March 4, 2020
Yesterday, the financial publication American Banker put out an article discussing the rising number of investors and asset management firms requesting more transparency from companies they are shareholders of, including big banks Wells Fargo and JPMorgan Chase. Specifically, the article highlighted investor resolutions requesting the end of mandatory arbitration in cases of sexual harassment. The resolutions have come out of the desire for both more socially and morally responsible practices, but also because those practices affect profitability and operations as well.
Interviewed as a legal expert having represented many employees and employers in various workplace disputes and sexual harassment cases, RPJ Partner Nicole Page was quoted hitting the point home. “When you have a company with pervasive sexual harassment and you’re driving women out, that’s bad for the bottom line,” she said.
Page called attention to the finding from a study published by McKinsey in 2018 that companies that have the most gender diversity in their executive leadership of their peers have a 21 percent higher probability of out-performing those peer companies who do not have such diversity.
As the trend of requesting transparency emerges further, we have seen companies like Google and Facebook end forced arbitration in cases of sexual harassment and discrimination. The big banks, however, have avoided it up to this point, as shareholder resolutions on the issue that were filed with Wells Fargo and JPMorgan Chase have since been withdrawn.
Read the full article in American Banker here: “Challenges to banks’ use of arbitration a sign of gender fights to come”