One of the unanticipated side effects of the intensive focus on the President’s personal conflicts issues is increased interest in the creation of a new “chief ethics officer” position. Yet the wisdom and practicality of creating a separate executive position requires careful and dispassionate board-level review, in consultation with general counsel.
Some companies (e.g., the Trump Organization) may find assigning oversight of ethical obligations to a dedicated corporate executive or outside adviser to be an effective strategy for addressing business conduct. But there is no broadly accepted portfolio for the role of a separate ethics officer, nor understanding of how such a role might encroach on the existing duties of the general counsel or the chief compliance officer. In addition, there is no general agreement on the qualifications for such a position, even though the evaluation of conflicts of interest and interpretation of federal ethical guidelines usually requires legal training.
Boards should therefore pause before treating the related actions of the Trump Organization and of the White House as a governance corporate best practice, as meritorious as those actions may otherwise be.