A tech entrepreneur recently took a novel approach to ensure that members of her company’s board of directors cannot engage in sexual harassment and keep their positions. The entrepreneur, Kristina Bergman, is the CEO of Integris Software. Bergman added a clause to stockholders’ voting agreements that requires them to vote out a director if there is a “reasonable probability” that they sexually harassed someone.
Typically, directors are only removable for cause, such as if they embezzle money from the company or engage in fraud. Bergman’s approach is novel but it is smart given how rampant sexual harassment is in the tech industry. Hot startup companies, like Uber, and some of the venture capital firms that fund them, like Binary Capital, have come under fire for sexual harassment. Bergman wanted to try to prevent the problem that has dogged these companies from infecting hers.
Notably, the standard of “reasonable probability” is intended to be lower than the standard of proof required to hold someone responsible for sexual harassment in court. Bergman and the lawyer who helped her draft the stockholder voting agreement wanted to avoid protracted legal fights.