The Ethics Dividend

It’s time for businesses to rethink the NDA

In their focus on self-preservation and profit, I wonder how far businesses recognise the human cost of putting reputation management before humanity. Maybe, for some, a re-set is required in order to reap the ethics-dividend rewards. 

Of course, businesses have a right to protect their intellectual property and keep private the commercially sensitive areas on which their competitive success depends. To this end, non-disclosure agreements (NDAs) play a legitimate and vital role.

But increasingly, the light is being shone on the misuse of NDAs by organisations and powerful individuals to conceal wrongdoing and silence the victims of workplace misconduct. It is a dark, dark area which CEOs, HR leaders and legal teams across business need to address. And it requires a complete mindset change.

Weaponised and harrowing

Listen to the harrowing accounts of victims in high-profile cases like those involving Harvey Weinstein, Sean Combs or Harrods, and that human cost quickly gets exposed. NDAs, initially designed to protect commercially sensitive information, have been weaponised to cover up acts of sexual harassment, racial discrimination and other criminal behaviours by those with power.

Victims – the individuals gagged by NDAs from speaking their truths about sexual misconduct - will tell you: it was not one man’s perversion that destroyed them, it was the system which is complicit in enabling rich and powerful men to buy both the law and ‘justice’.

Shedding the NDA comfort blanket

When faced with accusations of inappropriate or illegal conduct, businesses need not reach immediately for the comfort blanket of the NDA shield. They need first to ensure that their mission includes a commitment to real justice, fairness and the highest ethical standards.  That needs to come from the very top of an organisation, and to filter through to every level. Those robust internal policies will foster the ethical work environment within which healthy organisations thrive and the likelihood of harmful misconduct ever arising recedes.

Their legal teams need to keep abreast of the legislation which renders NDAs unenforceable when concealing activities that are illegal – and it goes without saying that rape and sexual harassment are.

HR departments need to ensure that the process of mediation and arbitration works genuinely to address grievances and doesn’t serve merely to protect the wrongdoer and silence the victim in the misguidedly perceived interests of the organisation.

The focus needs to be on the care and wellbeing of the wronged, not on protecting the reputation of the wrongdoer, however powerful and important they may be.

For some organisations, it may require a sea-change in thinking.  But the brave step of putting ethical conduct ahead of immediate reputation protection in the face of reported wrongdoing, will always ultimately pay dividends.  And paying dividends is, let’s face it, what business is all about.