The heat generated by the ubiquitous bro-code and sexism that became part of Uber’s culture is yet to cool down, and we are hit by another tale of sexual harassment in the savvy Silicon Valley. Well known venture capitalist, Justin Caldbeck of Binary Capital has proceeded on an indefinite leave after several female entrepreneurs came out with details of advances made by him.
Is sexual harassment on the rise? Perhaps not — this is a deep-rooted issue that has marred working women in a patriarchal society for a very long time. With the advent of social media and legislation of supportive laws against sexual harassment, working women are better placed now to talk about it.
The Venture Capital and Private Equity industry has had its fair share of involving sexual harassment at workplace. In the recent past itself, Benchmark, the Silicon Valley-based Venture Capital firm, and Fidelity Investments sought resignation of Travis Kalanick for failure to take necessary measures at Uber.
Unfortunately, India is not far behind. Several incidents have come to light in the past few decades, including involving Senior IPS Officer KPS Gill, former Infosys senior executive Phaneesh Murthy, claims of an intern against Supreme Court judge Justice AK Ganguly, TERI ex-chairman RK Pachauri, and the infamous ex-Tehleka chief Tarun Tejpal.
The venture capital and private equity industry in India itself has seen a number of episodes ranging from departure of Phaneesh Murthy from Apax Partners-backed iGATE Corporation, stepping down by The Viral Fever (TVF)’s CEO Arunabh Kumar, a company backed by Tiger Global, to FIR against Kalaari Capital backed ScoopWhoop’s founder Suparn Pandey.
Venture capital and private equity investors take a great degree of care prior to making investments in their portfolio companies, and employment agreements with key employees are extensively negotiated. “Misconduct” of any kind can lead to termination of employment of key employees. Such protections are not pre-emptive in nature.
While extensive diligence is undertaken to look into issues of money laundering and ethical practices, it is time for investors to evaluate culture prevalent at portfolio companies and do a thorough key-men diligence.
The need is for affirmative action from investors, companies and all its stakeholders to comprehend seriousness of this issue. Not only such incidents increase reputational risk for all stakeholders, it may erode value in fairly quick time (especially for start-ups which anyway have to deal with several other survival issues).
In my view, the biggest challenge is to overcome the sheer insensitivity towards sexual harassment, and continuing with the bro-code that has seeped deep into our patriarchal society.
Law may not be, but gender diversity could be, the answer here.
Author is a Partner at Khaitan & Co, one of India’s premier law firms. Views are personal.