CECO Power Assessment Tool: Do you have the power to do your job?

How empowered are you really?  When powerful corporate executives pursue illegal conduct, how well positioned are you to prevent misconduct?  Do you really have the power to protect the company?  Do you really have the power to protect others such as workers, customers, investors and the public from harm by your company?

Here is a scorecard for measuring how strong or weak your position is.[i]  

Powers:

1. Do you have a legally binding employment contract that protects your position? +10
2. Is there a board resolution establishing your office and providing empowerment? + 11
3. Does your termination, reduction in benefits or any other diminution of authority require prior board approval? + 10
4. Do you report to an independent board committee? +10
5. Are your salary and benefits at least equal to the average of the top 5 officers who report to the company’s CEO? +10
6. Is your bonus/incentive plan tied to compliance and ethics related factors, and not just immediate financial results? +5
7. Do you have input on any promotions of company executives? +8
8. Do you have any input on company incentives/bonuses? +7
9. Are you brought in on important matters, such as M&A and corporate strategy, in the same advance stages as other senior, C-suite officers, and before decisions are made? +7
10. Do you have the power to open and control investigations? +7
11. Is your office located in the C-suite? +10
12. Do you have authority over the field C&E people, e.g., do you have any say on their pay, removal and evaluations? +7
13. Are you required to report to the board regarding points enumerated by the board? +5
14. Does the company’s board include a CECO from another company? +11
15. Are you allowed to join and be active in C&E professional organizations? +5
16. Are you allowed to attend, and are expenses covered for C&E professional meetings/conventions/training? + 7
17. Are you empowered by and required to follow professional C&E ethical standards? +5
18. Are you covered by D&O insurance? +8
19. What is the number of your personal appearances annually before an independent board committee? +2 for each, up to +10
20. What is the total approximate amount of time you spend presenting to a board committee and/or the board each year? +1 for each total hour up to +7
21. What is the total number of meals or coffee meetings you spend annually with any independent board members? +1 each, up to +7
22. Are you required to report to the board when recommendations you make are not followed? +12
23. Have you been certified in C&E by any C&E professional organization? +3
24. Are you subject to any ongoing C&E certification requirements, including attending continuing professional education? +2
25. Do you have unfettered access to all company data (except as limited by law)? +6
26. Do you have unfettered access to all company facilities (except as limited by law)? +5
27. Do you have comparable priority and access to resources, such as staff and technology, as that given to other C-suite officers? +10
28. Is there a lawyer specially designated to support the C&E program? +6
29. Is the Board’s compensation committee required to have the CECO’s input on its evaluations of executives? +12
30. Are you listed in a company annual report as a senior officer? +12
31. For listed public companies would your removal require filing of a public notification (e.g., an 8K in the US)? +10
32. Do you have a sufficient travel budget to visit company locations outside of HQ? +6
33. Do you have access to outside legal counsel/outside advisors without approval of the GC?  +12
34. Do you serve on the board of any other company, not affiliated with your employer? +12

Weaknesses:

1. Do you report to or are you otherwise subordinate to the GC? – 10
2. Do you report to a lawyer below GC (this is cumulative to item 1)? – 10
3. Are you subject to a professional standard or other restriction that bars you from stating publicly why you were terminated? – 7
4. Are you subject to a professional standard or other restriction that bars you from suing your employer for retaliation or other improper reasons for your termination? – 7
5. Are your reports to the board subject to approval/required edits by the GC or any other lawyer? – 12
6. Are there any people with power in the organization who have successfully claimed exemption from compliance activities, such as training, compliance disclosures, and/or participation in investigations? -15
7. Is compliance and ethics splintered so that there are compliance and ethics areas that are entirely outside of your responsibility and where you have no say or input? -12
8. Is your desk located among mid-level managers? – 12
9. Do you have no personal contacts with board members, and do they not know who you are? – 10
10. Are you a dumping ground for other, random things that others don’t want? -5
11. Are you a dumping ground for other, random things that others don’t want, and without any additional resources? (this is cumulative to item 10)? -10

Best possible score: + 275   |   Worst possible score: – 110

[i] Terms used here:  C&E – Compliance & Ethics; GC – General Counsel; CECO – Chief Ethics and Compliance Officer.  Compliance officer or CECO does not include anyone (a) already holding another corporate officer position, and (b) only performing the C&E function part-time.  This test excludes smaller organizations. C&E is essential in all organizations, but power dynamics are qualitatively different in small groups.  In those smaller groups, one or two leaders typically control most or all power. Note that CECO empowerment is an extremely important element of an effective C&E program, but this test only measures CECO strength, and not the actual effectiveness of any C&E program.