"Strong ethical cultures self-regulate" said Brown during Midi Summit held at Acuity Brands, Inc.
March 14, 2006 – Atlanta, GA—Gary Brown, chair of the Corporate Department at Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., and a member of the Midi Ethics and Law Advisors, focused on the need for increased corporate trust in America's business community, while speaking at a Midi Compliance and Ethics Summit held at Midi client Acuity Brands, Inc. in Atlanta, GA. The way to get there, Brown argued, is to increase the role of boards of directors in the area of corporate ethics.
Citing the plethora of recent corporate scandals, the 2004 revisions to the Federal Sentencing Guidelines, and the advent of Sarbanes Oxley legislation, Brown discussed what he called the "Trust Deficit." "There has been an extraordinary loss of trust in corporations and their leaders," he said.
As chair of the Corporate Department at Baker, Donelson, Brown has extensive experience in conducting training for boards of directors about their fiduciary duties. In addition, since 1994, Brown has taught corporate and securities law at the Vanderbilt University School of Law, and has been a frequent instructor at securities programs for the Practising Law Institute (PLI); he also authors PLI's treatise Understanding the Securities Laws. During 2002, Brown served as Special Counsel (Minority) to the United States Senate's Governmental Affairs Committee in its investigation of the collapse of Enron Corp. While serving in the Senate, he also worked with the Committee's Permanent Subcommittee on Investigations ("PSI") and provided advice on aspects of the Sarbanes-Oxley Act while the legislation was being debated in the Senate.
The cure for today's trust deficit, according to Brown, is to instill ethics into corporate cultures. "Boards of directors need to make it part of the "DNA" of organizations," he said.
Boards of directors must be more involved in the cultures of the organizations they govern, according to Brown. "Strong, ethical cultures self-regulate," he said. "Maintaining high ethical standards also provides the greatest protection of shareholder value and, consequently, of directors."
According to Brown, board members should monitor the cultures of the organizations they govern. Among the things that he suggested as tips for directors:
- Read the reports of analysts who cover the company; feel free to ask the analysts questions if the reports seem at odds with what the board members are hearing in the boardroom or what is reflected in the company's reports.
- Given the history with "whistleblowers," ensure that whistleblowers are heeded when appropriate and protected from retaliation.
- Understand that good corporate governance is more than about "checking the box" and that structure does not replace judgment.
Interactive courseware for board members
Midi and Brown are working together to produce interactive courseware for boards of directors that may be delivered by third-party experts, such as Brown, or by an organization's general counsel or chief compliance officer. The new Midi course, Board Responsibilities, will be customizable according to the industry and specific issues a company faces. "Boards need to be reminded of their responsibilities," said Brown. "The course we are creating helps board members to understand both what their responsibilities are, and the penalties that are possible should governance fall short." The Midi course will be available in April 2006.
Midi also provides an ethics curriculum to its client companies, which includes the courses Ethical Decision Making, created in partnership with the Institute for Global Ethics; Ethical Leadership, which focuses on the role of managers and supervisors in promoting an ethical culture; and Ethical Moments®, which are five-minute, scenario-based communication vehicles delivered monthly and accessed via email. Ethical Moments serve to keep ethics and compliance "top of mind" for employees.
About Acuity Brands, Inc.
Acuity Brands, Inc., with fiscal year 2005 net sales of approximately $2.2 billion, is comprised of Acuity Brands Lighting and Acuity Specialty Products. Acuity Brands Lighting is one of the world's leading providers of lighting fixtures and includes brands such as Lithonia Lighting®, Holophane®, Peerless®, Hydrel®, American Electric Lighting®, and Gotham®. Acuity Specialty Products is a leading provider of specialty chemicals and includes brands such as Zep®, Zep Commercial®, Enforcer®, and Selig™. Headquartered in Atlanta, Georgia, Acuity Brands has operations throughout North America and in Europe and Asia.
About Midi
Midi is a leading provider of enterprise-wide compliance and ethics solutions for Global 2000 companies. Midi Global Solutions provide organizations with the compliance and ethics consulting expertise, technology, globally relevant courseware, and program management tools they need to reduce legal risk and enrich a consistent culture of compliance and ethics worldwide, leading to enhanced corporate trust. Midi clients include leading organizations across multiple industries, including Acuity Brands, Inc., Lockheed Martin, Boeing, Ingersoll Rand, Aon Service Corporation, Revlon, Cadence, Terex, General Motors, Rolls-Royce, Microsoft, and First Data, among many others. Midi Solutions and courseware are deliverable in up to 130 languages.