Recent revelations from a major ASX-listed retail company regarding alleged serious misconduct – including claims of workplace intoxication, gambling with staff, bribery, bullying, sexual harassment, and product tampering that allegedly went on “for some years” without board knowledge – expose fundamental weaknesses in corporate governance systems.
The chairman’s admission that leadership was “appalled that this was going on for some years and I never knew about it” raises critical questions about board oversight and the mechanisms in place to surface workplace misconduct before it becomes entrenched.
Board Members: Your Legal and Ethical Obligations
This case serves as a stark reminder that board members have both legal duties and moral imperatives when it comes to workplace governance:
Legal Duties Under the Corporations Act:
- Duty of care and diligence (s180)
- Acting in good faith and in the company’s best interests (s181)
- Ensuring proper risk management systems are in place
- Maintaining oversight of corporate culture and conduct
ASX Corporate Governance Principles require:
- Establishing appropriate risk management frameworks
- Instilling a culture of acting lawfully, ethically and responsibly
- Having processes to identify and manage material risks including conduct risks
- Regular reporting on material risks to the board
The Silent Crisis: Why Traditional Reporting Failed
This recent case demonstrates how traditional reporting mechanisms can catastrophically fail. Despite having HR departments, management structures, and formal policies, serious misconduct allegedly persisted for years without reaching board level.
This failure typically occurs because:
- Power imbalances prevent junior staff from reporting senior executives
- Fear of retaliation keeps witnesses silent
- Cultural toxicity normalizes inappropriate behaviour
- Management interference with HR processes (as allegedly occurred in this case)
- Limited escalation pathways that bypass compromised management
Anonymous Reporting: The Board’s Essential Safety Net
Anonymous reporting platforms aren’t just compliance tools – they’re critical governance infrastructure that enable boards to fulfill their oversight duties. They provide:
Early Warning Systems: Issues surface before they become entrenched cultural problems or regulatory violations.
Unfiltered Intelligence: Information reaches decision-makers without management filtering or interference.
Legal Protection: Demonstrates proactive risk management and due diligence, providing legal defensibility.
Cultural Change: Creates psychological safety that transforms workplace dynamics.
Pattern Recognition: Multiple anonymous reports can reveal systemic issues invisible through traditional channels.
Stakeholder Protection: Safeguards employees, customers, shareholders, and the organisation’s reputation.
The Cost of Inaction
This recent case illustrates the consequences of inadequate reporting systems:
- Financial Impact: Significant executive remuneration clawbacks and legal costs
- Reputation Damage: Public controversy overshadowing business results
- Leadership Instability: Key positions left vacant during investigations
- Investor Confidence: Market uncertainty affecting share performance
- Regulatory Risk: Potential investigations and compliance issues
Board Action Required
Every board should immediately assess:
- Current Reporting Infrastructure: Do anonymous, secure reporting channels exist?
- Cultural Health: Are there early warning systems for toxic behaviour?
- Management Oversight: Can executives interfere with or suppress reports?
- Board Intelligence: Do directors receive unfiltered information about workplace conduct?
- Risk Management: Are conduct risks being properly identified and managed?
The Technology Solution
Modern anonymous reporting platforms like Safe2Say provide boards with:
- Secure, anonymous reporting channels that bypass compromised internal systems
- Pattern analysis that identifies systemic issues across departments or locations
- Legal compliance with whistleblower protection requirements
- Audit trails demonstrating proactive governance efforts
Beyond Compliance: Creating Genuine Accountability
The goal isn’t just avoiding the next corporate scandal – it’s creating organisations where misconduct cannot take root. This requires:
- Board-level commitment to transparent, accessible reporting
- Cultural leadership that welcomes difficult conversations
- Systematic follow-up on all reported concerns
- Regular assessment of reporting system effectiveness
- Continuous improvement based on feedback and outcomes
The Bottom Line
When a chairman admits being unaware of serious misconduct occurring “for some years,” it represents a governance failure that could have been prevented with proper reporting systems.
Boards cannot fulfill their legal and ethical obligations without reliable intelligence about workplace conduct. Anonymous reporting isn’t optional – it’s essential infrastructure for responsible governance.
The question every board must answer: What don’t we know about our organisation’s culture, and what systems do we have in place to find out? What is that gold nugget of information we aren’t getting?
The stakes are too high, and the solutions too readily available, for any board to remain in the dark about workplace conduct. The time for action is now.