Chapter Twenty-Two

Reinforcing Compliance and Controls

CONSISTENT WITH THEIR ROLE IN RISK MANAGEMENT, CFOs are charged with the responsibility to encourage and perpetuate a focus on compliance and controls. This has always been a priority for CFOs, but undoubtedly this focus has become much more important since the adoption of Sarbanes-Oxley and the greater emphasis on enterprise risk management.

Boards of directors are acutely sensitive to regulatory trends in jurisdictions throughout the world and recognize that any lapses in compliance and controls can cause significant damage to a company's reputation and financial well-being.

U.S. companies are especially mindful of the “Federal Sentencing Guidelines” that apply to both public and private companies, including non-profits and specify that an organization shall:

1. Exercise due diligence to prevent and detect criminal conduct; and
2. Otherwise promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.1


CFOs can play a major role in creating and reinforcing healthy control environments that meet the heightened expectations of today's regulatory climate. Along with the CEO and management team, they can influence the company's adherence to high standards by setting a positive “tone at the top,” promulgating a “code of conduct,” and establishing a “zero tolerance” attitude.

Tone at the Top

The CFO's role begins with setting a “tone at the top” where his ...

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