Perspectives of Chief Ethics and Compliance Officers on the Detection and Prevention of Corporate Misdeeds: What the Policy Community Should Know

Perspectives of Chief Ethics and Compliance Officers on the Detection and Prevention of Corporate Misdeeds: What the Policy Community Should Know

Perspectives of Chief Ethics and Compliance Officers on the Detection and Prevention of Corporate Misdeeds: What the Policy Community Should Know

Perspectives of Chief Ethics and Compliance Officers on the Detection and Prevention of Corporate Misdeeds: What the Policy Community Should Know

Synopsis

In March 2009, RAND convened a conference on the role and perspectives of corporate chief ethics and compliance officers (CECOs). The discussions featured input from current and former officers and other stakeholders in the nonprofit sector, academia, and government. Themes included the unique position of CECOs in corporate management, the relevance of ethics and culture as a prophylaxis to malfeasance, and the importance of open communication and employee reporting in guarding against fraud and misconduct.

Excerpt

On March 5, 2009, RAND convened a conference in Washington, D.C., on the role and perspective of corporate chief ethics and compliance officers (CECOs), in supporting organizations in the detection and prevention of corporate misdeeds. The conference brought together thought leaders from among ethics and compliance officers in the corporate community, as well as stakeholders from the nonprofit sector, academia, and government. Discussions focused on the challenges facing corporate ethics and compliance programs as a first line of defense against malfeasance and misbehavior; on the role of chief ethics and compliance officers as champions for implementation within their companies; and on potential steps that might be taken by government to empower chief ethics and compliance officers, and by extension, the corporate ethics and compliance programs that they oversee.

Improvements in corporate compliance, ethics, and oversight have been a significant policy goal for the U.S. government at least since the enactment of the U.S. Federal Sentencing Guidelines in 1991 and of the Sarbanes-Oxley Act in 2002. Notwithstanding these earlier legislative and regulatory initiatives, the collapse of financial markets in late 2008 has invited renewed questions about the governance, compliance, and ethics practices of firms throughout the U.S. economy. The purpose of the March 2009 RAND conference was to stimulate a broad discussion about companies’ corporate ethics and compliance programs, drawing on the expertise of persons directly involved in marshaling and leading those programs. The discussion offers an important perspective and set of insights for government policymakers as they reflect on how best to respond to the economic crisis with new regulatory initiatives, and on how the institutional lever offered by CECOs can be employed to drive positive change within private-sector organizations.

These RAND conference proceedings summarize key issues and topics from the discussion sessions held on March 5. The document is not intended to be a transcript, and instead organizes the major themes of discussion by topic — in particular, pointing out areas of agreement as well as disagreement. With the exception of three invited papers that were written in advance, presented by conference participants, and are included without edit in an appendix to this document, we do not attribute any specific remarks to specific persons who participated in the conference.

These proceedings should be of interest to stakeholders with any connection to corporate ethics, compliance, and governance practices in the United States, and particularly to those responsible for crafting U.S. regulatory policy connected with these issues.

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