If culture cannot come to compliance, then compliance must come to rescue
the corporate culture. Part I of III
When a corporate fraud or scandal is revealed, what
shocks the stakeholders most is often the bold defiance of the deception
followed by the lack of governance, oversight and management that allowed
it to happen.
The significant concerns of the deception
are that the management and board were unaware of the lack of monitoring,
that high ethical standard that is the fundament of Governance, Risk and
Compliance (GRC) processes in the organisation were not monitored. Furthermore,
an embedded regulatory environment that makes it possible to identify
the GRC offences and discipline the violators and enforce integrity was
not in place either.
Global two-tier management system.
Besides the diesel deceiving caused by the Volkswagen emissions scandal,
there are other global scandals e.g. Petrobras and FIFA corruption scandal,
followed by the Toshiba accounting scandal in 2015. The Toshiba scandal
occurred soon after the Olympus scandal that required that the traditional
Japanese governance model is changed. The Japanese board of directors
do not actively run and manage the company anymore, but instead, focus
on the monitoring and supervision of management as in the global two-tier
management system.
Deutsche Bank Deutsche Bank AG, Germany's biggest lender, posted a 2.1
billion-euro loss for a quarter and was forced to accrue for legal matters
and restructuring charges. The bank stock is at the lowest since 2009.
The losses are primarily due to the dispute of several regulatory compliance
probes and alleged misconduct due to the industry's manipulation of currency
exchange rates and precious metals trading and mortgage-backed securities.
Analysis of values for insight, culture, nature of the significant
risks
Bad Corporate Governance often signals concern for the board and management
to identify the broken 'governance', components of ethics and integrity.
There is a need for an annual analysis of corporate values that is capable
of providing the insight, culture, nature of the significant risks.
The annual review of the governance processes can evaluate their corporate
vulnerability, with a systematic evaluation to look for symptoms of bad
management behaviour and identify the key risk areas. Most of the above
strategic governance planning, with operating control points, and vigilant
monitoring and audit traceability and documentation, allows for proper
disclosure of the GRC procedure violations to the board of directors.
The tone-at-the-top provides strategic direction
Governance culture components of Ethics and Integrity can be defined as
the attitudes and actions required to build a sustainable, reliable and
competitive company that enhances stakeholder value. The tone-at-the-top
provides the strategic direction so that management can ensure that the
strategy is embedded into business processes practices with the right
leadership capabilities at every level.
The Copenhagen Compliance ® methodology on the annual Ethics and Integrity
review is a check-up of the healthy governance culture to create a reputational
and business advantage based on the fact that business done and the ethical
principles of the management and employees, in general, create sustainable
value for all stakeholders.
For more details see: http://www.copenhagencompliance.com/Responsible-Ethics-&-Integrity-Brochure.pdf
