April 08, 2011

Corporate Secretary Magazine: Time for an Ombudsman?

The February 2011 issue of Corporate Secretary (the magazine for corporate secretaries, general counsel and governance professionals in North America) includes an article explaining why Organizational Ombuds are a logical response to recent whistleblower legislation.

Steven Norman and Jon McBride argue that the whistleblower protection provisions in the Dodd-Frank Act may encourage employees to sidestep internal channels and thus minimizing the opportunity for the company to investigate and promptly rectify the issue.  The authors point out that the widespread adoption of ethics offices, compliance offices, hotlines and other formal channels are not always effective because the workforce may be fearful of using them. One possible solution could be the creation of an independent ombudsman to deal with or minimize whistleblowing situations.

Norman and McBride also cite John Zinsser's research that demonstrates corporations will realize a significant return on investment in an Ombuds program. McBride is a management consultant focused on corporate governance issues and formerly conducted executive search. Norman is former Secretary and Corporate Governance Officer at American Express and now is a board governance consultant. (Corporate Secretary.)

Note: The journal article (click on image at right) differs from the version published at the Corporate Secretary blog.

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