Organizations must adhere to a complex set of laws and regulations. The board of directors must ensure that its members act ethically, transparently, and always in the organization's best interest. To achieve this, it must implement control measures, practices, and/or policies to ensure compliance with applicable standards. Maintaining high ethical standards within the organization remains a challenge; however, it is essential to build stakeholder trust, minimize legal risks, and promote responsible governance.
To safeguard the integrity of decision-making, the board of directors must identify, manage, and mitigate potential conflicts of interest. Conflicts of interest arise when board members have personal, financial, or professional interests that could influence their ability to make objective decisions in the organization's interest. Effective management of conflicts of interest within the board prevents bias or inappropriate decision-making.
It is highly recommended, and even mandatory for some organizations, to establish a clear and comprehensive code of conduct and ethics for board members. This code defines the organization's fundamental values, expected ethical standards, and unacceptable behaviors. Each board member is advised to understand, accept, and formally sign this code. Additionally, the board of directors can integrate ethics into its self-assessment process by regularly evaluating the board's performance in ethics and identifying areas requiring improvement. Other assessments, such as an annual review and/or audits, can be implemented depending on the governance structure and the board's needs.
Panorama promotes ethical standards, among other things, by preserving information integrity through various processes and automation, allowing secure access management.
As mentioned earlier, it is crucial to implement specific measures for conflict of interest management to prevent bias or inappropriate decision-making.
The board of directors can establish and enforce a rigorous conflict of interest policy. This policy should require board members to disclose all potential conflicts of interest and abstain from participating in decisions where they have a personal interest. The board or the ethics committee could, among other things, establish clear disciplinary sanctions in the case of a serious violation of the code of conduct or ethical standards. These sanctions should be applied fairly and transparently. Additionally, ethics training for board members can be a solution to raise awareness about ethical and informed decision-making.
