March 15, 2023 - 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.”