In the piece linked below, lawyer Jeffrey Kaplan discusses the role of the board in ethics & compliance. It’s a challenging question, given that the board is ultimately responsible — responsible for governing the firm and guiding its behaviour, but not in charge of day-to-day management. >>>
LINK: The Role of the Board [scroll to p2 of the PDF] (by Jeffrey M. Kaplan for Compliance & Ethics Professional)
Since the 1996 Caremark case, boards of directors have been expected to oversee
their respective companies’ compliance and ethics (C&E) programs. The legal—and indeed, economic—case for placing this obligation on boards is clear: A company’s directors tend to have more of a long-term perspective than do itsexecutives, and the benefits of strong
C&E are largely long term in nature. But as a matter of law (as well as business logic), boards are not expected to manage a C&E program (or indeed anything about a company).
So what exactly should they focus on?…
What do you think?