The Last Frontier For Ethics And Compliance Officers: A Q&A With NAVEX Global’s Carrie Penman

Managers and supervisors must be trained to recognize when harassment is happening in the organization, report it, and monitor for retaliation after the fact.


NAVEX Global’s 2018 Hotline Incident Management Report found that there was a significant uptick in harassment-related reports in late 2017, coinciding with the rise of #MeToo. FEI Daily spoke with Carrie Penman, NAVEX Global’s Chief Compliance Officer, about the steps leaders can take to respond to these reports.

FEI Daily: There was a significant uptick in harassment-related reports and 44 percent of reports received were substantiated. What's driving the report volume? 

Carrie Penman: The top reason was more training, and more mature programs. And employees know when and what to report. I also think that employees are feeling more empowered generally. Some of this is a reflection of the mix of demographics. A lot of the millennials are more willing to speak up and say what's on their minds. 

FEI Daily: The numbers show that reports are not being addressed in a timely manner. What’s the message that executives are sending when they have such long case closure times? 

Penman: I think it sends a message that the company is not taking their issues seriously. That can be mitigated, to some extent, by staying in touch with the reporter.

But a lot of the reporters that call in and leave a report may not check back. And so, you may not be able to have the opportunity to communicate with them throughout the process, to give them an update and say, ‘Hey, we received your issue. We're working on it. Two weeks from now, please know we're still working on your issue. We may have a question or two.’

 If you know the name of the reporter, you're able to stay in touch and have a dialogue directly with the employee, especially if there's something that's causing a prolonged investigation to occur. Whether you have witnesses on vacation, or travel is required, or for whatever reason, if time goes by, and if you're not staying in communication with the reporter, then they are likely to believe that you're not taking their issue seriously.

FEI Daily: Why does it take so much time? What are some of the steps that have to be taken and where do the delays happen?

Penman: The median days to close an HR related case in 2017 was 41 days – same as last year. That's a long time for a workplace issue to fester.

I recently co-presented with Scott Nelson of Baker Mckenzie, a prominent labor and employment attorney. This case closure time has been my pet peeve on these presentations for a long time. He felt even more strongly than me. Again, particularly for a workplace issue, to have something like that going on for 41 days - and noting that 41 is a median - that means half the cases are taking longer. There may be a very significant investigation that requires outside council and so on and so forth. But, as Scott pointed out, especially on some of these sexual harassment matters with high-level individuals, you don't have 41 days. You have a couple of days to be able to investigate and take appropriate action. To have an allegation like that in the workplace, and to have that individual exposed to the person who is alleged to have engaged in that misconduct for 41 days or longer, it really puts the organization at risk. 

FEI Daily:  There's a declining rate of reports of retaliation, which on the surface could seem like a positive thing, but tell me why it's actually concerning.

Penman: If you read any of the reports of the numbers and types of cases that are going to external agencies like the EEOC where reporters have raised concerns about retaliation for raising issues, there are far more reports of retaliation that are going external to the organization, and organizations are just not getting the opportunity to address reports of retaliation internally. 

I think that it really lulls leaders into a false sense of security, that there is no retaliation happening in the organization because they're not getting very many reports. In fact, it's very likely happening in the organization. Employees are always going to have some amount of fear of retaliation that requires constant attention to the program.

We were surprised to see a drop because we've had below one percent of the reports ever being those of retaliation, but this dropped back down pretty significantly. What was interesting was that the reports that were received were substantiated at a much higher rate than they have been in the past. If you can say there's some good news associated with it, it's showing that organizations are taking issues of retaliation seriously as we're seeing more of them being substantiated, but employees are just not going to stick their neck out a second time if they felt like they were retaliated for raising the first issue. Why in the world would you raise it again?

I think that's the challenge. There are a lot of organizations that are doing some good things. The most important thing is to train managers and supervisors to recognize when it may be happening in the organization, and to report it. The other is to do some kind of monitoring for retaliation after the fact because as these numbers show, employees aren't going to bring that issue back to us.

FEI Daily: According to the survey, employees who believe they have experienced retaliation are more likely to take this concern outside the organization. What does that mean?

Penman: It could be getting legal advice, it could be going to an agency if what they have reported is protected, the SEC has whistleblower protections from retaliation, so does the EEOC. The FY 2017 EEOC data shows that retaliation was the most frequently filed charge filed with the agency.

Employees are raising retaliation claims in some kind of a reporting outside, whether it be private litigations with their own attorney, or to a regulatory agency. We, the compliance and executive teams, need to tackle this issue of retaliation and address it.

FEI Daily: What are some ways that leaders can start to do that?

Penman: I think the first thing that they should do is, even at a leadership level, engage in a conversation about retaliation. They should ask for reports from the compliance team about allegations of retaliation, just like they ask for numbers on a whole host of things. They really want to be asking for information about those types of cases related to retaliation and how they've been addressed, and have retaliators been disciplined.

Then they really need to take it to the manager supervisor level and train them. Because even some managers could engage in retaliation and may not mean to. A good example would be, you're my manager and I decided to take an issue to HR or to compliance instead of talking to you about it. And you come back to me and you say, ‘Why didn't you come to me with that issue?’ That can be interpreted a number of ways. Often it's the way they say it, but, that message can feel like retaliation. 

The other piece of advice we offer is to put in some kind of monitoring program. If I'm aware that somebody in the organization has raised an issue and I know who they are, then I may decide to track that person for a while. What was the next raise like? Are they getting changes in their assignments? Did they get moved from first to second or third shift? All of a sudden they're not working on key clients anymore. Things like that. Proactively monitoring those reporters who we think could be at risk for retaliation.

Then, finally I would say publicize the fact that retaliators have been caught and disciplined. 

It's a tough issue. I really think this issue is the last great frontier for ethics and compliance officers to get right.