Who should respond to signs of dishonesty from senior executive management?

Addressing signs of dishonesty from senior executive management is a critical responsibility that falls primarily to non-executive directors. Non-executive directors play an essential role in governance and oversight within an organization. They are independent from the executive management team, which allows them to maintain an objective perspective on the company's operations and decision-making processes.

When there are indicators of unethical behavior or dishonesty from senior management, non-executive directors have the duty to investigate these signs thoroughly and ensure appropriate action is taken. Their role includes providing checks and balances to the executive team, and they are often part of committees that may be tasked with risk management and audit functions. They serve as a vital line of defense against potential misconduct and act in the interest of shareholders and stakeholders by promoting transparency and accountability in corporate governance.

While internal auditors are responsible for assessing internal controls and operational efficiencies, and external auditors provide an independent examination of financial statements, neither group has the same governance responsibilities as non-executive directors regarding senior management’s integrity. Employee unions focus more on employee rights and welfare rather than oversight of senior management’s actions. Hence, non-executive directors are best positioned to respond and act on signs of dishonesty in the upper echelons of management.