The Role of a Company Secretary in Crisis Management: An alleged Sexual Harassment in a workplace.
On Tuesday, January 24th, 2023, social media was buzzing with news of a sexual harassment case filed in the High Court of Ghana. According to the Complaint, a married man who is also a Chief Financial Officer (CFO), of a bank in Ghana (the Bank/Company) entered a “parlor relationship” with an ex-junior staff (the lady) who at the time, was doing her national service at the bank.Per the Statement of Claim, the lady essentially yielded to the relationship with the CFO because of his persistence and certain promises made to her by the CFO. Thus, she consequently did not apply for a possible employment in the bank at the end of her national service period; something, she would have otherwise done. Overtime, the “parlor relationship” between the CFO and the Lady turned sour and the CFO reneged on some of his promises. The lady is now suing the CFO to make good on his outstanding promises. The Bank was also a named Defendant
The case being in the courts, this piece does not intend to speak to the merit. The following paragraphs however seek to discuss a number roles of a Company Secretary (Head of Legal) in such crisis situations.
First by convening a meeting with Management: The Company Secretary must at the requisition of the CEO convene a management meeting to discuss the matter at hand. At the meeting, the Company Secretary must advise management on the case and the legal steps the company must take to forestall any further crisis.
The Company Secretary must also advise on the relevant labour laws of Ghana, the Company’s employee policy guidelines on sexual harassment, rules and conditions of service and on the internal process for investigating an accused employee and if found guilty on the procedures for discipline. The advice must also be in cognizance laws of natural justice[1] and the contract of employment. In the heat of the moment, one may consider that a summary dismissal of the CFO may be plausible for the Bank’s image, but a wrongful termination may lead to further legal suits against the Bank which can be avoided by apt legal advice given by the Company Secretary.
Next is a possible emergency general meeting of the Board[2]: With the consent of the Board Chairman and at least one-third of the board members an emergency board meeting may be convened by the Company Secretary. Thus, the Company Secretary must immediately put together an agenda for the meeting. A copy of the Complaint must be attached to the circulated agenda. At the board meeting, the Company Secretary must advice the Board on the legal risks arising from the suit, the risk appetite of the Company and ensure the company effectively prepare for the emanating threats. After the meeting, the Company Secretary must ensure all decisions made by the Board are properly carried through. For instance, if the Board decides that Company should communicate with internal and external stake holders, the Company Secretary must ensure the communiqué is not in contempt of court or does not compromise the company’s position with regards to the suit.
Complying with court timelines. The Company Secretary must ensure that the Company, throughout the suit, files the requisite documents in time and proper manner. For instance, the Company Secretary must ensure an appearance is entered on behalf of the Company within eight days[3] from the date the writ was served. This may be filed by external solicitors if applicable, thus the Company Secretary must correspond with the external solicitors to ensure compliance.
Also, the Company Secretary must ensure that the Company responds to the complaint by filing a Statement of Defense in time. Thus, if the Bank has external solicitors the Company Secretary must immediately confer with the external solicitors about the Statement of Defense and instruct the external solicitors to proceed. The Company Secretary must ensure that a draft of the Statement of Defense is reviewed by his/her office before filing (if to be filed by external solicitors) and same must be filed within fourteen days after the time limited for appearance[4].
Training/Retraining: The Company Secretary can seize this opportunity to conduct training or retraining sessions for the staff on the relevant labour laws[5] and company policies. Sessions may be conducted in consultation with Head of Human Resources, for the executive, managers, and all workers on the laws regarding sexual harassment and employee rights when harassed as well as educate on the channels of communication in the company and the protections put in place to prevent victimization of victims who report.
Review of Company Policies: The Company Secretary must review the company policies on sexual harassment[6], undue influence, “(parlor)" relationship between and amongst employees, employee risks of personal injury or damage to health from work place, and make recommendations to management or Board/Board Committees. The Secretary must also make policy recommendations on ways to make the Company more responsive to alleged complaints of employee injury or harassments and measures to stop any perpetrators.
Transition Planning: The Company Secretary must also consider the possibility of transition(succession) and plan for same. Where accusations are alleged, there is a possibility that the office of the CFO may be vacant by termination or resignation. The Company Secretary must therefore be prepared to recommend on the proper procedure for succession. The recommendation must be in consultation with other managers such as the Head of Human Resources.
Conclusion:
The Company Secretary as a member of the management of a company must be a forward thinking problem solver and the guardian of company legal terrain. Thus, where the Company is accused of having a brush with the law, the Company Secretary must act as the lifeguard and save the Company from drowning in such deep and murky waters. Some of the ways in achieving this, are, as discussed above, by proper legal counsel, compliance with the labour laws of Ghana and the company policies, and working with other executives to plan for any possible succession.
It must be noted that the writer premised this article on the assumption that the Company Secretary doubles in the role as the Chief Legal officer or Head of Legal of a Company, this may however vary.This article is not intended to constitute a legal advice on a specific case. As such, it is advisable to seek the advice of an attorney regarding questions on specific cases.
Foot notes
[1] See, George Akpass vrs. Ghana Commercial Bank Ltd. Civil Appeal No. J4/08/2021 16th June, 2021, Unreported; Aboagye v. Ghana Commercial Bank [2001-2002] SCGLR 797 per Bamford-Addo, JSC "; Annamuthodo v. Oil Field Workers Trade Union [1961] AC 945 per Lord Denning "If a domestic tribunal fails to act in accordance with natural justice, the person affected by their decision can seek redress in the courts".
[2] Section 356(2) of the Companies Act, Act 992
[3] Order 9, High Court (Civil Procedure) Rules of Ghana, 2004, CI. 47
[4] Order 11 rule 2, C.I. 47
[5] Section 9 of the Labour Act, 2003, Act 651 provides on the duties of an employer; and sections 10 and 11 on the rights and duties of the worker;
[6] Under section 175 of Act 651, sexual harassment is “any unwelcome, offensive or importunate sexual advances or request made by an employer or a superior officer, or a co-worker, whether the worker is a man or woman.”
