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  • M. (Martin) van Manen

Corporate integrity: why supervisory boards should start asking questions

Author M. (Martin) van Manen

The recent media storms surrounding transgressive behaviour in organizations also expose the role of supervisory board members. Where do they stand in these kinds of integrity incidents? What role and responsibility do they actually have? Work to be done, writes Martin van Manen.

Regulatory and supervisory bodies come in many shapes and sizes. In addition to external organisations such as Dutch Central Bank (DNB), Financial Markets Authority (AFM) and Authority for Consumers and Markets (ACM), the Netherlands has an impressive number of internal supervisory boards (hereafter: supervisors) who monitor the ins and outs of an equally impressive number of organisations 'from within'. Ranging from large international corporates to cultural institutions in a village. The domain they have to supervise is growing, both in size and complexity. Integrity as a topic is not new to them. After all, when it comes to fraud and corruption, for example, they have already had to monitor compliance with rules in the past. Have recent media storms around transgressive behaviour and undesirable behaviour clearly positioned integrity as an item on their agenda?

The Maserati man

Fifteen years ago, Dutch housing association Rochdale filed a complaint against one of its directors, later known as 'the Maserati man', who, among other things, diverted the money for the purchase of the car from the employer. Dutch court sentenced the director to two and a half years in prison, for embezzlement, fraud, bribery, money laundering, tax evasion and perjury. Since then, a lot of work has been done to combat fraud and corruption in that sector. In 2010, for example, the housing associations published a handbook Tussen Regels en Gedrag (Between Rules and Behaviour). Last year the handbook was updated and renamed Handreiking Integriteit (Integrity Guide). In the chapter 'Who does What?' one can read what the Supervisory Board’s role is: '[..] every supervisor has an exemplary role in the field of integrity'. And also: '[..] the responsibility for the theme of integrity can be assigned to the audit or governance committee if it is present.'

The guide ends with the advice to 'put integrity on the agenda of the Supervisory Board at least once a year, looking both back and forward to possibly set new accents'.

Responsibility for all supervisors

A wonderful first step, such a guide. Better something than nothing. However, supervisors are not going to make it with the suggestions in the guide. By ‘outsourcing’ the integrity topic to an audit or governance committee, the first turn is already taken incorrectly. Subjects such as integrity, ethics, norms and values should be top of mind for supervisors, as should the themes of strategy and identity.

And what about the proposed frequency of putting the of the item integrity on the agenda? Once a year is too little, too late it seems to me. My advice would be to plan multiple meetings for looking back and forward. And don't just look at incidents happened. As a supervisor, discuss the organization’s vulnerability profile and its integrity policies. And continue asking whether integrity analyses have been carried out, what the results are, how controls work, which red flags have been detected and what can be learned from incidents.

Supervision starts with asking questions

Supervisors should ask questions rather than providing answers. Quite an art, especially when it comes to an unruly theme such as integrity.

Recently the readable book ‘Socrates op sneakers - Filosofische gids voor het stellen van vragen’ (freely translated: Socrates on sneakers - Philosophical guide for posing questions) by author Elke Wiss has been published. Supervisors: take your role and start questioning!

For the print version of this article, click here.


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