As the personal and professional failings of individual executives begin to gain public attention, there are actions boards can take to stop corporate misbehavior, according to the Harvard Business Review.
Here are 10 policies every board can enact to help limit bad behavior.
1. Create a board ethics committee. The importance of good ethics should be demonstrated from the top-down, and a dedicated group focusing specifically on ethical issues would be a great place to start.
2. Appoint a chief ethics and compliance officer. The person in this position should have a thorough legal background and oversee a multi-disciplinary team across the organization. The board ethics committee should report to the CECO.
3. Establish public ethical standards. In order to deter unethical actions and have a frame of reference to judge them by, boards should establish public ethical standards and publish them online.
4. Have clear escalation policies. There should be clear guidelines on what level each ethical digression should be dealt with, for anyone ranging from frontline employees to executives.
5. Develop measurable integrity indicators and reward good behavior. Do not only bar unethical behavior, but outline what examples of good behavior are and reward them accordingly.
6. Consider moral questions when hiring C-suite executives. Do not only value professional achievements when hiring executives, but put a premium on high moral character as well.
7. Mandate ethical training. Interactive ethical training should be required for all executives, including examples of actual cases that blur the lines between ethical and unethical actions.
8. Ensure there is no retaliation against speaking up within the organization. The best way to crack down on unethical behavior is to listen to whistleblowers, and boards must ensure these whistleblowers are not punished for reporting unethical behavior.
9. Apply the rules across the organization. Boards must ensure executives are treated the same as anyone else in the organization to enhance the perception of fairness among all employees.
10. Be prepared for compliance failures. Ethical lapses happen all the time, so boards should not be surprised when faced with these problems. Instead, boards should be prepared to handle them in a structured way.