By Kirk O. Hanson
Markkula Center for Applied Ethics Blog
Originally published August 14, 2014
Most corporate boards have learned to act quickly when a scandal breaks. General Motors’ board is moving much more quickly to clean up the fallout from its vehicles’ ignition failures than Toyota’s board did to address its rapid acceleration problems of several years ago. It is now the rare board that doesn’t launch an independent investigation quickly when misbehavior is reported.
But the responsibility of the board to prevent scandals is more important than the responsibility to clean up the mess once it has emerged. Here most boards are still at the starting gate. Recent legislation and guidance embodied in the Federal Sentencing Guidelines clearly require the board to take a key role in preventing ethics failures before they happened. This is more complicated than calling in the outside lawyers once disaster happens.
The entire article is here.