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Expert says Wynn Resorts changes should satisfy regulators

A risk management expert that advises clients on sexual misconduct investigations and compliance says Wynn Resorts Ltd. has checked all the boxes with the harassment prevention program it has adopted.

Nicole Lamb-Hale, a managing director in the business intelligence and investigations practice of New York-based Kroll Inc., said the compliance program established by Wynn should satisfy concerns raised by the Massachusetts Gaming Commission in an adjudicatory hearing and an investigative report issued earlier this month.

Las Vegas-based Wynn is awaiting a ruling from the commission on whether it should be allowed to retain its gaming license in Massachusetts after an investigation by its Investigations and Enforcement Bureau and three days of hearings in Boston. The stakes are high for the company because it is planning to open its $2.6 billion resort, Encore Boston Harbor in June and already has begun hiring employees and taking reservations.

The five-member commission is in closed-door deliberations about whether to find Wynn suitable to keep the license it received in 2015. The company’s suitability came into question when the investigation determined that former Wynn Chairman and CEO Steve Wynn failed to disclose a $7.5 million settlement payment in 2005 to a woman who said he forced her to have sex with him. Steve Wynn has denied harassing anyone.

Several executives also failed to investigate reports of several harassment allegations over several years.

Deliberations underway

Commission Chairwoman Cathy Judd-Stein, on the last day of the hearing April 4, said it would take several days of deliberation to reach a determination on what action the commission would take and that it would be delivered in a written document.

In the meantime, Wynn executives are awaiting the outcome having done everything they say they can for now.

Some of what they did occurred last summer when they moved to redefine the company’s culture with a series of new policies and procedures.

Lamb-Hale, who has been following the Wynn matter, was impressed with the company’s efforts.

“There’s not much you can do to turn back the clock, but you can, going forward, with some things that hopefully will set a tone within the organization that will prevent it (harassment) from happening in the future,” Lamb-Hale said in a telephone interview.

“It’s important to elevate sexual misconduct prevention and compliance at the same level as any other enterprise risk issue,” she said. “The #MeToo movement has taken sexual harassment out of the shadows. These issues have been around as long as men and women have worked together in the workplace.”

Once company executives recognized the magnitude of the harassment issue they undertook a series of changes, including separating Steve Wynn from the company, implementing new sexual harassment policies and hiring personnel with expertise in human resources and regulatory compliance. Executives launched enhanced workplace compliance and prevention of sexual harassment training for all employees, designed and delivered by a third-party expert, and ensured that any employee who was aware of allegations of sexual assault by Steve Wynn and did not investigate or report it is no longer with the company.

Board makeover

In April 2018, the company’s board of directors elected three new female directors, resulting in a board that is now nearly 50 percent women. The company also appointed Ellen Whittemore, an expert in gaming regulatory matters, as general counsel; Marilyn Spiegel, an executive with significant hospitality and human resources experience, as president of Wynn Las Vegas; and appointed Rose Huddleston, a seasoned human resources executive, to the newly created corporate position of senior vice president of human resources, North America. All of them were on hand to testify before the commission in the hearing.

Lamb-Hale stressed that changing the company’s corporate culture in sexual harassment matters means assuring employees that new policies aren’t a one-and-done situation and that compliance officers must act swiftly to address any future accusations.

“It’s something that you can’t just put together and put on a shelf,” Lamb-Hale said. “You have to continue to refine it, you need to audit it and evaluate it to show the regulators they’re doing that.

“If you take care of (complaints) quickly, your employees know that you’re serious about it and this behavior is unacceptable in the culture,” she said. “But if you put it off or it’s the CEO so we can’t do anything about it, it’s a problem and it all falls apart.”

Lamb-Hale wouldn’t predict what she thinks the outcome will be for the company’s license, but she’s convinced it has a solid harassment prevention and compliance program in place.

Gaming analyst John DeCree told investors in a report earlier this month that he expects Encore Boston Harbor, the company’s $2.5 billion property being built in Everett, Massachusetts, to open as planned.

“Based on the company’s clear and decisive transformation, we believe current management should be able to adequately prove current suitability to keep the license and open the property,” DeCree said. “However, if the commission determines the company is unsuitable (even after appeal), and Wynn is required to vacate its license, we envision a trustee to oversee the opening of the property and an orderly sale process.”

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

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