This year’s second Ethics & Compliance Program Effectiveness Report, published by compliance education firm LRN, examined the role and impact of boards of directors on ethics culture, compliance outcomes, and E&C programs throughout the country.
Of those surveyed, 79 percent of the ethics, compliance, and legal professionals indicated that the board of directors of their organizations effectively supported the ethics and compliance program during the COVID-19 crisis.
In fact, the research found that when boards effectively supported compliance programs during the crisis, the department was 2.6 times more likely to have played a role in the organization’s COVID-19 response than in organizations where the board was not supportive. Similarly, companies with boards that support the compliance function were also 2.5 times more likely to emphasize company values rather than procedural rules, indicating the nurturing of an overall compliant culture. Overall, 82 percent of respondents agreed that their ethics and compliance program and culture was actually strengthened as a result of the pandemic.
Holding Senior Leadership Accountable
LRN’s survey found that when boards are known to hold leaders accountable for misconduct, 51 percent of those organizations actually disciplined or terminated an executive or high-performer in the past year. In contrast, only 18 percent of organizations whose boards are less engaged in ensuring accountability took such action in the past year—a magnitude difference of three times.
The survey also found that ethics and compliance professionals play a larger role in major business decisions when senior executives know their boards are likely to hold them accountable. Indeed, 61 percent of these organizations substantially modified or abandoned a business initiative in the past year due to ethics and compliance concerns, while only 20 percent of organizations with less engaged boards did so.
“A well-positioned board in this new world of work is one that views the health, sustainability, and ethical foundations of its culture as a strategic priority,” the report concluded.
Fielded from October 2020 to January 2021, the report was based on a survey of 627 ethics and compliance professionals at corporations and organizations with a minimum of 1,000 employees. 
Danny Flynn is assistant editor at Compliance Chief 360°.