Boards Have an Important Role as Guardians of Ethics and Compliance

Published in: NACD Directorship, Dec. 2010/Jan. 2011, p. 58-59

Posted on RAND.org on December 01, 2010

by Michael D. Greenberg, Donna C. Boehme

There is a strong expectation by the U.S. Sentencing Commission (USSC) for boards to be directly involved in compliance and ethics (C&E) oversight, and the reporting relationship between the board and the manager of the compliance and ethics function, the Chief Ethics and Compliance Officer (CECO) is viewed as central to that responsibility. A central challenge in dealing with ethics and compliance matters, from the standpoint of independent directors, is simply limited time and resources. Active involvement by corporate boards in C&E oversight is a prerequisite for generating a culture of integrity within organizations, and the direct relationship between boards and CECOs is a key initial step in educating and engaging boards and in leading firms to regard C&E as something more than an exercise.

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