Workplaces audit finances and security. Why not culture?

Even with a large number of workers remote due to COVID-19, new allegations of toxic workplaces are alive and well. The Washington Football Team, entertainment magazine Essence and entertainment website Refinery29 are just some of the latest companies to take the now-familiar step of hiring outside law firms to review company policies amid accusations of mistreatment and abuse.

But what exactly does it mean when a law firm is brought in to investigate specific accusations? And is a law firm called in only once a transgression has happened?

In the case of a workplace investigation triggered by a complaint that falls under U.S. Equal Employment Opportunity Commission rules, the employer defines the scope of an outside law firm’s audit or assessment, said Sue Ann Van Dermyden, a founding and senior partner at the law firm of Van Dermyden Maddux in Sacramento, CA, and a past president and founding member of the Association of Workplace Investigators.

Workplace audits are also routine to make sure payroll practices are up to date — that pay stubs reflect the current address, that employees are correctly classified, for example, said Vida Thomas, a partner at the Law Offices of Amy Oppenheimer in Berkeley, CA.

But businesses have engaged law firms to ensure there are no disparities in pay and disciplinary actions for employees and that hiring practices bring in an array of diverse job candidates, Thomas said.

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A 2016 paper from The Institute of Internal Auditor says a lax workplace culture is one wherein corporate misdeeds and misconduct can fester.

“Unethical behavior ultimately puts an organization at risk and can indeed be placed at the heart of many organization failures,” according to the paper. “Anything that is so critical to an organization’s success should be examined thoroughly and consistently.”

Even regulators like the Financial Industry Regulatory Authority take into account workplace cultures, asking how financial firms communicate, reinforce, monitor and evaluate organizational values like toleration of policy breaches and whether managers are role models, according to a paper from the MIS Training Institute, which calls itself an industry leader in audit, IT audit and information security training.

Usually businesses are motivated to bring outside attention to companywide policies due to a specific incident or a news event in their industry. But nationwide reckonings like the #MeToo movement and George Floyd protests might prompt more requests for companywide policy and culture audits, Thomas said.

“Given the events going on in our country, we may see an increase,” she said.

Her firm, however, has not seen an increase in such requests. Larger businesses usually prefer to conduct such audits in house through their human resources or employee resources divisions, she said.

Getting a pulse on overall employee morale is done through climate assessments, culture surveys and other similarly named instruments, said Van Dermyden, whose firm has also not seen an increase in workplace culture assessment requests.

Human resources consultants and other outside groups can conduct such assessments for less money than a law firm, but the added benefit of a law firm is attorney-client privilege surrounding the assessment results.

Having an outside assessment can also provide the employees with anonymity, unless a specific accusation is made about harassment, discrimination or retaliation where the employer is mandated to conduct an investigation.

Climate assessments can vary in presentation, but Van Dermyden has found electronic surveys of 15 questions or less effective in her experience. Questions might ask employees about the effectiveness of their supervisors or whether company retaliation policies are enforced (or whether they’ve even read the policy).

Her firm has also created regularly monitored anonymous hotlines for employees to report complaints.

Surveys can finish as quickly as three weeks, Van Dermyden said. The time and cost for companywide audits increase the more complex the review, whether it involves company policies or interviewing employees.

Thomas said businesses can save money by gathering up data beforehand and narrowing down the issues it wants solved by an outside audit.

Van Dermyden also said employees who participate in a third-party survey will watch for improvements in the workplace. It is helpful if leaders are transparent about the process, the results and future actions.

“Make meaningful and visible changes at the back end of a climate assessment,” she said. “When participating employees see nothing occur, they can lose faith in management and question the point of the survey.”