The World’s Most Ethical Boards: What top boards do differently

Summary

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Podcast Summary: The Corporate Director Podcast

Episode: The World’s Most Ethical Boards: What Top Boards Do Differently
Date: June 30, 2026
Host: Dottie Schindlinger (with co-hosts Megan Day & Kira Ciccarelli)
Guests: Erica Salmon Byrne (Chief Strategy Officer, Ethisphere) & Neta Madhav (VP Business & Product Strategy, Diligent; Founder, Vault Platform)

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Episode Overview

In this episode, the Diligent team dives into the recent Ethisphere and Diligent special report, Inside the World’s Most Ethical Boardrooms, exploring key practices and characteristics that set the most ethical boards apart. Guests Erica Salmon Byrne and Neta Madhav break down the rigorous criteria, concrete practices, and developing trends in board governance and ethics, including the increasing importance of AI governance. The episode delivers practical insights for directors aiming to elevate boardroom ethics, culture, and performance.

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Key Discussion Points & Insights

1. Setting the Context: Digital Trust & AI Governance

[01:45–06:00]

• Hosts share experiences from the Digital Trust Summit in Brussels, noting the EU’s proactive stance on AI regulation (notably the EU AI Act, effective August 2, 2026).
• Quote [03:21] – Dottie Schindlinger:
  “If you do business in the EU, you should kind of take a look at this and make sure you're ready. There's some real teeth to this law...including making sure that any part of your AI supply chain is in compliance.”

Takeaway: Ethical governance now includes AI, with new legal and reputational risks for boards to manage, especially in global companies.

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2. The World’s Most Ethical Companies List: Background

[07:54–11:59]

• Erica Salmon Byrne outlines the 20-year history of Ethisphere’s list, which celebrates companies quietly doing the right thing.
• The current process involves a rigorous survey (250–260 data points) covering governance, risk management, compliance, speak-up culture, third party management, and stakeholder impact.
• Recognizes 138 companies (2026 figures) across 47 industries and 19 countries, including nonprofits and private companies.

Quote [09:47] – Erica Salmon Byrne:
“We wanted to try to find a way to celebrate companies that were very quietly doing the right thing… Today’s companies look very different than companies 20 years ago.”

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3. Inside the World’s Most Ethical Boardrooms: Report Genesis

[12:17–14:15]

• Neta Madhav explains the collaboration between Ethisphere and Diligent, combining unique datasets for unprecedented insights into board operations.
• Focus on 20% of Ethisphere’s scoring now based specifically on governance, enabling identification of top-performing, “most ethical” boards.

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4. What Top Boards Do Differently

A) Independence & Diversity

[14:38–18:39]

• The most ethical boards aren’t just compliant on paper—they have higher standards for independence and diversity than average boards.
• Intangibles Now Dominate Company Value: 80–90% of value is in intangible assets (IP, brand, people, reputation).
• Board composition is directly tied to risk profiles and strategic needs.

Quote [16:55] – Erica Salmon Byrne:
“The best boards are then going that next step further and saying, why do we need these skills on the board?”

• Why Independence Matters: Boards must provide a check on management, especially in crisis scenarios.
• Diversity Drives Value:
  “In a world where your assets are intangible, your point of view is the thing that is the greatest value in those conversations.”
  – Erica Salmon Byrne [18:19]

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B) Ethics & Compliance Expertise

[19:04–21:58]

• Most ethical boards proactively recruit directors with direct ethics & compliance (E&C) leadership experience.
  • Across all honorees: Only 11% of directors have served as a chief ethics or compliance officer; among the top group, it's 14% (still low—room for improvement).
  • The best boards: multiple directors with operative E&C experience for deeper in-room literacy.
• Robust Information Flows:
  • 86% of most ethical boards hold interactive E&C sessions (case studies, tabletop exercises), vs. 52% of others.
  • 100% regularly receive independent reports and materials on ethics and compliance.

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C) Onboarding, Exposure, & Assessments

[21:58–25:59]

• Structured Director Onboarding:
  • Includes cross-functional orientation, site visits, and strategic exposure.
• Director and Committee Assessments:
  • Formal, skills-matrix-driven processes that support meaningful rotation and candid feedback.
• Rotation:
  • Committee chair rotations (not just overall board tenure tracking).
  • Lower average number of simultaneous board seats per director (2.5), allowing deeper engagement.

Quote [25:59] – Erica Salmon Byrne:
“If you know what it is you need on the board, you're then better able to figure out whether or not you are getting what you need on the board.”

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D) Continuous Ethics Conversations

[26:52–30:28]

• Regular, Methodical Attention: Boards should devote structured, ongoing time to E&C— inviting ethics officers, asking tough questions, and benchmarking progress.
• Tabletop Exercises: Suggested as vital, much like cyber risk scenarios.

Neta Madhav [28:53]:
“The board should be demanding quite a lot from its ethics team... Do our people actually trust the Speak up channels? How do you know?... How can we close the loop more quickly for the reporter?”

Erica Salmon Byrne [29:28]:
“Treat ethics and compliance-related tabletop exercises as seriously as they do cybersecurity exercises.”

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5. Looking Ahead: The Next Decade of Ethical Boards

[30:52–32:18]

• Dashboards & Data Integration:

  • Live, interactive, cross-functional dashboards will revolutionize the flow of information to directors.
  • “It’s not going to take us 10 years to get there.” – Erica Salmon Byrne [31:35]

• AI (Agentic Board Members):

  • Neta envisions AI “agents” serving as board members or expert advisors, adding domain expertise and new perspectives.

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6. Personal Reflections & Passion Projects

[33:48–36:06]

• Erica Salmon Byrne:
  • Improving collaboration between ethics/compliance and HR; seeing it as a major “value accelerator.”
• Neta Madhav:
  • Building partnerships; mentoring female founders in GRC and legal tech.

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Notable Quotes & Memorable Moments

• “There's only so many ways people are going to people.”
  – Erica Salmon Byrne [08:23]

• “Diversity means that you are walking into a room where you are bringing your point of view. And in a world where your assets are intangible, your point of view is the thing that is the greatest value.”
  – Erica Salmon Byrne [17:54]

• “Do the right things, folks. Just do the right things. Doing the right things means you're going to do better. You do better by doing good.”
  – Dottie Schindlinger [38:55]

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Timestamps for Key Segments

• [01:45] – Digital Trust Summit & EU AI Act: new ethical risks for boards
• [07:54] – Ethisphere's World’s Most Ethical Companies: survey and impact
• [12:17] – The report’s genesis: merging Diligent & Ethisphere data
• [14:38] – Independence, diversity, and skill matrices’ vital role
• [19:04] – E&C expertise on boards—metrics and challenges
• [21:58] – Director onboarding, assessments, and actionable practices
• [26:52] – Advice for boards: ongoing, structured E&C engagement
• [30:52] – The boardroom of 2036: dashboards and AI agents
• [33:48] – Passion projects: cross-functional relationships & female founder mentorship

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Conclusion & Closing Reflections

The episode underscores that the world’s most ethical boards distinguish themselves through deliberate, data-driven recruitment and development, strong independent and diverse voices, continuous learning, and a practical, methodical approach to ethics and compliance oversight. Real-world performance is closely linked to genuine ethical frameworks—not compliance checklists. Both Ethisphere and Diligent continue to champion the value of “doing good to do well,” and the conversation offers actionable takeaways for anyone looking to help their board raise the bar.

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Transcript

[A]

Foreign. Welcome to the Corporate Director Podcast where we discuss the experiences and ideas behind what's working in corporate board governance in our digital tech fueled world. Here you'll discover new insights from corporate leaders and governance researchers with compelling stories about corporate governance strategy, board culture, risk management, digital transformation and more.

[B]

Hi everybody and welcome back to the Corporate Director Podcast, the voice of modern governance. My name is Dottie Schindlinger, Executive director of the Diligent Institute, and I'm joined once again by my two amazing co hosts, Megan Day, strategy leader here at Diligent, and Kira Ciccarelli, head of research for Diligent Institute. Megan, Kira, how are you both doing today?

[C]

It's great, Dottie.

[D]

Pretty good.

[B]

I'm so excited to be back with you all.

[D]

I know it feels like it's been long.

[C]

It's been a minute gallivanting around the world, you two.

[B]

Yeah, well, that and also I'll just come clean with our audience. I had a pretty awful respiratory virus for about six weeks and so I didn't have a voice for a total of 14 days. Like literally nothing but squeaks. So it's nice to be almost 100%. Although I can't guarantee that at some point I won't sound a little bit like Peter Brady when he went through puberty. It might happen, everybody.

[E]

Just be prepared.

[C]

You might have to stop, give. You might have to give up that reference. Dottie. I saw Kieran nod, but I think she might have no idea.

[D]

I know Brady. Brady Bunch, right?

[B]

Yeah, there you go. You got it.

[D]

I'm there.

[B]

I feel like our director audience might know Brady Bunch, though.

[C]

Megan.

[B]

I'm pretty sure.

[C]

But I mean, it was very iconic when Peter Brady lost his voice.

[B]

Well, but Megan, to your point, we have been traveling quite a bit and in fact, Kira and I just came back from a really incredible opportunity in Brussels that we went to last week called the Digital Trust Summit. Fans of the show may recall Dominique Shelton Leipzig, who's been a guest on the show and is someone that we've spoken about quite frequently because of her work on AI Trust and really building trustworthy AI ethical AI. This was something that people are kind of starting to call Digital Davos or AI Davos because it was a combination of EU policymakers, business leaders, and actually artists, mostly film and performing artists, coming together to talk about how do we ensure that AI tools are ethical, trustworthy and have permission to use the content that they are displaying. So have you actually gotten consent to show this person's face and likeness and voice in your AI? Results. It was a really incredible day. Kyra, what were your takeaways from the day?

[D]

I think for me it was just really eye opening to get the EU perspective. I think sometimes we get a little bit myopic in the US and we end up focusing just on what's happening immediately around us. But I think we saw it in the past with the. And we continue to see it with the ESG sustainability conversation. And now I think we're seeing it in the AI realm as well. But the European picture looks quite a bit different from the way it looks in America.

[B]

Well, and to that point, Kira, there's a big milestone coming up on August 2nd with the EU AI act really going fully into force. And to be candid, I'm not entirely sure how many American companies are kind of ready for this. And it does have broad reach.

[C]

I'm here. Cause I was like, what? I don't even know what you're talking about.

[B]

Yeah, I mean, I'm having deja vu. Megan of Remember gdpr. And when suddenly the ticking clock was. I think it was. What was it like July 1st of 2018, suddenly everything had ready and we were like, huh, what, what do we have to do? Yeah, so it's kind of like that. And I. It's not something I've heard talked about at many conferences. I haven't had many conversations with it, you know, with American directors about it. But quite frankly, if you do business in the eu, you should kind of take a look at this and make sure you're ready. There's. There's some real teeth to this law, you know, including making sure that any part of your AI supply chain is in compliance. So worth spending some time talking about it, looking at it. I know this was a big topic of conversation at the conference and I would also just say, you know, look, it was really exciting to have the opportunity, Kira and I, to present our research and to talk a little bit about what Diligent is doing around AI in front of this group. You know, we, I mean, not to name drop too much, but like, you know, Cate Blanchett was there, Steven Soderbergh was there, Darren Aronofsky was there. It was a pretty rarefied combination of people, but me being me. The people I was most excited to meet were the two co authors of the EU AI Act, Axel Voss and Brandon Benify. It was great to have a chance to talk with them over dinner and find out a little bit about what went into that process. It was fascinating. Again, governance geek here, but yeah, I Think it's an amazing event. Directors. If you're not familiar with the Digital Trust Summit, put this one on your list for next year. Probably is going to be in Brussels again next year, which I think is smart, given all that the EU is doing around governance of AI. And it's worth going. This was an amazing learning opportunity and really everybody who was there was there to help to contribute to solutions. It wasn't another opportunity to just get together and hand wring about all the risk. This was like, yeah, yeah, okay, what are we doing about it? The whole focus of the day was solutions for fill in the blank risk. And that was very inspiring. It was really reassuring. There's a lot going on. There's a lot going on. So highly, highly recommend. So this is probably a good segue to talk about the interview that you got to do. Megan, do you want to kind of cue us up? So, speaking of ethics, you had an opportunity to talk to sort of two ethical leaders, I would say. Yeah.

[C]

We have a great relationship with Ethisphere, who publishes and has published for a long time, really the signature report on the world's most ethical companies. Something that I know we have paid attention to here at Diligent for a long time. And we've had the opportunity to dive a little bit deeper and differently into some of that work, specifically related to boards of directors. So we had a great conversation with Neta Madhav, who's from our compliance business unit, and Erica Salmon Byrne, who is Chief Strategy Officer over at Ethisphere, about the trends that they're seeing and the implications for boards around the world.

[D]

And I think to Dottie's point about the Digital Trust Summit, I won't spoil too much, but we've been talking with Erica a little bit about what the survey might potentially look like next year. And it looks like questions around ethical use of AI, governance of AI are definitely going to be thrown into the mix there as well. And they already are to an extent.

[B]

Awesome. Let's give the interview a listen and we'll come back and talk about what we hear.

[C]

Joining us on the Corporate Director podcast today is Erica Salmon Byrne, Chief Strategy Officer at Ethisphere and Neta Madhav, Vice President of Business and Product strategy for ethics and compliance at Diligent and previously founder and CEO of Vault, now part of the Diligent family. Both played a key role in a special report from Ethisphere and Diligent in Inside the World's Most Ethical Boardrooms. And we're very excited to talk to both of these guests today about that. Thanks for joining us.

[E]

Thank you so much for having me.

[F]

Thank you.

[C]

To start us off, Erika Netta, I would love a 30 second overview of who you are professionally to share with our audience. Erika, maybe let's start with you.

[A]

Great.

[E]

Thank you, Megan. So, Erica Salmon Byrne, as Megan mentioned, I have the privilege of serving currently as the Chief Strategy Officer at Ethisphere and executive chair of the Business Ethic Leadership alliance, which is our membership group of multinational companies that come together under the motto of there's no competition in compliance. So I have spent the last two decades of my career really heavily focused on proactive compliance sharing. So really trying to cross pollinate good ideas from one company to the other. Because at the end of the day, what everyone in the ethics and compliance space is doing is trying to manage people created risk. And as I like to say, there's only so many ways people are going to people. So that's my focus.

[C]

Love that.

[B]

Nada.

[C]

What about you?

[F]

So I am a founder of a company that pioneered technology in the ethics and compliance space called Vault Platform. Today Vault is probably part of Diligent and we offer new innovative ways for employees to speak up, not just employees, third parties as well, to speak up and raise any type of concerns about any type of ethical breaches in the company and for companies to investigate better and resolve cases in a, in a more efficient way and to have the data in their hands about what's happening at the stern of the ship and so very much bringing the technology edge to this, to this arena.

[C]

Before we dive into the report on the world's most ethical boardrooms, Erica, for those who may not be familiar, Ethisphere is really known for your World's most Ethical Companies list, something that's been around for many years. I would love for you to just talk a little bit more about that list and its storied history.

[E]

Yeah. Thank you, Megan. So for those of your listeners that are not familiar with the World's Most Ethical Companies process, glad we're starting here because that is the data set that informed this particular report that we produced with the team at Diligent. So the World's Most Ethical Companies process is something that Ethisphere has been doing for 20 years. We started it in 2006 largely to share, to shed a light on companies that were engaged in good practices. If everybody listening remembers the early 2000s, we had so many examples in the news of companies engaged in misconduct and we wanted to try to find a Way to celebrate companies that were very quietly doing the right thing. And and that was the genesis of the process at the time and it still really is sort of the underpinning ethos. Today's process looks very different than the process 20 years ago because today's companies look very different than companies 20 years ago. So someone who is interested in applying for world's most ethical companies goes through a survey where we collect about 250, 260 data points on practices across six different categories depending and the 250 to 260 depends on the skip logic. So we look at your practices, the design of your ethics and compliance program, we look at your governance practices that very heavily influenced this report. Obviously we look at the way in which you are measuring and supporting your speak up culture which is one of the first ways that I crossed paths with Nada years ago. And then we look at your third party risk management protocols and we look at the way in which you are thinking about your material non financial risk factors which is basically your impact on your key stakeholder groups. You respond to the survey, you submit documents for the review team. The review team grades those documents and combines them with your survey answers and decides who to recognize in any given year. This year we had 138 companies on the list representing 47 industries in 19 countries. So very diverse truly is world's most. You know it's not just one or two countries, very diverse list from a wide variety of different countries, different industries, different organizations representing both nonprofit, privately held, PE backed, family owned and publicly traded companies. So really runs the gamut in terms of the kinds of organizations that are recognized in any given year.

[C]

Yeah, it's a fascinating list every year to comb through and I'm really excited to take a look at this new report which really zeroes in on the board's role within those most ethical companies. So Netta, I would love for you to talk a little bit more about the report, the background, the genesis of this.

[F]

Yes, so this really came about as an exercise of curiosity between Ethisphere and ourselves at Diligent and the Diligent Institute. And the idea behind this was both of us, Ethisphere and Diligent have such a rich and broad set of specific data. So as Erica just described, Ethisphere is indexing the world's most ethical companies and the and what makes an ethical company. Whilst for us at Diligent with you know most companies in the world are using our boards product we have a very in depth understanding of what makes Good governance and what, and you know, and how boards function. And so combining these two sets of data into a new almost, you can, you can call it an index, but it's really to understand the mechanics behind what makes a board an ethical board. So looking into the data of the world's most ethical companies and understanding what the most functioning boards look like and the connection between that and ENC data and ENC experience, sorry, ethics and compliance, I should not be using the shorthand here on the podcast is incredibly important. So the way we, the way we analyzed this is that we looked at the fact that 20% of the applicant score is now made up of governance focused criteria. So we looked into that specific group where governance has scored highest and then we started to derive the mechanics behind this, what makes it an ethical board. And we found really, really great and interesting data that is all described in this report that I encourage you all to read.

[C]

Well, one of the big themes in the report is that the most ethical boards are more independent and more diverse, not just compliant on paper. Erica, what did the data show about independence and diversity in that top governance cohort? And why do those high floors, not just high scores, really matter in practice?

[E]

Yeah. So, Megan, the interesting thing over the course of the last 10 years is we've been kind of watching the metrics on the companies that qualify as world's most ethical companies in any given year compared to some of the other measurements of both independence and diversity. And if you think about the ultimate job of the board, the responsibility of the board to safeguard the organization's assets and guide management with strategic insights, that is a great jumping off point to think about why both independence and diversity would matter. So I'm going to start for a second with the assets piece because one of the things that really informs the work we do here at Ethisphere is the recognition that the vast majority of today's companies, their value is made up of intangible assets. So some of the research we have seen out there, Ocean Tomo, for example, has done a wonderful job looking at this issue, is that between 80 and 90% of the average company's value is intangible assets. And that's a complete flip from where we were in the 70s, where most of it was tangible assets, it was inventory, it was factories, it was equipment, it was, you know, things you could hire guards for and write insurance policies for. And today it's confidential company information, it's your intellectual property, it's the way in which you're protecting your patents and your Trademarks, it's your people, it's your reputation, it's your brand. Those are the kinds of things that make up the value of organizations today. And that is far harder to safeguard in the traditional ways. And so if you think about that reality, so you've got a board of directors that is put in place to steward the assets of the business. The assets of the business are intangible. That is going to require a different set of background and expertise than we have traditionally seen on boards. And so the best boards are starting with really strong skills matrices. And we saw some great examples of this in this past year's WME submission. Really strong skills matrices that are tied to their risk assessments, that are tied to their strategic planning processes. So it's not just what skills do we have on the board, it's not even just what skills do we need to have on the board. The best boards are then going that next step further and saying, why do we need these skills on the board?

[D]

Right.

[E]

What is it that we are looking for strategically as a business that we can look for backgrounds, guidance, an independent point of view from the people who we are actually putting into these board seats. And then you've got the independence for management piece, which is critically important when things go wrong. In particular, you know, and we know we have lots of examples of CEOs or other senior leaders at companies being asked to depart over the course of the last year and a half. We have the Nestle CEO situation, we have the BP CEO situation, we have the BP chair situation. So if you think about the importance of having a strong lead independent director in those circumstances that is distant from management, that really is the reason why I think we see such deltas between the independent, the number of independent directors on WME companies and what we see in some other organizations. And then on diversity. Look, this has been a hot button topic for a lot of organizations, but I would remind your listeners, diversity means that you are walking into a room where you are bringing your point of view. And in a world where you're assets are intangible, your point of view is the thing that is the greatest value in those conversations. And so that I think is another reason why we continue to see boards really concentrating on do we have the right mix of skills, do we have the right mix of voices, do we have the right mix of backgrounds? So that we are, as a board, as capable as possible of keeping up with the volatility of the business we're stewarding, looking around corners and thinking strategically about the business. Because that's their job at the end of the day.

[C]

Well, in line with that is expertise. And the report also highlights deep ethics and compliance expertise in the boardroom. And also richer information flows from interactive ethics and compliance sessions to outside experts and independent materials. Nada. How are the most ethical boards actually building that expertise and ensuring they're hearing more than just management's point of view, for sure?

[F]

Well, first of all, they're bringing their own expertise. So on top of, you know, as Erica mentioned, a point of view, they're bringing their own expertise. And here let's start already with what I find to be a fascinating point of data king into the world of ethical boards is that across all honorees for worldwide ethical companies, many boards can point to at least one director that has a substantial ENC background. So that's, you know, already a great starting point for us. But the top, this top scoring group that we're looking at, that we name the world's most ethical boards is one that more likely to have more than one director. So multiple directors, and they actually have operative experience running ethics and compliance programs. So they've been operators in this actual space and they bring this very hands on experience into the boardroom. So that's already kind of when we're thinking of the composition of the board and what they bring that is incredibly important. Beyond that, what is also, and whilst as I said, it's a really great thing to see that this composition includes multiple people with operative experience, still important to say and note that a data point that was less favorable for us to see, definitely a place of improvement is that across all honorees, only 11% of directors have served as a chief ethics or compliance officer in the past. And it is slightly improved for our focus group of world ethical boards with 14%. So improvement there is still low numbers. What I'm sure Erica and I would love to see is that number growing over the years and more chief ethics and compliance officers are being offered a seat at the table. Beyond that, it's interesting to look into information flows and engagement. So what we found is a striking number of 86% of our focus group of boards of ethical boards. They provide interactive sessions on ethics and compliance, such as case studies or tabletop exercises, versus just 52% across all the honorees. And we're finding that 100%. So without exceptions, 100% of the world's most ethical boards receive written material such as reports and articles and regulatory guidance from independent sources. So they're not just counting on, you know, on their own internal produced materials, but they are sourcing this external point of view and counting on that as well. So yeah, these are just few of those examples.

[E]

That's great.

[C]

The report also points to a couple of other differentiators. Things like structured onboarding across key functions, field exposure and site visits. And one of my favorite topics, director assessments. Erica, can you walk us through what some of those practices look like and how you think they really change the quality of oversight?

[E]

So I'm going to pick on two particular pieces, Megan, of what we found when we dug into the data. And like Netta said at the beginning, I would encourage any of your listeners that are curious about this to take a look at the full report itself because it has a ton of additional data that we're not going to have time to get to today. I want to start with director assessments. So as I mentioned a little bit earlier in the episode, we're seeing a really strong evolution in skills matrices. And the strong evolution in skills matrices is absolutely tied to better director assessments because if you know what it is you need on the board, you're then better able to figure out whether or not you are getting what you need on the board. And so one of the places that we have seen substantial evolution over the years is around both director assessments and things like committee chair tenure. So for a long time we've been talking about tenure on the board overall, but what about tenure on a particular committee?

[C]

Right.

[E]

How quickly do I get stale on my 5th, 6th, 7th, 8th year serving on the audit committee? Maybe I should rotate and serve on NOMGOV for a couple of years and bring my audit committee perspective to my non gov chair role or to my NOM Gov committee role. And so we are seeing structured work to rotate committee chairs to on board committee chairs, not just new directors. We're seeing very structured work to think about what does good assessment look like. And part of the job of good assessment is moving out directors who are no longer contributing effectively. And it is the hardest thing for a board to do because these are collegial groups who have known each other for a long time. And if you know somebody's falling asleep in meetings, it's very challenging to say maybe this isn't the best use of your time any longer. But if you've got a structured assessment process that is tied to a good skills matrix, you are more likely to be able to do that tough work, that hard conversation because you have a structure that was put in place for everybody to agree on. It's kind of like Locke's Utopia. We're all deciding in advance what role we're going to have without knowing whether we're a farmer or a builder. If we are all deciding in advance that we are going to tie our assessment process to a strong skills matrix, we are agreeing that this is what the company needs and it makes it a little bit easier to have those really challenging personal conversations. So we see in this particular cohort more formal assessments as opposed to ad hoc assessments. We see more external assessments as opposed to the general counsel and the non gov chair being like, yeah, so and so's fine. Maybe they're not really doing the pre ready, maybe they're not showing up when they should be. But it's fine. They're still important. They've got a great relationship with so and so the more formal you get, the more external you get, the more 360 you get where directors are evaluating each other, the better those processes become. And then unstructured onboarding, you know, we really at the, again, if you think about the board's role to oversee intangible asset protection, they've got to understand the business. And so in this cohort we also see far more directors being asked to visit sites. We see a broader group of people they're sitting down with as part of an onboarding process. We see them as part of succession planning, meeting people in other jurisdictions that would potentially be good candidates to take on senior roles. That's one of their biggest jobs is, you know, thinking about succession planning. Well, if you never go to EMEA where the person who is in the succession channel is located, then how do you know that you're doing a good job with succession planning?

[D]

Right.

[E]

You have to engage with the business. And that is the other thing I, you know, that, that I would, that I would highlight. Megan, that's in the report is also that's part of the reason why we're seeing directors sit on fewer and fewer boards. So the average amongst the WME cohort is going down. It's two and a half at this point. And that's, I think part of the reason for that is a real focus on hey, I'm getting paid a good salary to take on this oversight role. I'm not going to do six of them because I can't do them well.

[C]

Well, we could have a whole episode separately on that topic. But looking ahead and sticking to the, the topic here at hand, which is the most, most ethical boardroom profile, if a board wants to move closer to that, you know, what are one or two concrete steps that you each believe they should take to become more ethical and better steward. Long term value. Nada.

[D]

Let's start with you.

[F]

So for me, it's all about making time for ethics and compliance and to be methodological about it. So not a one off exercise, but to have some sort of ongoing commitment and cadence to hear from your ethics officer, invite the ethics officer into the boardroom to present findings, ask them tough questions, push them about program efficiency. You know, often, often than not, we hear from ethics officers who need to make the case for why, you know, for why program quality and efficiency need to win the attention of the, of the board. Well, let's, you know, let's turn the tables around this. Should. The board should be demanding quite a lot from its ethics team and ask questions like, do our people actually trust the Speak up channels? How do you know? Prove that. How can you prove that? What are the benchmarks? Do we create psychological safety in the process? How much time does it take us to resolve cases? What can we do to go to be better? How can we resolve them more quickly? How can we close the loop more quickly for the reporter? And, and do we track any data about retaliation? So really the board should be asking these questions. And, and the way I see it is that it creates this mutually productive relationship between the ethics officer and the board where they're pushing each other upwards. Right. That's, that's how I, that's kind of how I envision it. So that'll be for me.

[E]

Yeah, I agree with everything that just said. I think those are critically important steps. The thing I would add to it, Megan, would be I would strongly encourage the board, to the extent that they are not doing ethics and compliance related tabletop exercises, to treat them as seriously as they do cybersecurity exercises. So really take and look, there are so many fact patterns out there that are available for directors to use to sit down as a team and say, okay, here's the fact pattern of the thing that happened in our industry. Not could it happen here? Because that's far too easy to answer. No. What would it look like here? How would it happen here? What would our version of this be? Because doing that repeatedly, doing that kind of an exercise is one of the ways that you get to some of what NADA was just raising, which is, hey, wait, we haven't heard anything from anybody in EMEA in 18 months. What's going on in EMEA? Could this, could something like this be happening there? Could something like this be happening in our Asia PAC region? Could something like this be. I mean, there's so much M and A right now. Could something like this be happening inside the company? We've just paid $4 billion for, and we're going to have a problem on our hands. Right. Those are the kinds of questions directors need to be asking themselves. And putting it in the format of a case study is one of the ways that you can take some of the personal sting out of talking about, you know, whether or not you, your CEO is engaged in appropriate relationships, which is a headline we keep seeing over and over again. That can be a tricky situation to discuss as a board, especially if your CEO is also the chair. But if you talk about it as like this thing that happened to someone else and we're pulling out the pieces that could possibly happen to us with that same level of reputational challenge and what would it look like here and how would we know? That is one of the things that I would be, I would want to be pushing for if I was serving in an independent director role today.

[F]

Erica, Summer is coming. Do you think we'll get another Coldplay moment? Maybe this Taylor Swift concert? I don't know.

[D]

We'll see. We'll see.

[C]

Well, before we let you both go, a couple of questions that we ask all of our guests that I'd like to end with. So, Erica, let's start with you. What do you think will be the biggest difference between boardrooms today and 10 years from now?

[E]

Dashboards. I think the biggest difference is going to be dashboards. I think that. And it's not going to take us 10 years to get there. I think that over the course of the next couple of years, we're going to see a tremendous evolution in the way in which boards are being fed information about what's happening with the business. I think we're going to see consolidated dashboards that are going to be bringing together data from a whole host of sister control functions. We're seeing this now in some of the best companies. Coordinating what, what audit is talking to the board about, with what ethics and compliance is talking to the board about, with what procurement is talking to the board about. But interactive, the ability to interactively see live feed data, I think, is going to be one of the things that that is a tremendous change and it's not going to take us 10 years to get there.

[C]

Nada.

[D]

What about you?

[F]

Well, if I can make a guess, I think that in much less than 10 years, we will see agentic board members, we will see agents taking the role of board members or just adding experience Adding perspective, adding some sort of domain expertise, and acting like wizards with answers on boards. And those agentic board members are coming our way. I even know a company that develops them. So, really excited to see how AI transforms this particular room as well.

[C]

Love that. Well, what was the last thing you read, watched, or listened to that made you think about governance in a new light?

[E]

And this is not a pandering answer, Megan, but I have been binging episodes of the Corporate Director podcast because it was not something that was part of my regular listening feed before we did the work that we've done with the Diligent team over the course of the last several months. And you know, there's a really wide variety of guests that you all have had on the show. And that I think is the thing that I am most excited about. Neta's answer about agentic AI board members scares the pants off of me for a whole host of reasons we don't have time to get into. The thing that gives me the most hope for the boardrooms of the future is the way in which we're all learning from different disciplines. There is so much that we can learn from academic research. There's so much we can learn from organizational psychology. There's so much we can learn from all of these different disciplines that are really teaching us so much about how people work, how people work with each other, and eventually how people are going to work with AI, because at the end of the day, you know, it is going. That is going to be a relationship that is going to evolve and we are going to have to figure out how to manage it. So I've really been enjoying listening to the Corporate Director Podcast.

[C]

Oh, well, thank you. We're always happy to gain another listener. Well, last but not least, I would love to hear from both of you. What is your current passion project?

[E]

My current passion project, the Hill I. The proverbial hill I'm going to die on. Megan is doing everything I can to improve the relationship between the ethics and compliance community that Ethisphere serves and their partners in human resources. It is not always an easy relationship, but it is a critically important relationship. And so I have been doing a lot of thinking and writing and talking and speaking to that particular audience to try to point out all the ways in which a strong partnership with human resources is actually a two plus two equals seven situation, not even two plus two equals five. It is a enormous value accelerator if done well, but it is definitely one. It is a fraught relationship in far too many organizations still. And that's to the detriment of those organizations and to their employees.

[F]

For me, within diligent, my passion project is that actually brought Erika and me together here on this podcast is very much around partnerships and truly all kinds of partnerships looking into both business, product and technology. And there are some truly exciting alliances that are coming into play that we would love to talk about soon. And that's, you know, that's, that's a, that's always a, you know, for me, a great part of the business to work on when you work on partnerships and you're bring and you're building alliances because it's about the business rationale, but it's really about the, it's really about people and relationships and, and you know, and how you make one plus one be three. And I'm, I'm, I'm really excited about those kind of. My extracurricular passion project continues to be working with female founders and ensuring more FEMA are entering into the world of startups. Specifically, I had the pleasure of meeting and mentoring women in the GRC and legal space, so also allowing me to bring some of my domain expertise to that. But anything we can do to make women more present in the entrepreneurial world is continues to be my passion project.

[C]

Love that. Well, thank you so much for joining us on the show today. Really enjoyed today's conversation.

[E]

Thank you so much for having me.

[F]

Thank you. Bye. Bye.

[D]

Great interview, Megan. Always nice to talk to the two of them. And I think what sticks out to me in particular is this emphasis on making sure that your directors are sort of ethics literate. And this idea around board education, it just goes so much further beyond a strict compliance perspective.

[C]

Definitely. And I think here in the US it's funny, come back to your comments earlier about this sort of myopic US point of view here. It's very true. I think from an ethics perspective too. I think we are so oriented around compliance here, but some of the foundation of what it means to be an ethical organization is often not as top of mind or front and center in some of the conversations happening at the boardroom as perhaps they need to be.

[B]

Yeah, I think one of the things that always sort of jumps out at me when I read this report that we did together is how there is such a tight connection between being a really ethical boardroom, ethical company, and company performance. I mean, for me, that's sort of the, that's sort of the bottom line. Right. The literal bottom line is your company performs better if you're, if you are operating ethically I mean, it seems kind of like a no brainer, but maybe it's not, you know, maybe it's not a no brainer these days. I mean, yeah, you know, it reminds

[C]

me, Dottie, of your, your oldie but goodie, that Modern governance report from, gosh, 2019. I was going to say a long time ago now. But the themes I think still do still carry over and remain to be true.

[B]

Yeah, there's good business reasons to do the right things.

[D]

Right.

[B]

And in this case, I think I also just think it was really interesting to have the opportunity to join forces with Ethisphere and take a look at this data set with fresh eyes. Right. They've been doing this report for so long and I know we talked about this on a previous episode, but I just really like that we had this opportunity to come in and say, hey, you've collected all this information on what the boards of the most ethical companies are doing. Can we write about that? Can we take a look at that and see what surfaces for us? And I was really interested in some of the findings there. You know, it really stood out that the boards of the most ethical companies do operate a little differently. They have people who have a background in ethics and compliance on the board. You know, they have a little bit more of a focus on ethics and compliance. And I think because of that, it just means all good things for how the company operates and how successful they are. So, you know, I guess the moral of this tale is just do the right things, folks. Just do the right things. Doing the right things means you're going to do better. You do better by doing good. Isn't that the old adage?

[C]

Indeed it is. But, you know, the other part of me is, you know what? You want to screw up, that's fine. I look forward to reading the latest, you know, bad blood novel related to that.

[B]

Is it wrong, Megan, that I crave news that isn't dire?

[C]

I understand.

[B]

I mean, this is why I was so happy to read this report, because for once, it's not like, here's all the things that people are doing terribly wrong. For once it was like, hey, look, here's some stuff they're doing right and they're actually succeeding because they're doing things right. I'm like, come on, it's just a. It's a nice palate cleanser ever than Pollyanna.

[D]

Always, for sure. And I know Erica and the rest of her team are always very careful to say that it's not causational necessarily, but it certainly doesn't look like there's any downside to having any of these practices in place. That much we can say for pretty

[B]

much certain well, that wraps up another episode of the Corporate Director Podcast, the Voice of Modern Governance. I'd like to say a few special thank yous. First to my two co hosts, my Megan Day and Kira Ciccarelli. Our two guests on the show are ethical leaders Neta Maidev and Erica Salmon Byrne podcast producers Kira Ciccarelli, Steve Clayton and Terry Tirre, the sponsors of our show including kpmg, Wilson Sonsini and Meridian Compensation Partners and most especially, thank you to Diligent for continuing to sponsor this show. If you like our show, please be sure to give us a rating on your podcast player of choice. You can also listen to our episodes and see more from Diligent Institute and by going to diligent.com resources. Also, if you happen to serve on a nonprofit or public sector board, then tune into our sister podcast, Leading With Purpose for expert conversations on governance risk and compliance that make an impact for mission driven organizations. Thank you so much for listening.

[A]

You've been listening to the Corporate Director Podcast to ensure that you never miss an episode. Subscribe to the show and in your favorite podcast player. If you'd like to learn more about corporate governance and tools to help directors do their job better, visit www.digent.com. thank you so much for listening. Until next time.