The Board’s Role In Curbing Ethical Issues
Pat Harned, CEO of the Ethics and Compliance Initiative (ECI), talks about the role Boards play in curbing ethics issues, and why these issues have become so top of mind for corporations, in this article from Corporate Board Member.
Harned says it’s not realistic to expect the board to know everything there is to know about the ethics and compliance program. The board’s role is to make sure that the organisation is implementing an ethics and compliance program – not just a basic, check the boxes program, but a high quality one which seriously addresses issues and threats. The other key responsibility Harned sees for the Board is monitoring the culture of the organisation. To ensure they’re regularly receiving information about the culture, and to hold management accountable for owning and leading the effort to address the culture.
The CEO’s role is to understand their influence, and set the tone from the top. Research has shown is that there are two drivers of culture in an organisation. The first is the CEO and the C-Suite. They establish the expectations of integrity in companies, so they need to be committed to modelling the conduct they wish to see. The second major driver is immediate supervisors, managers who on a day to day basis operationalise and implement those expectations.
Harned says CEOs need make sure that they have provided the necessary resources to create a high-quality ethics and compliance program – the CEO needs to champion it, and make sure that other leaders understand their role in it. She says their chief ethics and compliance officer need to report to the CEO directly and also to the board.
ECI is doing some work around predictive analytics, which Harned describes as ‘the new frontier’ for ethics and compliance. There is increasing interest from companies in mining the data they have to get a sense of whether it’s possible to figure out when certain areas of their business are at higher risk for problems, and to what extent those metrics can be identified and used to monitor the organisation.
Corporate Board Member, Gabriel Perna, August 14, 2018. Read the full article here.
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