NEW YORK , Jan. 16, 2019 (GLOBE NEWSWIRE) -- Boards of directors – and their companies – can get into serious trouble, legally and financially, if they fail to oversee ethics and compliance (E&C) robustly, which according to an in-depth survey of Chief Ethics and Compliance Officers (CECOs) from LRN Corporation, seems to be unfortunately common.
For instance, 60% of CECOs say their boards do not hold senior executives accountable for misconduct.
“Even though it is settled law and policy that boards of directors are required to oversee company compliance with law and regulation, it’s not shocking that boards may not give E&C its due, considering their huge range of responsibilities,” says David Greenberg, LRN’s special advisor.
The good news is that the findings, along with LRN’s work with major companies and their boards of directors, point to some steps that boards of directors and E&C leaders can take to shift time and strategic focus to E&C, hold leadership accountable and create meaningful metrics that can give E&C its proper place as a priority.
Following are some of the steps and practices boards can adopt to improve E&C performance according to the LRN report, Board Oversight of Ethics and Compliance: Twelve Steps to Operationalize the Tone at the Very Top.
“Even if ethics and compliance oversight were not a requirement, boards would still be well advised to take a hands-on approach. Smart boards do, as they recognize that one of the first questions that comes up when a compliance failure happens is, ‘Where was the board?’,” says Greenberg.
He emphasizes how important it is for boards to act fast on upping their E&C game, citing the following data from LRN’s 2018 study comprised of in-depth interviews with 26 present and past CECOs of large companies.
“Ultimately, the gulf between CECOs and boards can be bridged, but it requires boards to take meaningful steps to acknowledge the very real financial, tactical and moral benefits of the E&C function,” says Greenberg. “Ethics and compliance needs more support and scrutiny from boards if it is to safeguard company reputation and performance.”
Since 1994, LRN has helped over 20 million people at more than 700 companies worldwide simultaneously navigate complex legal and regulatory environments and foster ethical cultures. LRN's combination of practical tools, education, and strategic advice helps companies translate their values into concrete corporate practices and leadership behaviors that create sustainable competitive advantage. In partnership with LRN, companies need not choose between living principles and maximizing profits, or between enhancing reputation and growing revenue: all are a product of principled performance. As a global company, LRN works with organizations in more than 100 countries and has offices in New York, London, and Mumbai. www.lrn.com