A new survey of almost 650 ethics and compliance professionals found significant gaps in training topics offered to boards, when compared to training programs on similar topics provided to employees. The results suggest the need for substantially increased board education on a diverse assortment of risks, including those associated with cybersecurity, workplace harassment and conflicts of interest.
The survey, conducted by the prominent compliance software services company Navex Global, found that for cybersecurity, 13 percent of surveyed organizations offer training for their boardmembers, while 69 percent of their employees receive such training. For conflicts of interest, 19 percent of surveyed companies provide board member training while 76 percent of their employees receive such training. For workplace harassment, the “split” is even more pronounced, with only 7 percent of surveyed companies providing board member training while 76 percent of their employees receive such training. In addition, of the 58 percent of surveyed companies that report training board members on risk matters, only 20 percent offer such training in new director orientation processes. On a more positive measure, 70 percent of the surveyed organizations identified ‘creation of a culture of ethics and respect’ as the most important goal of ethics and compliance training.
These survey results are potentially significant in at least four respects. First, the new “Commonsense Governance Principles” (see above) strongly recommend robust board education programs. Second, allegations of workplace harassment within prominent corporations have been quite in the news of late. Third, conflicts of interest issues go to the director’s core duty of loyalty, and there may well be need for education on the application of that duty and of the organization’s conflicts policies. Fourth, the effectiveness of board education programs generally, and ethics and compliance training in particular, should be a shared focus of the governance/board development and audit/compliance committees. Finally, the board’s willingness to receive additional education on these and similar issues may be perceived as evidence of their good faith, and of the proper “tone at the top.” The general counsel may wish to “team” with the chief compliance officer in sharing these survey reports with the proper board committees.