Your board of directors must stay informed about their compliance duties and stay engaged in your compliance and ethics program to fulfill their obligations as board members. Training your board of directors is a key responsibility for compliance professionals. At times, training your board of directors can be a real challenge.
In this second part of a two-part podcast series, Eric again speaks to how can you effectively discuss compliance responsibilities and the key role of the board in compliance with board members and follows up the previous episode with two additional areas of training you should consider.
First, the board needs to be aware of, and educated on, the specific compliance risk for the organization and the board. There needs to be discussion on board-specific risks, or risks based on the director’s roles, and this often includes conflicts of interest, insider trading and other topics tailored to the board’s position and role. More importantly, the board needs to be trained on, and able to engage on, issues of critical risk for the organization. Remember, the USDOJ talks about the directors having “expertise” and being aware of the risks of the operation. They cannot be engaged and knowledgeable without study and training. Deciding what to train on is tied to your risk assessment and consider carefully what the board should be trained on based on the top tier compliance risks you face.
Additionally, Eric suggests that it is important to provide the “business case” for compliance and ethics at the board level. This is important since the board is ultimately responsible for the culture, so including important data and information about how compliance and ethics, particularly a strong ethical culture, will arm the board for their important role. Eric talks a little about some of the sources of information out there for compiling the business case, including the link between culture and performance, recruiting and retention and reputation.
Be sure to register for our upcoming webinar “The Road to a New Code of Conduct: How to Use Best Practices to Update Your Code of Conduct” on Wednesday, October 4 at 12:00pm CST. Register here.