Principles of the Law, Compliance, Risk Management, and Enforcement
The following entry is excerpted from the Black Letter of Tentative Draft No. 1, § 3.07 The Role of the Board of Directors and Executive Management in Promoting an Organizational Culture of Compliance and Risk Management.
The full draft contains Comments. This draft will be presented to membership at the 2019 Annual Meeting for approval. Until approved, this is not the position of The American Law Institute and should not be represented as such.
§ 3.07. The Role of the Board of Directors and Executive Management in Promoting an Organizational Culture of Compliance and Risk Management
(a) The board of directors and executive management should promote an organizational culture of compliance and sound risk management.
(b) To promote this culture, among other ways, the directors and executive management should:
(1) approve the values represented in the compliance policies and procedures, the ethical standards in the code of ethics, and the risk culture in the risk-management program;
(2) satisfy themselves that the organization’s practices foster these values, standards, and risk culture;
(3) be assured that employees and agents of the organization are willing to adhere to, and their organizational activities reflect, these values, standards, and risk culture; and
(4) communicate, and demonstrate by their actions, adherence to these values, standards, and risk culture throughout the organization, to all its employees and agents, and, if appropriate, to those outside the organization.