The Handbook of Board Governance, 3rd Edition

39Board Risk and Responsibility Under Regulatory and Criminal Law

Norm Keith, B.A., J.D., LL.M., CRSP

Partner in KPMG Law LLP

1. Board Governance, Regulatory and Criminal Law

The subject of corporate governance as it relates regulatory and criminal law enforcement is often uncomfortable and even foreign to many boards of directors. This subject is critical for directors’ personal knowledge and compliance decisions. As my friend and colleague Dr. Richard Leblanc¹ has said, excellence in board governance requires diversity of understanding of the drivers of good corporate governance. However, the recent recruitment trend for directors has lacked the diversity of expertise in the drivers of environmental, social, and governance (ESG) factors. As a result, very few boards have experts in environmental, human capital, regulatory and criminal law standards, and enforcement. This is also painfully clear when it comes to a general lack of knowledge by directors of regulatory and criminal risk and risk mitigation. This lack of ESG knowledge and expertise at the board level has put boards, individual directors, and organizations at greater risk of regulatory and criminal liability.

The purpose of this chapter is to provide directors with a fundamental understanding of ESG, regulatory and criminal law standards, enforcement, and risk mitigation. ESG factors are increasingly moving from voluntary standards to mandatory, regulated standards. This is not only of vital importance for all ...