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Vanessa James

SA Law LLP

Head of Employment

Read more about Vanessa James

How should HRDs protect their position in light of the BBC HR scandal?

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The role of the HR Director has been forced into the spot light of accountability with the HR Director for the BBC being called to give evidence in front of the committee of MP’s investigating the scandal of over-generous exit packages.  During this process the HR Director in question has been publically named – and most certainly shamed – with the most cringeworthy disclosure that she referred openly to settlement packages as ‘sweeteners’.

HR Directors need to be more savvy of the role of corporate governance not only where public money (or quasi public money such as the BBC) is at stake. They must also be more astute in a corporate setting where shareholders may question when large severance packages are awarded to departing employees long after the deal has been done. Some of the problems for HR do stem from the normal positioning of HR leadership in the business often seen as (second tier) management and often never quite able to elevate to equal status with the CEO and rest of the board.  This does sometimes make it challenging for the HR professional to have their voice heard in the decision making process – especially if the exit in question is a senior one and driven by very senior leadership in the business/organisation. 

That said, the first and most obvious advice to HR professionals is to be guarded in emails. It is something that all HR employees should know but – inexplicably – repeatedly become unstuck by the comments they have communicated internally. Emails have a habit of finding themselves into the public domain either as part of a subject access request or Freedom of Information request – or indeed as part of a litigation case.  

With regards to the BBC exit packages, the controversy has concerned payments which exceed contractual notice entitlements. There may, however, be circumstances in which it is perfectly legitimate to settle a senior executive for more than their contractual notice. Notable examples include if the employee has statutory claims for discrimination in addition to the contract claims, or where it is a commercial necessary to have an amicable parting so that statements to the press/public can be mutual and agreed. Another issue with accountability is that it often comes a long time after the event when memoires of mostly verbal discussions about what to pay, and why, are not recorded. Often, details ends up lost in the sands of time. This allows for finger pointing and passing the blame around. 

So how does a HR Professional ensure that they stay protected from any future scrutiny without alienating themselves from the rest of the leadership team?  By suggesting that it might be prudent to obtain written confirmation of the issues from the employer's employment advisors to protect all of the senior management team and the board. The HR professional can get 'buy in' from the leadership team on the basis the HR professional is seeking to protect them all.

If a CEO or Chairman has decided on a particular level of payment how does the HR professional introduce the idea that the payment might be excessive, without risking losing popularity with the CEO and rest of the senior management team? It is far more challenging where there is a strong minded and determined business leader (such as a CEO or Chairman) as they will have invariably have made up their mind and may not be persuaded to obtain formal advice from the company lawyers. If that is the case then the HR professional might first want to have a discussion with a trusted employment lawyer (most HR professionals have a good relationship with such a person) to establish whether they are right to be concerned about the level of the package. Keeping a note of that conversation would be a good idea.  If the HR professional receives advice that perpetuates their concerns then they may want to gently point that out to the CEO on  email and if the CEO or otherwise ignores that suggestion then the HR person will have a paper trail to ensure that they are not 'blamed' for going along with excessive payments without raising a challenge. How hard the HR professional presses the point will depend no the severity of the breach of governance and the leave of seniority the HR professional may have in the business. For example HR Director will be expected to push harder than a more junior HR professional.

Furthermore, if a package is agreed upon, how does the HR professional ensure they are not ‘blamed’ for its ‘generosity’ at a later date? Keeping printed copies to hand of emails and notes of meetings (timed and dated) would be a good place to start.

What is very important is for HR professionals not to think ‘it happens to others’. That the BBC HR Director was paid a package of around £300K in some way makes her ‘a different case’.  The reality is that accountability can arise in any organisation that has shareholders, a non-executive board, charitable status, or receives some income from government sources, i.e. the ‘third sector’. These situations may not be publicised but they do arise. The high profile BBC situation might be at the top end of the scale, but being held to account in any context is a stressful situation for all concerned.    

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Vanessa James

Head of Employment

Read more from Vanessa James
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