Boards of directors that are serious about their compliance oversight duties understand the difference between a compliance program that is mere window-dressing and one that is intended to find, fix and prevent misconduct. Yet many boards do not know the difference between the Compliance 1.0 model—in which compliance is a captive arm of the legal function—and the alternatives.
Boards are under extraordinary pressure to perform. Aggressive oversight by the U.S. Department of Justice and regulatory agencies, along with activist shareholders and class action plaintiffs’ lawyers, have forced corporate boards to respond to risks and embrace new solutions. Old models for corporate oversight and monitoring are quickly being replaced with new approaches that require board members to keep themselves up to date on ethics and compliance developments, and they have to ensure the board has adequate access to unfiltered information and reports from an empowered and independent chief compliance officer.
