has identified an inconsistency about firms’ approach to when potential serious concerns should be reported to them and are launching a consultation on this, with subsequent changes to be reflected in its code of conduct, as well as making its expectations to the industry clear.  The SRA is also working with the Equality and Human Rights Commission (EHRC) and other legal regulators to find appropriate ways to promote awareness and encourage good practice within law firms.
  • The General Medical Council (GMC): In a letter to the WEC in September 2018, the GMC acknowledged that workplace sexual harassment is “completely unacceptable” and “every effort must be made to eradicate it”. The GMC confirms that it will continue to take action where they find a doctor has behaved unacceptably in this way, and whilst its regulatory role extends to individual practitioners and not employers, they are nevertheless working with other regulators, such as the Care Quality Commission (CQC) who oversee employers and collectively placing a “clear focus on improving workplace environments and culture across the UK health system”.
  • The CQC: Very recently, the BBC reported about allegations of a culture of bullying and harassment and defensiveness from the executive team at a regional hospital trust, leading to an investigation by the CQC. This shows that the regulator will step in to investigate such matters, which might ultimately impact a trust’s rating by the regulator.
  • The Charity Commission: In 2018 we saw various stories and revelations around sexual exploitation, harassment and poor working culture in the charity sector, which required the Charity Commission to investigate. Earlier this year, the Charity Commission acknowledged that there had been an impact on public trust in charities from recent revelations and a priority focus for the regulator would be looking at leadership, culture and values, along with responsibility, reporting, accountability and transparency. The regulator has announced several safeguarding methods against sexual abuse and harassment and has reported that charities should operate less like businesses and change their cultures.
  • Education: I have seen little guidance from regulators in the education sector regarding culture and tackling harassment in the workplace. Whilst Ofsted have focused on dealing with sexual harassment in schools, they are yet to opine or give real guidance on the issue of workplace harassment and culture and employers’ duties in this regard.
  • The Health & Safety Executive (HSE): The HSE told the WEC that it does not see tackling or investigating sexual harassment in the workplace as part of its remit; there is no specific duty under health and safety legislation regarding sexual harassment and the law in this area is for the EHRC and the police to enforce, as sexual harassment is not considered to be a safety at work issue. The WEC took issue with this in their July 2018 report and were “deeply concerned” by the HSE’s analysis as they believe this is a health and safety issue and the HSE in particular must take up its “share of the burden of holding employers to account if they fail to take reasonable steps to protect workers from sexual harassment”.
  • The CBI: The Confederation of British Industry is, expectedly, alive to the issue of culture and tacking harassment in the workplace. The CBI’s Director-General says that committed leadership is needed to ensure the workplace is free from sexual harassment.
"Establishing a supportive culture and effective process across all business is a priority for the CBI and our members. The CBI will bring together large and small firms to support change, building on and sharing existing practice to prevent harassment across all workplaces. This must be a turning point across society."
  • Other sectors: Rather surprisingly, I have seen little guidance or opinions from regulators on the issue of workplace culture from regulators in other sectors, such as environment and oil and gas. However, the Security Industry Authority recently released a publication dedicated to tackling sexual harassment in the night time economy.

Culture encompasses many aspects and tackling harassment (of any kind) in the workplace is just one factor to enable a healthy workplace culture.  Perhaps the FCA is an obvious regulator to be thinking about this issue, given the economic crash a decade ago was an example of what can happen when organisations no longer focus on their culture.

However, we need other regulators to step up and start focusing on this issue and letting organisations know what their expectations are, in order to ensure a societal change throughout industries. I expect that all regulators would say that it is important for organisations and businesses to have healthy a workplace culture and adopt a zero-tolerance approach to harassment (of any kind) in the workplace; however, further guidance is needed from many of these regulators to set out what their expectations are and whether they will play the role of enforcer or supervisor.  I expect (and hope) that understanding how to regulate organisations’ culture will be a new year’s resolution for most regulators in 2019.

Stay tuned for my next post in the Culture Series.