The Credibility Gap
When institutional process and public trust diverge, liability follows.
The Context
On 1 April 2026, the International Criminal Court’s member states voted to initiate formal disciplinary proceedings against its Chief Prosecutor, Karim Khan. The trigger was a UN investigative report that found a “factual basis” for allegations of non-consensual sexual interaction with a subordinate, a matter first disclosed to Khan personally on 2 May 2024. This action proceeded despite a separate judicial panel concluding the evidence was insufficient to meet the criminal standard of “beyond a reasonable doubt.” The institutional schism is profound. Officials from Khan’s own office opposed his continued service. Major backers of the court voted to proceed with discipline, while a bloc of African states argued for its cessation. The court’s highest legal officer now stands formally accused, creating an irreconcilable conflict between internal process and external perception.
The Risk
This is a masterclass in governance failure and its attendant liabilities. For a New Zealand director, the parallel is stark. The Companies Act 1993 imposes a duty to act in good faith and in the best interests of the company. A failure to address serious misconduct allegations at the highest level—especially when internal whistleblowers and external investigators raise credible concerns—may constitute a breach of that duty. Under the Health and Safety at Work Act 2015, officers have a positive duty to ensure, so far as is reasonably practicable, the psychological health and safety of workers. A toxic culture enabled by inaction at the top is a prosecutable offence. The Privacy Act 2020 further mandates proper handling of sensitive personal information, a process likely compromised here. The ultimate penalty is not merely reputational. Directors may be personally liable for fines, disqualification, and in extreme cases, imprisonment. The ICC’s dilemma demonstrates that when an organisation’s internal adjudication clashes with the evidentiary findings of a competent external body, the court of public opinion—and subsequently, the law—will judge the process, not just the verdict.
The Control
The strategic solution is the immediate, transparent, and independent adjudication of serious misconduct allegations against senior leaders. The board must mandate a single, rigorous investigative process with clear terms of reference, insulated from internal influence. The standard of proof for disciplinary action must be clearly defined and appropriate to the context—the “balance of probabilities,” not the criminal standard. Crucially, the board must be prepared to act decisively on the findings, regardless of the seniority of the individual involved. Prevarication is interpreted as complicity.
The Challenge
These are the critical questions you should be raising at the board table:
| Does our internal disciplinary process have the independence and perceived legitimacy to survive a scenario where a senior executive is accused, and external findings contradict our own? | |
| What is our explicit, board-approved protocol for suspending a senior leader during a misconduct investigation to mitigate both operational and reputational risk? | |
| How do we audit our culture to ensure psychological safety, so that allegations are reported and addressed before they escalate into a crisis that threatens the entire organisation’s licence to operate? |