Your best-performing executive may also be your biggest people risk. The numbers are excellent. Targets are being met. The business is growing. But people keep leaving the executive's team. HR receives informal concerns about leadership style. Employees say they do not feel comfortable speaking up. There is no formal complaint. No investigation. No established misconduct. So when should the board become concerned?
Not every workplace issue belongs in the boardroom. Boards cannot - and should not - know about every conflict, complaint or difficult manager.
But they do need to know when individual signals start to form a pattern.
High turnover. Absenteeism. Exit interviews. Informal complaints. Poor engagement scores. Employees who no longer speak up.
None of these necessarily proves misconduct.
Together, however, they may tell you something important about leadership, culture and risk.
The governance question is therefore not simply:
“Do we have a problem?”
It is:
“Do we have the right information to know whether we have a problem?”
Imagine HR has received three informal concerns about the same executive over two years. Two employees have left the team. The latest employee survey shows a significant difference between this team and the rest of the organisation.
Each signal may have been dealt with appropriately.
But who sees the combination?
This is where a workplace issue can become a governance issue.
The board does not need every detail. But it does need an information structure that enables it to identify significant patterns and risks.
That means looking beyond the number of formal complaints.
What is happening with turnover? What are people saying in exit interviews? Are concerns repeatedly linked to the same leader or business unit? Do employees feel safe to challenge management? Are issues actually resolved, or do similar concerns keep returning?
For international organisations, there is an additional challenge.
A company may have one global code of conduct and one speak-up policy, but that does not mean concerns travel through the organisation in the same way everywhere.
Employees in one country may readily approach HR. Elsewhere, challenging a senior manager may be much less common.
One local HR team may register informal concerns. Another may only report formal complaints.
As a result, low reporting numbers do not necessarily mean there are few problems.
The board therefore needs to understand not only what is being reported, but also what may not be reaching the boardroom.
This becomes particularly important when concerns involve senior leadership.
Who should HR inform? Who decides whether an investigation is needed? Who instructs the investigator? Who receives the findings? When should the supervisory board become involved?
And in an international organisation, local employment law may affect how an investigation, suspension or other intervention can be handled.
The governance question may be global.
The legal response is often local.
These responsibilities are much easier to define before a serious case arises than in the middle of a crisis.
Not every complaint should reach the board. And not every signal means something is wrong.
But recurring signals about leadership, behaviour and culture should not disappear simply because no single incident seems serious enough to escalate.
The board does not need to know everything that happens in the workplace.
It needs to know whether the right information reaches the right level at the right time.
Because people risk is not just an HR issue.
It belongs on the governance agenda.
If you have any questions, please feel free to contact Renée Huijsmans-Zwijnenburg | Partner, Employment Law | People, Culture & Governance.
Would you like to receive a monthly overview of our latest legal updates and blog articles? Subscribe to our newsletter.
