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Sex, Lies, and Leadership

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LONDON – News events can often serve as important catalysts for introspection, not least for members of company boards. Recent revelations of the Russian government’s involvement in hacking into the Democratic National Committee’s computer system – just two years after North Korea’s hack of Sony Pictures – has spurred a push in boardrooms around the world to tighten their organizations’ cyber security.

Likewise, stories of illegal or unethical labor practices – for example, among Apple suppliers in China – have inspired companies to take a close look at their supply chains. And criticism of excessive executive remuneration has led to frantic meetings by many boards’ compensation committees. But there is one issue in the news that has not yet received sufficient attention in boardrooms: child sexual abuse.

In the United Kingdom, the last month has brought harrowing reports about child abuse in youth soccer teams, where promising young athletes attempt to play their way to the professional level. At last count, 98 amateur and professional clubs in the UK were implicated in some way.

While the public has been shocked by the revelations, the affected clubs’ leaders may not have been – at least not in every case. After all, many clubs had previously heard allegations of sexual abuse of young players, but had chosen to ignore them or cover them up, at times even doling out hush money to the victims – all for the sake of protecting their own reputations.

Crewe Alexandra’s board, for example, actively discussed sexual abuse allegations against a coach, Barry Bennell, in the late 1980s, but decided not to report him to the police or even to fire him. Bennell turned out to be a serial pedophile. Though he was ultimately tried and sentenced in 1998, he first got to spend several more years abusing young boys, thanks in no small part to Crewe’s spineless and venal board.

Even today, boards are sometimes choosing to defend their reputations at the expense of basic human decency. Last July, Chelsea Football Club paid a former footballer £50,000 ($62,000) to agree not to speak of the abuse he allegedly endured in the 1970s. The five-year review of child safety measures, launched by the Football Association (the governing body of UK soccer) in 2001, was dropped after just two years, reportedly in response to resistance from some FA staff.

Yet the scandal plaguing UK soccer is hardly unique. According to a just-released joint investigation by the IndyStar and USA Today, at least 368 gymnasts in the United States have alleged some form of sexual abuse over the last 20 years. Top officials at USA Gymnastics, one of the country’s most prominent Olympic organizations, not only failed to alert police to those allegations; they hid the complaints. Even coaches who were fired, the report asserts, were often not flagged, meaning that predatory coaches could simply start training children at a new gym.

And then there is the Penn State scandal, in which the university’s trustees turned a blind eye to a long-running cover-up of the serial pedophilia of Jerry Sandusky, a former assistant football coach who gained access to his victims through his own charity for troubled youth. Two former university officials have been charged in the alleged cover-up.

Now that the truth has come out, there is nowhere to hide. The FA and clubs across the UK are scrambling to conduct investigations and reviews. USA Gymnastics has hired a former prosecutor to help it strengthen its child-protection policies, and its board of directors has established a policy review panel. Penn State fired the coach under whom Sandusky worked, Joe Paterno, for failing to pursue an allegation against Sandusky that a subordinate brought to his attention in 2002.

But it should not be only the affected organizations that take action. Even “innocent” companies and organizations must evaluate and upgrade their policies for protecting vulnerable people, along with their means for enforcing those policies. They must also review their records, to identify lapses and ensure that past mistakes are not repeated.

Such reviews are needed not just in obviously child-related sectors, like education or sports, but wherever power differentials are a permanent feature of operations. Any organization operating in countries or communities where it has a great deal of influence and leverage must take action to ensure that no staff are using their positions to take advantage of vulnerable people or groups. Examples include the oil and gas sector, the health sector, and the humanitarian sector, including aid agencies and United Nations peacekeepers.

The responsibility extends beyond the organizations themselves. As we have seen with the FIFA corruption scandal, sponsors and investors can use their influence to bring about change. Beyond the moral imperative, doing so is in these actors’ self-interest. Hiding from a scandal may help you in the short term, but it is harder than ever to keep a secret nowadays – and those who cover it up enable crimes and ethical violations are complicit in them.

In the same vein, companies should be holding other organizations in their supply chains accountable. As with unfair or illegal labor practices, businesses must refuse to sponsor, supply, or work with organizations that fail to protect their workers from sexual abuse. Otherwise, they, too, are guilty.

Child sexual abuse is not a new problem. What has become apparent lately is the power that boards of companies – as well as large investors, like pension and sovereign-wealth funds – have to help stop it. At a time of collapsing confidence in “elites” – from political leaders to, yes, board members – actively using this power to protect young people would have the added benefit of fostering trust within divided societies. There is no excuse to delay.

Lucy P. Marcus is CEO of Marcus Venture Consulting.

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