Integrity in the boardroom: What does it really mean?

03/2013 Deloitte

Integrity is critical to an organization’s culture and a requirement for effective dynamics in the boardroom. In view of recent headlines, a valid question is: What is integrity? Merriam-Webster defines integrity as “firm adherence to a code of especially moral or artistic values.” This, in turn, raises the question: Whose values? Mine? The organization’s? Society’s? All of these?

An effective board is concerned about integrity inside and outside the boardroom. It leads by example. The board plays a role in working with the CEO to help set the ethical tenor for the organization. It also promotes and monitors compliance with laws, regulations, and organizational policies. Integrity in the boardroom is based on factors such as organizational values, the need to uphold the board’s fiduciary responsibilities, and a willingness to be accountable.

A commitment to performance with integrity is widely recognized as a “must have” in organizations, yet many people and organizations struggle to put this ideal into practice. Board governance structures and practices should promote a corporate culture of integrity and ethics, coupled with corporate, environmental, and social responsibility. The board should help to build trust and long-term relationships with shareholders, customers, regulators, and employees.

The board’s role in maintaining integrity includes working with the CEO to establish the right tone at the top, understanding compliance requirements, and establishing expectations for senior management, which then cascade to the entire organization. In addition, the board holds senior management accountable for meeting such expectations…Continue reading

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