The Case: Assume you are the CEO of Banquo Education, an 80 million dollar for-profit, education solutions firm that helps traditional schools and universities launch online education projects. It's Friday night and your VP of Human Resources, your Chief Legal Counsel, and VP for Academic Programs have just come to your office. They have laid out on your desk the following disturbing scenario that has not been brought to your attention before:
Over the past nine months, your VP of International Partnerships has apparently been stalking his Assistant VP for Contracts. The situation began with private dinner invitations on international business trips and subtle invitations to visit his hotel room for drinks "to plot strategies for next day meetings." Eventually these invitations resulted in overt sexual advances that were rebuffed. The alleged victim then reported these unwanted advances to the HR Office. The VP of Human Resources contacted the VP of International Partnerships to discuss the situation; he warned the VP of International Partnerships that his behavior was in violation of your company's Ethics Code and Corporate Sexual Harassment Policy . The VP of International Partnerships responded that he intended no harassment; that he "mistook" behavior from his VP of Contracts to be "affectionate;" and that he would apologize and make no further advances.
This intervention appeared to work for nearly two months. Unfortunately the offensive behavior began again, only at a more intrusive level. The Assistant VP for Contracts began receiving suggestive e-mail and phone calls from the VP of International Partnerships. These came in while she was traveling and even at home. The communications contained expressions of affection, followed by clear advances for intimate relations. Increasingly the VP for Contracts found herself given assignments or trips where the VP of International Partnerships would be present. She has now returned to the VP of Human Resources and asked to be reassigned to another unit; she is currently under medical supervision for high stress.
The VP for Human Resources and Chief Legal Council have conducted a quiet investigation to confirm these new allegations. They and their staff interviewed witnesses, examined company e-mail, phone, and travel records. All of these confirm the allegations made by the Assistant VP for Contracts, including copies of actual, suggestive e-mail from the VP of International Partnerships.
You have seen many things in a lifetime of business and education enterprises, but not this. This information could not have come at a worse time. The VP of International Partnerships has been one or your most successful and dependable executives. He is right in the middle of a 20 million dollar, multi-year distance education contract negotiation with a large South Korean public school system. This deal will be a real coup for your company if you can pull this one off. The on-going negotiations are only several weeks away from being concluded. In addition, you know this man to have had a highly successful career; he is only three years away from retirement, a family man, though recently under-going a sad break-up with his spouse.
To make matters worse, the three grim-faced executives sitting with you do not agree on a solution:
Your VP of Academic Programs feels strongly you should immediately transfer the Assistant VP for Contracts to another unit to assure she is safe. She advises you to then call in the VP of International Partnerships; give him a verbal warning; follow that with a written one that will be placed in his personnel jacket. The warning must state that any more contact or unacceptable behavior toward the Assistant VP for Contracts will result in termination. Hopefully this will put an end to the problem and allow the critical contract negotiations with the Koreans to go to successful fruition.
Your Chief Legal Counsel advises a different course. She urges you ask the VP for International Partnerships to resign immediately. She suggests you give him a one year separation package. The latter will discourage potential legal action or negative publicity from the VP of International Partnerships.
Your VP for Human Resources argues for terminating the VP of International Partnerships immediately, but with no separation package. He feels a separation package in this case would communicate the wrong message--a reward for offensive behavior if leaked out. He feels the risk of a leak is high; even worse it may get to the press.
You are stunned. You have given yourself a night to sleep on the issues in this case before you get together with your team to decide what to do. You want to do the "right" thing, but what is it? You have a responsibility to the share holders for the company to succeed; you have a responsibility to the employees for the company to stay healthy financially and avoid downturns and layoffs. You have a responsibility to employees to ensure they work in a healthy environment free from intimidation. Perhaps even you have a responsibility to a longtime, loyal employee who may be ill or going through a personal crisis.
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My response
Ethics play a crucial role in the effectiveness of a leader. According to Rhode (2006), “The essence of effective leadership is ethical leadership. Leadership cannot be successful without being moral” (as cited in Oswald, 2019, p. 118). In the case study, the leadership team encounters an ethical dilemma of sexual harassment which persists despite verbal reprimands. As a result, an employee’s health and well-being is now at stake.
The question is what disciplinary measure should be taken to curb the issue. Well, the company’s policy should help guide the disciplinary process. Adhering to the disciplinary policy can help prevent wrongful termination lawsuits. Other measures would include documenting the case ensuring that there’s evidence on file. Also, since he has only been given a verbal reprimand, he will now be served a written warning which will be added to his file. The warning will state that he is prohibited from contacting the employee and that he is required to attend counseling sessions as well as complete sexual harassment prevention training. He will be required to provide proof of attendance and completion of these requirements which will be added to his file.
Finally, his written warning will indicate that if his behavior continues, then the company will resort to taking other appropriate disciplinary actions, the first being suspension without pay and the last resort being termination. The employee’s reassignment request will also be granted. To reiterate, everything will be documented and placed in their files. So, the case, evidence, warnings, reassignments, and disciplinary actions taken will be documented.
Attorney and the founder of the Johnston Business Law Group in Frederick, Mathew Johnston noted that “without a doubt this type of matter demands a minimum a written warning and counseling statement. Nothing verbal in this type of case and remember, document, document, document”. He also provided other appropriate measures like formal apologies, counseling, training, suspension, reassignment, and termination. Generally, his legal advice on cases like these is to consider using other disciplinary measures prior to termination depending on the nature of the case. As such, I think it is fitting that a written warning and documentation be administered first before termination is considered.
The measures taken to address this ethical issue should illustrate the effectiveness of the team's leadership as it was highlighted in the readings that the commitment to ethics and effective leadership go hand in hand.
Krista
MDE student
University of Maryland Global Campus
University of Maryland Global Campus | UMGC
References
Johnston, M. (2022, August 16). After the sexual harassment investigation, discipline? Law Offices of Matthew Johnston. https://johnston-legal.com/2017/01/30/after-the-sexual-harassment-investigation-discipline/
Oswald A. J. and Mascarenhas, S.J. (2019). The Ethics of Corporate Ethical and Moral Charismatic Leadership. Corporate Ethics for Turbulent Markets (Corporate Ethics for Turbulent Markets). Emerald Publishing Limited, pp. 113-149. https://www.emerald.com/insight/content/doi/10.1108/978-1-78756-191-520191005/full/pdf?title=the-ethics-of-corporate-ethical-and-moral-charismatic-leadership