Top Five Mistakes in Ethics & Compliance Board Reporting

An outstanding board reporting strategy can help ethics and compliance professionals engage boards and gain significant program support. Conversely, board reporting strategies that are not finely tuned can unintentionally downplay or even undermine an ethics and compliance program’s credibility—no matter how successful the program truly is.

In a new whitepaper, Randy Stephens with NAVEX Global’s Advisory Services Team shares best practices—gleaned from his interactions with compliance professionals at hundreds of organizations across the country—for what works, and what falls flat when it comes to board reporting.

Here, Stephens shares his insights on the most common board reporting mistakes, and how to avoid them.

Mistake #1: Information Overload

“Mature ethics and compliance programs never lack for content to share,” says Stephens. “But when a board receives reports that are packed with too much information, it can desensitize them to the accomplishments and challenges a program has faced and overcome.”

Lessons Learned: Always start with an executive summary and context. Include only the most crucial, relevant content in board reports—such as addressing the status and effectiveness of ethics and compliance structure and leadership; standards and procedures; and auditing and monitoring. Save the detail for the Appendix.

Mistake #2: Missing the Point

Board members are accustomed to receiving information that has been filtered and honed specifically for their use.  Boards are looking for information that is relevant to their specific role, and will help them to best accomplish their responsibilities to the organization.  They are not running the details of the program. The Board Report is your chance to show them that you are!

Lessons Learned: Ideally, structure reports around guidelines such as the United States Federal Sentencing Guidelines for Organizations (FSG) or OECD. “This will help ensure that the report closely aligns with the board’s oversight obligations,” says Stephens.

Mistake #3: Underwhelming Report Design & Structure 

Looks aren’t everything, but, when it comes to board reporting, they’re pretty important. A report that is smartly structured and has a professional look and feel will carry more weight than a report that is poorly organized and designed.

Lessons Learned: Look at your reports through the eyes of a board member.  Is it easy for them to find and understand the information that’s most important to them? If not, consider going back to the drawing board.  “Best practice is to ensure that the report is consistent, strategic, provides context, and is outcome driven,” says Stephens. (For more details on these recommendations, download the whitepaper.)

Mistake #4: Reporting at the Wrong Frequency

Boards should receive regular reports on ethics and compliance program results. The industry best practice is to deliver at least quarterly reports, and an annual report. Missed or late reports can compromise the program’s reputation with the board.

Lessons Learned: “The best thing you can do is to follow best practices for reporting frequency, and ask for feedback,” says Stephens. Some boards might appreciate “special reports” that focus on an area of particular importance to the organization, such as anti-bribery and corruption. The best way to find out what the optimal approach is for your board is to ask.

Mistake #5: Overlooking Board Engagement Opportunities

Board reporting creates regular contact between compliance professionals and the board—contact that should be leveraged to deepen and broaden the relationship between the two. “The best compliance programs are often coupled with a very engaged board and a healthy relationship between the board and the CCO,” says Stephens. “Engaged boards can help extend and expand the compliance program while also enhancing both top-down support and bottom-up buy-in.”

Lessons Learned:  Engage in regular dialogue with the board to explain and refine the information presented in board reports. This will help the information resonate to the greatest degree possible with board members, and further cement the trust and respect the board has for the accomplishments of the company’s compliance program.

Bottom Line: View Board Reports as a Starting Point, Not the End Game

By avoiding these common mistakes and engaging with the board, compliance professionals are not only supporting their programs, but supporting a healthier corporate culture.  “Treat the board report as a starting point for the conversation,” says Stephens, “not the end game.”

For the full recommended list of board reporting recommendations and inclusions, download the whitepaper.

Chat with a solutions expert to learn how you can take your compliance program to the next level of maturity.

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