Boards Have Responsibility To Manage Ethics
Ethics and managing material ethical issues are board responsibilities, but directors can be at risk of having tunnel vision and not recognising the impacts of their decisions, says Cranlana Centre CEO Vanessa Pigrum in this FS Sustainability article.
“There has been a growing awareness on the part of board directors that what had been very clear-cut governance accountabilities around compliance, shareholder primacy, legal obligations is no longer enough,” Pigrum says.
“Boards are now being held accountable for ethical failings of their organisations. At the moment, there seems to be a gap in knowledge and a gap in having a certain and sure path to follow to make sure that boards are being as ethical and having as much social responsibility as they can possibly have.”
What practical action can boards take to address knowledge gaps? Ensuring diversity around the board table is one. Board renewal can be a slow process, so in the interim boards should seek advice and other perspectives. This is particularly important for longstanding boards which “can become very insular. They have a culture of their own, and unless you are a confident enough board to say we can challenge ourselves, we can open ourselves up to new opinions and have a dissenting view, to sense check the board, you’re at great risk of decisions in a complete bubble.”
Are ethics, ethical risk and ethical leadership on your board’s agenda?
via FS Sustainability, Rachel Alembakis, 23 September 2021. Read the full article here.
Cranlana Centre for Ethical Leadership’s programs include the 2 day Executive Ethics, 6 day Executive Colloquium and year-long Vincent Fairfax Fellowship. We also deliver online and tailored corporate programs. Find the right program for you. They are all held under the Chatham House Rule to encourage genuine and open debate, and allow participants to candidly discuss sometimes sensitive issues in private while allowing the topic and nature of the debate to be made public, and contribute to a broader conversation. The alumni program offers ongoing leadership development support and a lifelong connection with Cranlana.
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