Executives and board members are subject to new levels of personal responsibility and liability every day.
Regulatory authorities have made it clear they intend to focus on individual accountability (ref1, ref2). This issue alone should provide enough motivation for boards to pay more attention to compliance oversight and accountability!
The regulators and auditors for compliance in listed companies (OIG, ECB) define “reasonable oversight” for effectiveness of corporate compliance programs and recommend some of the “right questions” to ask the Compliance Officer, namely:
Board Meetings can take some time and decisions may take too long, impacting execution and strategic goals achieved, or worst, implying penalties by regulators (ref3). This means accountability concerns must be raised and a good governance must be in place for the agendas of Board Meetings. Transparency and an excellent communication within board members is key to successful organizations!
Innovation and Technology can provide the necessary infra-structure and support for compliance procedures and governance model, with high security standards and agility.
Executives should have in mind all the best practices and be prepared for high scrutiny, being crucial the capability to provide to readers, such as government investigators and auditors, the necessary detail and information records, namely in meeting minutes.
The minutes should evidence compliance with notice provisions and entitle reliance under the business judgment rule. Minutes should also reflect all decisions, those either to take or not to take action. This way, auditors will have more insight that may prevent further investigation.
The corporate minutes must provide the intended audience all necessary details and protect against giving a cause of action to the other. Saying enough is needed, but not more than enough, represents a best practice.
Article written by Bruno Valente e Costa, Banking Senior Manager at Infosistema