THE SUPERVISORY DIRECTOR AND INTEGRITY

On integrity policy, integrity violations and the role of supervisory directors

INTEGRITY POLICY

Every organisation, whether it operates in the private, semi-public or public domain, has a social responsibility arising from its role in society, the products or services it provides, and its relationship with the people and parties with which it works. Given the many interests involved, all organisations will also face conflicting interests and situations in which decisions must be made and priorities set. Organisations have a responsibility to themselves and to their environment to act with integrity in their dealings with stakeholders. This does not happen automatically – it requires deliberate policy. Companies that recognise the importance of integrity and take appropriate measures perform better, enjoy greater trust among customers, investors and employees, and have a better reputation on the labour market. Integrity policy also contributes to social safety and therefore helps to reduce, for example, the risk of absenteeism due to psychosocial stress at work. Integrity policy helps to promote integrity and prevents integrity violations and misconduct affecting society.

Involvement in an integrity violation

An organisation’s involvement in an actual or alleged integrity violation can have significant consequences. It can lead to reputational damage, disruption to operational processes and financial damage for the organisation. An integrity violation can also have personal consequences for the supervisory director. For example, they may be held liable for the resulting damage. An integrity violation may also require a management board member and/or supervisory director to resign, and may even jeopardise the continuity of the company. Risks associated with a lack of integrity within and by the company are therefore of strategic importance.

The role of supervisory directors

As a supervisory director, you may be wondering what your role is in relation to the integrity policy of the organisation you supervise. Are you sufficiently informed about it? And do you know what role you have in that regard as a supervisory director, both formally and informally?

Considerations

As a check, consider your ability to answer the following questions individually– or, better still, together with your fellow supervisory directors:

  1. Are the organisation’s values, norms, and expectations regarding integrity and appropriate behaviour clear to everyone in the organisation?
  2. Do we understand the extent to which the organisational culture and integrity policy support integrity, and the elements that make up the integrity policy?
  3. Have we ensured that signals of possible integrity violations can be reported in a safe reporting climate?
  4. Do the Management Board and Supervisory Board have a decision-making process for handling dilemmas, and have they used it in practice?
  5. What does the integrity governance look like?

Every supervisory director should be able to answer these and similar questions. If you can, you are probably already well informed about and involved in the integrity policy. If not, there is still work to be done.