Board Oversight: Fostering an Ethically Competitive Company – Part 2

Episode Summary

As companies become more transparent, we like to believe that employee behavior will follow suit. However, recent corporate incidents suggest that certain companies still have a long way to go.

In this episode, Larry Thompson, Chairman of the Ethics & Compliance Initiative and board member with The Southern Company & Graham Holdings Co., reminds us that behind every ethically competitive corporate culture is a strong board and management team allocating sufficient time, attention, and resources to this topic.

“[The board] needs to understand that a culture of integrity is fundamental,” explains Thompson. “…[It] has to exercise leadership in making sure that management understands that establishing a culture of ethics, compliance, and integrity is very important to the board.”

Building off key themes from Part 1 of this series, Thompson outlines the elements of an effective oversight structure–one that enables boards to monitor and influence culture at their organizations.

The executives that are responsible for [a company’s] ethics and compliance program should be on equal footing with all [other] key departments and key priorities of the business enterprise…sales, product development, law, internal audit. The board has to make certain that these important functions are staffed properly and that [they]…have equal access to the decision makers in this company — including equal access to the board.
— Larry Thompson, Chairman of the Ethics & Compliance Initiative and board member with The Southern Company & Graham Holdings Co.