After a B.C. trustee’s ‘astonishing’ $750,000 penalty, lawyer outlines how HR leaders work with boards
The $750,000 human rights penalty against former Chilliwack School District trustee Barry Neufeld has been described by Vancouver labour lawyer Craig Munroe as “an astonishing one,” and raises an uncomfortable question: What happens when the legal and reputational risk comes not from staff, but from the boardroom itself?
For most HR leaders, misconduct cases involve employees or managers. But when the person accused is a director or trustee, the dynamics change.
Munroe, who also holds the Institute of Corporate Directors’ ICD.D designation and sits on several boards, explains how board-level misconduct can become an HR and workplace issue.
When public controversy triggers internal obligations
Not every public controversy involving a director will create a workplace issue, Munroe says.
But when the target of the comments is a defined group of employees, or the remarks are so egregious that they affect psychological safety, the line can be crossed.
In Neufeld’s case, the tribunal’s finding of discrimination and hate speech revolved around the impact of his public statements on LGBTQIA+ teachers’ work environment – statements which were given a $750,000 price tag.
Once complaints arise that a director’s conduct is affecting employees, HR’s role is less about making the call on a board member’s fate and more about triggering and supporting a defensible investigation process.
The same basic duties to prevent and address harassment still apply, but as Munroe explains, the usual internal hierarchy may not be appropriate when the respondent sits at the top of that hierarchy.
Why external investigators matter
Under B.C.’s workers’ compensation regime, employers must have bullying and harassment policies, and those policies apply to anyone in the workplace, including board members when they interact with staff.
“They can make a complaint under that policy, and that complaint can be on anyone in the organization, either their supervisor, the executive director or CEO or even a board member,” says Munroe. “There'd be an investigation, ordinarily, whether a brief one or an extensive one, of that behavior.”
In a typical complaint about a co-worker or manager, an internal HR investigation may be entirely appropriate. But when the respondent is in the upper reaches of leadership, that equation changes because of perceived and actual conflicts of interest.
That decision – internal versus external investigator – is not always HR’s alone, Munroe says, but HR often has a central advisory role.
“It really depends on the internal policy,” Munroe explains.
“It's common for the HR director to decide whether it's necessary to have an external investor, or whether it can be internal, but that's not how it has to be. It could be the general manager. It could be the CAO.”
If a complainant believes an internal investigation lacked independence, there are real consequences beyond internal dissatisfaction. As Munroe explains, the legitimacy of an investigation can be challenged, and if it is found to have been less-than-bulletproof, tribunals will lay down penalties.
In that scenario, WorkSafeBC “could look at that and say, ‘Yeah, that's an inadequate investigation because it wasn't sufficiently independent under the circumstances,” Munroe says.
Who actually decides what happens to a director
“If the results of that investigation … is that a board member, or CEO for that matter, or anyone else, has engaged in misconduct, the question then becomes, ‘Okay, who is the one charged with making a decision?’” says Munroe.
“What's to be done about that would likely switch over to the board at that point.”
Even when HR leads or coordinates an investigation, the power to decide the outcome for a board director usually rests with the board itself. Depending on the board’s governing documents, Munroe says, options may include removal, censure or remedial steps such as training or restrictions.
For Munroe, the strongest tool HR can offer boards on misconduct is not a specific sanction, but a clear, pre-existing framework that everyone understands in advance; that framework should link workplace safety obligations and board governance so there is no confusion about what happens when allegations arise.
“[So] that when events like these occur, and it's almost inevitable that something like this happens at some point in the lifetime of an organization, there's actually a roadmap to follow,” he says.
When organizations do not have those mechanisms, “people start trying to make up a process,” he warns, and “a process that is made up in the moment is far more open to attack for being a biased process than one which was established before any of these facts ever arose.”
