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SAP Wrestles With Concerns Over Women’s Treatment, Senior Exits

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(Bloomberg) -- Christian Klein was in his second year as chief executive of SAP SE in January 2021 when he addressed a staff meeting to field questions about the imminent launch of a new push into cloud computing.

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A staffer took Klein, 42, to task over female representation. “If gender equality and women in leadership is important to SAP, why are there no female speakers?” one employee asked through a moderator, concerning the event planned for the announcement later that month. Klein’s response took the audience aback.

He said the question was “fair,” and that SAP needs to improve its diversity. However, he added that he couldn’t change the status quo overnight. “You can’t just have anyone on the stage who has no clue on the topic,” Klein said, according to a recording of the event. Several female employees found his response offensive because it suggested he regarded women as unknowledgeable, and they lodged complaints seen by senior management, according to people with direct knowledge of the interchange.

While Klein later walked back the comments, the clash struck at the heart of SAP’s struggle to elevate and retain women in some of its senior-most positions, including the former co-CEO and a one-time president of SAP’s operations in Asia. Although the company’s policy permits “close personal connections” between colleagues as long as they avoid conflicts of interest, some women believe the policy tacitly condones inappropriate behavior.

The software company has hosted networking events that involve heavy drinking and have resulted in unwelcome advances from senior male managers toward female colleagues, according to more than a dozen current and former SAP employees. Some women who have complained about mistreatment, such as bullying, unfair treatment, or offensive sexual advances, found HR to be unhelpful or hostile, in some cases moving women to other roles or pushing them out of the company entirely, several people said. The people who spoke to Bloomberg requested anonymity because they fear reprisals and don’t want to jeopardize their job prospects.

“SAP has a zero-tolerance policy for harassment and unlawful discrimination of all kinds,” Joellen Perry, an SAP spokeswoman, said in a statement. “We have a robust process for investigating 100% of reported allegations, and consequences for those found to be in violation of our policies can and have included termination of employment.”

Walldorf, Germany-based SAP is Europe’s largest technology company, but its businesses span the globe, and it employs more than 31,000 people in the U.S. SAP has been struggling with a new strategy and fierce competition from rivals including Microsoft Corp., Oracle Corp. and Workday Inc. The stock has declined about 25% this year, giving SAP a market capitalization of about 115 billion euros ($122 billion). The swoon reflects a pandemic-related drop in demand for the company’s Concur travel-expense management software, as well as concerns that Klein’s strategic shift toward cloud-based products has yet to bear fruit.

Companies across the technology industry have struggled to promote women to the highest levels. Research has shown that executives rarely attempt to change their company in a structural way to improve gender equality, and a PwC study of 2,000 U.K. university students showed 78% of students can’t name a famous woman working in technology. But while major U.S. tech companies have been accused of failing to support women, many of their European rivals have largely managed to avoid similar scrutiny.

In the U.S., technology bellwethers, from Activision Blizzard Inc. to Uber Technologies Inc., have well-documented histories of failing to combat harassment. Others, including Intel Corp. and Hewlett-Packard, have removed CEOs after learning that they were involved in intimate relationships with colleagues. Google parent Alphabet Inc. pledged $310 million in 2020 to expand diversity efforts and resolve shareholder litigation that alleged the company’s board to failed to prevent sexual harassment and hid misconduct by executives. In Europe, more than a dozen people made public claims of sexual harassment and abuse against employees of French game-maker Ubisoft.

SAP made history in 2019 when it promoted Jennifer Morgan, 51, to the role of co-CEO, alongside Klein. She was the first woman to lead one of Germany’s 30 largest listed companies. But the pair disagreed on key issues from the start, Klein said in an interview in 2020. The co-CEO structure was disorganized and, at times, chaotic, a person with knowledge of the matter said at the time. Morgan helped oversee operations from SAP’s U.S. office outside Philadelphia, while Klein worked from headquarters in Walldorf, remaining close to Hasso Plattner, 78, SAP’s influential co-founder and chairman. After less than a year, Morgan was on the way out. She is currently global head of portfolio operations at Blackstone Inc.

Eight months afters Morgan’s exit, Adaire Fox-Martin, an executive board member and the former president of SAP’s Asia Pacific Japan business through 2017, announced her departure. Fox-Martin was a mentor to many women at SAP, and her resignation caused shockwaves among senior female leaders, several employees said. Fox-Martin, who has since taken a role leading Google’s European cloud business, didn’t respond to LinkedIn messages requesting comment. Morgan did not respond to requests for comment.

SAP added new female employee representatives to its board in 2019, and it hired former Microsoft executives Sabine Bendiek, 55, and Julia White, 48, to senior roles in 2021. About a third of SAP’s staff are female, with 28.3% in leadership roles in 2021, up from 26.4% in 2019, according to company data, putting it on par with some peers. Even so, the departures fueled concern that women are unable to thrive in senior leadership roles at SAP, according to people who spoke to Bloomberg.

Fox-Martin’s exit was particularly demoralizing for women in SAP’s Asia-Pacific region, which has experienced instances of inappropriate behavior in and out of the office, several employees said. After a company event in Sydney in January 2019, a group of executives and employees visited Frankie’s Pizza, a rock-and-roll-themed dive bar at the center of the city, according to people in attendance. A senior Australian executive made unwanted advances, including groping, toward a junior female colleague, the people who were there said. The woman didn’t file a formal complaint because she didn’t think SAP’s human resources department would help, and the executive was never disciplined, said a person with direct knowledge of the matter.

Such incidents weren’t confined to the Asia-Pacific region, current and former employees said. In Europe, after an alcohol-fueled event in Barcelona in 2020, a male sales executive took photos of a female colleague who had fallen asleep on a bus. The photos were passed around a WhatsApp group consisting of male sales staff, one person said.

SAP’s Perry said the company was unable to verify any of the incidents reported by Bloomberg. “SAP is committed to fostering a diverse, inclusive workplace,” she said. “We have often been recognized by independent external parties as an outstanding place to work for women and employee feedback suggests the strong majority of employees agree we create and maintain an equitable workplace.”

Many women, including senior managers, said they have been conditioned to avoid events like these. Others said female employees often feel compelled to attend because they present a rare opportunity to network.

SAP requires staff to complete diversity and inclusion training every year. The company said its employees have a variety of options for reporting instances of harassment, and that 81% of employees surveyed in 2021 believed that SAP has equal opportunities regardless of gender or age.

Bloomberg spoke with female executives who said they found SAP to be supportive of their careers. They asked not to be identified because they aren’t authorized to speak to reporters without a manager’s approval.

Even so, some employees said that they are reluctant to complain to HR for fear of reprisals or because they doubt HR will take action. One U.K. employee who left an unflattering review of her manager in an anonymous questionnaire said he confronted her about the issues shortly afterward. She said that the experience made her afraid to bring up more serious complaints after she experienced discrimination and inappropriate sexual advances at work at a later date.

This was among the instances SAP said it was unable to verify.

Another high-ranking former female employee in Asia said she complained to HR about a manager who made inappropriate comments and asked her to keep her webcam on during the day. She said that after her complaint, which occurred in recent years, she was put on a “performance plan,” an initiative aimed at boosting the output of underperformers that often serves as a prelude to firing. A woman who said she was harassed by male executives at off-site events in recent years said she didn’t go to HR in part because of the company’s reputation for pushing out people who complain.

One female executive who’s since left the company said her direct reports, including men and women, told her they believed they could go only to her, and not HR, with problems. Their concern, they told her, was that HR ignored complaints and acted in the interests of managers -- not rank-and-file workers.

“Bloomberg’s failure to provide sufficient information means we’ve been unable to verify the four anecdotes provided across three years and three continents,” Perry said.

SAP’s gender-related issues have surfaced in at least one court case. A former executive in Singapore, Billie Jean Burlingame, said that her job was cut in a reorganization last year after she spoke out against gender discrimination at the company, according to an ongoing lawsuit filed with the country’s High Court in December 2020. Burlingame, one of the highest-ranking women in the country, said in filings that she met or exceeded her performance targets and was on her former boss’s succession plan. Even so, SAP said she was unsuitable for her former manager’s role or any others she applied for after her position was eliminated, according to the court documents.

SAP’s Perry said the company doesn’t comment on ongoing litigation.

Two weeks after Klein’s comments at the company meeting in January last year, he attempted to make amends in a video shared internally. “I was by far not clear enough,” he said, adding that he’d spent time reflecting on past hiring. “I can absolutely say, no, I wasn’t always looking at diversity and inclusion,” he said. “And that isn’t a bad intention, but you pick the people you know around you.”

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