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Train Your Board and C-Suite Now – The Under-Education of Corporate Leadership

bd4 trainThe next time we read about a train wreck of corporate malfeasance – be it in the anti-corruption, money laundering, financial reporting or any other space you can think of – please do not shrug your shoulders and shake your head from side to side. Instead, let’s consider how the board and senior management handled the specific matter, why they failed to address any concerns about compliance in this area, and what prevents them from acting.

There is a dirty little secret out in the corporate governance world – listen closely – sometimes board members and C-Suite executives do not understand what the law requires and how a compliance program is supposed to work. I know you find this hard to believe but the fault for this lack of education rests squarely in the laps of board members, senior executives and the chief compliance officer.

I have long advocated that corporate boards and senior executives have to attend mandatory training programs. Not just for ten minutes on the FCPA, or 10 minutes on employment law, but real and meaningful training so that they understand exactly what the law requires or prohibits, how the company is addressing these issues, and what questions should they be asking to ensure compliance. I have repeated myself on this issue over and over again.

A recent Ethics and Compliance Training Benchmark Report released by NAVEX Global underscored the importance of training programs and the glaring need to train corporate boards and senior executives. A copy of the report is HERE.bd2 train

The survey was based on responses from 644 ethics and compliance professionals. Some of the key finds were astounding (to say the least).

A key finding of the survey is that compliance program effectiveness is critically tied to overall performance of a company’s training program.

Many companies are struggling to implement basic training programs. Significant company populations are undereducated on key topics. Only one in five responding companies have developed advanced training programs including mobile learning, gamification, social learning or training portals.

Board members and senior management are “chronically” under-trained. More than 40 percent of organizations do not train board members and only 20 percent train new board members. For example, only 12 percent of companies’ trained board members on workplace harassment; 33 percent trained on conflict of interest; and only 22 percent trained on cyber security.

If corporate boards and senior leadership are ultimately responsible for a company’s ethics and compliance program, the lack of education and training stands as a significant risk to a company’s compliance program. Corporate boards and senior executives train4are responsible for oversight of a company’s compliance program. If they lack basic education and understanding of the legal risks, they cannot lead the company effectively.

There is no excuse for failing to train a company’s board and executive management. Almost two-third of companies responding to the survey identified lack of resources for the immaturity of their respective training programs. That finding by itself requires that corporate boards and senior executives respond and allocate more money and personnel to the training function to improve the level of education.

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