We are increasingly hearing about tech investors demanding ‘#MeToo’ type clauses in deals with tech start-ups to encourage disclosure of sexual harassment and poor workplace culture. However, it is questionable whether these will really take off in the UK and how meaningful or effective a #MeToo warranty can be in practice.
Culture is increasingly becoming a focus for many organisations and the high-profile allegations of poor workplace culture, harassment and discrimination at major tech companies has alerted investors to consider culture as a financial risk.
Standard warranties around compliance with laws, employment disputes and litigation might not flush out a culture of harassment and discrimination. But a warranty around allegations or complaints of sexual harassment is broad, difficult to measure when concerns have not been formally reported and it would need to be considered who had the assumed level of knowledge to disclose against it.
What is clear, is that tech investors are now more mindful about culture related risks and we expect this trend to continue.
Tech investors are increasingly including “#MeToo” clauses in deals with start-ups, forcing entrepreneurs to disclose complaints about sexual harassment in the workplace, as more women speak out about sexism in the industry.