The importance of general counsel oversight of the health system’s code of conduct is becoming increasingly critical, given the extent to which the code is used to evaluate the appropriateness of executive conduct and certain emerging controversies surrounding such use.
The corporate code of conduct has been thrust into the spotlight as the platform from which many prominent corporate leaders have been terminated because of allegations of egregious personal behavior. According to one news report, more than 670 senior executives and employees have been accused of engaging in harassment or other misconduct-based code of conduct violations over the last two years, with many of them leaving their company as a result. A separate report from The Wall Street Journal suggests that some of these executives are challenging the allegations through litigation or other high-profile public means.
It is of course critical that corporations have the ability to punish aberrant employee and leadership behavior. Codes of ethics and conduct are key tools by which the board can exercise its oversight responsibility for workforce culture and, by extension, promote talent development and protect the corporate reputation. Yet the recent public discourse has raised some concern that the code may be a flawed means of evaluating conduct—that it is fundamentally a general statement of expectations and was never intended to be used for such consequential purposes. If left unaddressed, these and other issues can limit the effectiveness of the code of conduct and frustrate the board’s ability to exercise workforce culture oversight. Flawed procedures also can cause constituents to lose confidence in the equity applied in the interpretation of the code. Addressing possible code weaknesses is consistent with the board’s oversight duty.
The general counsel is the logical corporate officer to guide the board in its evaluation of code of conduct effectiveness. She knows the legal risks to the organization posed by flawed code enforcement. She appreciates the value of precise document language and intent. She is experienced in coordinating issues with other corporate officers (e.g., chief human resource officer, chief compliance officer). Most importantly, she understands the long-term organizational value created by a positive and protective workforce culture.