Praise for fast QBE action as CEO Pat Regan exits

The top end of town clings stubbornly to the view that the real problem is “a few bad eggs”.

No one is ever going to die wondering what QBE chairman Mike Wilkins thinks, a colleague who knows him well says.

It’s not that he’s loud and bombastic; quite the opposite, in fact.

It’s more that Wilkins, in his quiet and considered way, has an underlying clarity of purpose, in contrast to others who get distracted by ambiguity and shades of grey.

Late last month the QBE board received a complaint from a female employee in the US about “inappropriate” workplace communications with chief executive Pat Regan. The board’s response was swift and clear-eyed.

An external law firm was briefed, and a week later directors were scrolling through the firm’s comprehensive report on Regan’s behaviour.

Within 48 hours, the CEO was sacked.

Wilkins said QBE was “committed to having a respectful and inclusive environment for everyone” at the company.

“The board concluded that (Regan) had exercised poor judgment in this regard,” he said.

Mike Wilkins. Picture: AAP

Inevitably, comparisons have been made with the tortuous way AMP has handled the sexual harassment complaint against Boe Pahari by a female subordinate, Julia Szlakowski.

The AMP board tied itself in knots, imposing a $500,000 penalty on Pahari after an independent QC found he had committed a “relatively modest breach” of the company’s code of conduct in 2017.

But it then took the extraordinary step of promoting him to lead AMP Capital.

A round of boardroom bloodletting followed, with the resignations of chairman David Murray and non-executive director John Fraser, and the demotion of Pahari to his original position.

AMP’s efforts must surely rank as one of the more cack-handed attempts at resolving a serious case of workplace harassment in this country — never mind the core finding by London barrister Andrew Burns QC that Pahari’s breach was only a modest one.

Yes, the case of AMP and Pahari is more complicated than the Regan incident, with some of the evidence contested, in contrast to the digital trail apparently left by the QBE boss.

AMP was also exposed to some “key person risk” with Pahari because his departure could have invoked clauses in funds management contracts enabling investors to withdraw their money.

But the point is that AMP’s key person risk has been completely overwhelmed by its far broader culture and conduct risk, exemplified in the loss of another chairman (in addition to predecessor Catherine Brenner) and the turmoil that ensued.

In the meantime, the AMP career of Szlakowski, who lodged a detailed, seven-page complaint against Pahari, has come to a crashing halt.

AMP has maintained it treated Szlakowski’s complaint seriously and conducted an external investigation.

Burns, it said, found that many of the claims against Pahari were “not substantiated”, but appropriate consequences were applied when AMP’s code of conduct was found to have been breached.

The point is that the kind of workplace injustice suffered by Szlakowski, through no fault of her own, has to stop.

A ‘few bad eggs’

Sadly, a senior lawyer who practices in this area told Four Pillars on Tuesday that there is absolutely no sign of any downward trend in sexual harassment in the workplace, despite a lather of publicity about the behaviour of former High Court judge Dyson Heydon, AMP’s Pahari and now QBE’s Regan.

The top end of town, she says, clings stubbornly to the view that the real problem is “a few bad eggs”.

“Directors and executives say to me they’re shocked and surprised when it happens, but the fact is I get two to three calls a week about sexual harassment at a very serious level, and by that I mean physical or prolonged contact, or multiple complainants.”

The calls get more frequent and “panicky” in November and December if something “goes wrong” at a Christmas party.

Before COVID-19, a big part of the lawyer’s practice was to visit workplaces to educate companies about putting in place the processes and culture to combat sexual harassment.

She says there are three critical factors for companies to get right if they’re to have any meaningful impact on persistently high levels of harassment.

First, they have to respond quickly and decisively when complainants have the courage to speak up.

Victims feel heard and codes of conduct, which might otherwise gather dust, are suddenly taken seriously.

QBE earns plaudits here in relation to the complaint against Regan.

Second, staff must know there is a process to seriously hear and consider their complaints, or at least someone to talk to.

And finally, people must be informed that workplace harassment has many forms, ranging from more serious physical contact to commentary about someone’s appearance.

More often than not, the response from companies is to undertake a long investigation lasting months, in the expectation that the victim will leave and not take their allegations any further.

Szlakowski lodged her complaint with AMP in June 2017 and resigned in March 2018 after negotiating a settlement. If AMP thought that was the end of the matter, it was sadly mistaken.

As Pahari’s career continued to flourish, and AMP continued to play down his behaviour, Szlakowski’s determination to speak out only increased.

Last month she did. Eight days later the board imploded.

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