Corporate Governance: The Unfiltered Truth.

Author:Penman, Carrie

* Corporate governance and "long-termism" are key buzzwords in our modern fiduciary lexicon. Between the first quarter and fiscal year 2018 and the second quarter of 2019, governance deficiencies were responsible for the highest number of enforcement occurrences across major financial services regulators, according to research from global professional services firm Navigant.

We know that business follows the money, and the money is now looking toward governance as a long-term indicator of return.

To effectively deliver on corporate governance, organizational leadership needs the ability to reliably access, interpret and act on information. Increasingly, this requires integrating non-financial data to allow board members a more holistic view of the firm's overall strategy, risks and performance.

Board members understand that good corporate governance is paramount and that they are accountable for it, though many are not confident they have adequate information. They have more than they realize. There is an often-underutilized information stream available to executive teams and boards--internal hotline data.

Information surrounding internal employee reports to whistleblower hotlines and helplines--specifically, how many there are, where they are, and who and what they are about--can provide boards with valuable insight into their organization's culture and its compliance program. While such data is typically reviewed by the audit or compliance committee, it is often done so in a vacuum and the higher-level learnings or predictive abilities are not recognized or utilized. Board members who take the time to learn how to interpret and act on such data have an additional source of unfiltered by management governance information.

Board members are paying increased attention to risk management and reputation issues, especially after ongoing and very public corporate scandals, +and the resulting negative impact on company performance. Boards also are attuned to public opinion, as the percentage of Americans professing to have a "great deal" or "quite a lot" of trust in large businesses sits at 23 percent, placing them among the nation's least-trusted institutions, according to Gallup.

Simultaneously, we've seen surges in the number and sophistication of laws and regulations governing matters of corporate ethics and compliance, specifically about whistleblowing. That includes the Department of Justice's Evaluation of Corporate Compliance Programs...

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