Corporate Eye

Wanted a Chief Governance Officer…With Teeth

Th 2008 REPORT TO THE PRESIDENT CORPORATE FRAUD TASK FORCE contains the following statement:

“Since July 2002, the Department of Justice has obtained nearly 1,300 corporate fraud convictions. These figures include convictions of more than 200 chief executive officers and corporate presidents, more than 120 corporate vice presidents, and more than 50 chief financial officers.”

Not a favorable assessment of the state of Corporate Governance practices. While there may have been some advances in corporate transparency, seems there is more work to be done.

The key is not the regulations, laws and other requirements placed on organizations. Commentators have been repeatedly saying that “you can’t legislate compliance”. The problem is in the daily internal operations that take place. Enter the Chief Governance Officer (CGO).

Simply put the role of the CGO is —

As the governance officer, I see my role as a planner, educator and implementor. As a planner, together with my team of five, we are tasked to draw the corporate governance landscape for the company. As an educator, we are mandated to communicate and educate our co-employees and managers on the why, what and how of corporate governance. As an implementor, we will ensure together with Legal, Internal Audit and HR that our policies and processes are followed.An Interview with Atty. Rene G. Bañez, Chief Governance Officer, Philippine Long Distance Telephone Co. Managing Corporate Governance in Asia Volume 131 September 2005

More substantive job descriptions may be accessed —

This site has many examples of job descriptions. While on the site download “The End of Law The Rise of Values”

If you asked a company leader the purpose of the organization’s values, he or she would probably tell you that they dictate a standard of workplace conduct that will benefit the company and the internal and external communities it serves. At their essence, most organizational values relate to some core behavioral principles: tell the truth, take complaints seriously, follow problems through, treat customers and employees fairly, and watch what you say and how you say it. These are simple concepts, but somewhere along the way, companies seem to be getting off track when it comes to integrating the values into the workplace culture. There are too many scandals and incidences of outrageous conduct to think otherwise.

A must read that sets the tone for the Chief Governance Officer’s philosophical underpinnings.

Some essential aspects of this position —

  • It must report directly to the CEO and the Board and set the Board agenda on governance matters
  • The position must not be an adjunct to an existing officer, Chief Counsel, CFO, etc.
  • It must be a function that has an influence on all corporate departments
  • This is a serious position and not merely for window dressing
  • The corporate code of ethics and all matters of ethics and integrity are part of the CGO’s role
  • The person filling this position must have or develop a reputation of uncompromising integrity

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In sum this position has clout and TEETH. A good article on the CGO is “The Chief Governance Officer: To Have or Have Not?”

This position adds to the company’s public perception that it is serious about doing business in a manner that surpasses mere compliance with legal and regulatory requirements.

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Ed Konczal has an MBA from New York University's Stern School of Business (with distinction). He has spent the last 10 years as an executive consultant focusing on human resources, leadership, market research, and business planning. Ed has over 10 years of top-level experience from AT&T in the areas of new ventures and business planning. He is co-author of the book "Simple Stories for Leadership Insight," published by University Press of America.
 
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