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Internal Texts, Emails Increasingly Targeted in Lawsuits
What are the underlying risks of personal devices and the board of directors’ responsibilities to oversee these risks? Eric T. Young gave his perspective to Agenda Week, a Financial Times company, saying that companies are already expected to have robust compliance risk assessment programs and evaluate higher-risk products, customers and geographies under the U.S. Department of Justice’s and other agencies’ guidelines.
Therefore, companies should already “conduct background checks and investigations of companies and other third parties with whom they conduct business,” he said.
However, if a company should proceed in conducting higher-risk activities, Eric said that “stronger controls including enhanced supervision and monitoring of all business-related employee communications is essential.”
He also said that it is common for companies in the financial services industry to require all forms of business communications to be monitored through the use of surveillance technology to record and flag behavioral trends signaling misconduct, but the practice is increasing across other nonfinancial industries. Directors, he said, should be taking a role in overseeing communications.
“Boards have a fiduciary duty of loyalty to shareholders and other stakeholders, but also a fiduciary duty of care and oversight requiring knowledge and governance over a company’s and its management’s compliance with laws, regulations and ethical conduct. The board should oversee and management should investigate the red flags by such monitoring promptly, especially where serious crimes might be committed or unsafe activities might be occurring.”
(Paywall)
Eric Young
Senior Managing Director
Eric T. Young advises highly regulated organizations on reengineering compliance, ethics, and regulatory technology programs to enable reputable and sustainable business growth. He has deep regulatory experience having spent close to 40 years in chief compliance officer roles at some of the world’s largest institutions, including five global banks. Throughout his career, Mr. Young has remediated and transformed corporate compliance programs and financial crime compliance programs including sanctions; integrated compliance and ethics cultures between regions, countries and companies to ensure consistency across enterprises; built compliance budgets; enhanced reporting; created governance frameworks and risk assessment, monitoring and testing programs; closed compliance gaps; restructured compliance teams; and mentored junior staff to create a pipeline of future compliance leaders and enable grassroots compliance ideas, solutions and digital upgrades.
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