Giving oral evidence to the Sexism in the City Inquiry Peer Helena Morrissey, chair of the Diversity Project (an initiative in the UK investment and savings industry) has warned that there is a "fear factor" in relation to speaking out and that there is internal trepidation over trusting HR departments. Ms Morrissey is calling for a review of how firms deal with complaints of sexual harassment and misogyny. Please see our Legal Update for an outline of the Sexism in the City Inquiry.
What is the "fear factor"?
The "fear factor" is when employees are afraid to come forward to report wrongdoing as they fear the repercussions they will face. They have seen others step up and they know how unfavourable the outcome can be. This isn't to say it happens every time someone steps forward, but research tells us that fear and futility are two of the most common barriers to employees using their voice at work.The sound of silence becomes the cultural norm. Speaking to MPs Ms Morrissey has said that 20 people had come forward to provide evidence and of all the testimonies there was a common theme that there was a nervousness about confidence being broken. Women have weighed up the likely impact of submitting evidence and noted that where women have escalated their experiences, what has happened to them does not encourage disclosure. More often than not, it has had a detrimental effect on their lives both inside and outside of work, due to the nature of the response. Often we see organisations tending to close ranks around the more senior individual and the more junior individual ends up leaving the firm.
An independent investigation
Addressing the Treasury Committee at the start of the Inquiry into Sexism in the City Ms Morrissey has suggested that we might need independent investigations into such allegations going forward. She also called on the Financial Conduct Authority to do more to stamp out sexual harassment in the sector.
Where does psychological safety fit in?
Psychological safety is a key factor in the culture of any organisation and is a critical contributor to a positive and inclusive workplace environment, free from sexism and harassment. Harvard Business School professor Amy Edmondson defines psychological safety as "a shared belief held by members of a team that the team is safe for interpersonal risk taking." According to Edmondson, psychological safety is "a sense of confidence that the team will not embarrass, reject or punish someone for speaking up." Creating a psychologically safe environment where employees can speak up leads to better collaborative behaviours, improved creativity and innovation, and inevitably better productivity. The reality is that the workplace can at times be a stressful environment. Mind has reported that as many as one in six workers experience depression, anxiety or unmanageable stress. Creating an environment of psychological safety can be a real game changer when it comes to managing and improving workplace mental health and resilience.
Workplaces rife with aggressive or defensive behaviour, a blame culture, or bullying and harassment are not psychologically safe spaces. Perhaps not surprisingly, performance drops. Psychological safety consistently scores highest as one of the key predictors of team performance and productivity. In a study at Google, code-named Project Aristotle, psychological safety was found to be critical for success and in turn vital for making the team work. The study took place across hundreds of Google's team with an aim of discovering why some teams succeeded and some struggled. The conclusion of the research found that who was on the team mattered less than how the team worked together. Psychological safety allows a team to thrive and flourish, with high levels of resilience and optimal performance.
The role of leaders in breaking the sound of silence
Leaders play a vital role in creating a psychologically safe space by defining and acting as exemplars of the desired workplace 'climate of voice'. Organisations with leaders demonstrating best practice and challenging the status quo of workplace silence will find the road to psychological safety much easier. Some practical actions include:
- Act as a visible role model. Demonstrable actions from leaders in line with core company values is a vital step towards psychologically safe environments.
- Promote inclusivity and diversity across the organisation. Actively engage with colleagues and work with inclusion and diversity teams to enhance understanding of issues.
- Call out poor behaviour – take a zero tolerance approach to behaviour which falls below standards.
- Ensure workers are appropriately trained on inclusion and diversity policies. This should not be a one off training session, rather an ongoing education on key issues. Leaders should openly support and promote training.
- Practice consultative and supportive leadership – listening to others in a meaningful way is an important skill for leaders as is ensuring support is provided to those who do have the courage to speak up
- Challenge and encourage open dialogue. Psychological safety does not mean colleagues cannot challenge each other and must all simply agree – quite the opposite – psychological safety means that there is a safe space to challenge. Ideas can be explored and innovation triumphs.
- Invite critical feedback and seek out different voices where it is lacking. A key sign of a non inclusive culture is a lack of complaint or challenge
Has there been any improvement in creating a fearless workplace?
It is questionable whether there has been any improvement in creating safe workplaces for people to own and use their voices. Given recent headlines on high profile individuals' poor behaviour, it would appear not. With the focus of the Inquiry being on what progress has been made since the 2018 Treasury Inquiry, it will be interesting to hear the findings. The FCA has responded to the Inquiry with written evidence highlighting:
- The need to remove barriers to women's progression.
- The gender pay gap remains high in the financial services sector.
- The Women in Finance Charter has had a significant positive effect.
- There is a large gap in diversity data across the industry.
Psychological safety is critical to combatting sexual harassment, discrimination and misogyny in the sector. Focusing a spotlight on these issues is undoubtedly a step in the right direction, however there is clearly still a lot of work to do. Firms which are able to lead the way in this area and foster a psychological safe place to work, led from the top, will reap the rewards.
A new duty for employers
The Worker Protection (Amendment of Equality Act 2010) Act 2023 has now received Royal Assent and is due to come into effect in October 2024. The new Act will:
- Introduce a duty on employers to take reasonable steps (previously the wording said "all reasonable steps") to prevent sexual harassment of their employees.
- Give employment tribunals a new power to uplift compensation in sexual harassment cases by up to 25% where an employer is found to have breached the duty to prevent sexual harassment.
The Act demonstrates that sexual harassment is very much in the spotlight - workplaces with a culture of sexual harassment will have nowhere to hide.
We can expect the Equality and Human Rights Commission's Technical Guidance to be updated to reflect the new duty. The government has also previously stated that a code of practice will be developed providing further guidance for employers.
