Behavioral ethics, the board and C&E officers

In Conflicts and Biases in the Boardroom, recently posted on the Harvard Law School Forum on Corporate Governance and Financial Regulation, Frank Glassner, of Veritas identifies five ways that cognitive bias can inhibit great governance:

– A board is reluctant to ask the right questions

– The group is unable to fully and effectively involve new board members

– Excessive deference is afforded to a few board members with a long company history

– Peer pressure and conformance minimize constructive dissent

– Inflexible adherence to tradition limits consideration of new initiatives.

He further writes: “Every board member must acknowledge that implicit biases impact his/her objectivity.”

Not surprisingly (given the focus of the COI Blog), I agree with this. But I also wonder if there is a place for the compliance  and ethics officer in helping to address this daunting area.

In an earlier post  I wrote: Ultimately, for a company to have not only a strong compliance program but also an ethics one, the CEO and other leaders would empower the C&E officer to identify and challenge decisions that may be based on bias. (Note that I don’t mean literally all such decisions, but those that are significant in potential impact and have a meaningful ethics/fairness dimension.) The leaders would do so because they would understand that being fair is not just a matter of good intentions; rather, it can also require expertise and effort – both of which the C&E officer can bring to a challenging set of circumstances.

Here is another prior post addressing the issue:  Behavioral ethics and compliance: what the board should ask..

Finally, here is an index of  behavioral ethics and compliance posts generally.

 

 

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