It's important to understand the CEO and their well-defined beliefs, and how these beliefs are translated throughout the organization. The tone in the middle comes from the tone at the top.

Small things matter. I will never forget interviewing a potential employee for a large media company on a private helicopter. She proceeded to empty a drawer full of snacks into her briefcase. I knew at that point that nothing good was going to come from this interview. Her compelling actions defined her leadership capacity very quickly. Despite my recommendations, the company hired her, only to experience problems down the road.

People make choices every day in leadership positions. Sometimes legal and ethical don't entirely match up. Are ethics the basis of your judgment or are they put into your decision and rejected because they are not convenient? Do board members have the fortitude to differ from consensus and tell the truth? Having the courage to say in a collegial, but challenging and mature way, that “the baby is ugly”, can bring important dialogue, that is not sugar coated, to the table.

Having breakfast or lunch with the auditor to read their eyes and open up a conversation is a good way to ensure the integrity of the chief financial officer's office. Meeting with the CFO or their lieutenants once a year to affirm the integrity and transparency of the credit union is additionally helpful. Giving people the courage to speak up and share what's on their minds and to ask penetrating questions, will bring out the truth, when people are asked direct questions.

When asked how frequently the board reviews their existing ethics policy, 23% of participants on the NACD webinar said less than annually. Reviewing these policies with your counsel on an annual basis, where any enhancements based on Dodd-Frank can be shared, and asking your CEO about their strategic communication plan to transmit values throughout the organization, is a meaningful exercise to strengthen the culture of both the board and entity.

This should not be a “check the box” exercise, but rather a process that prevents breakdowns in the organization and confirms the moral leadership at the top. The unethical behaviors that led to the collapse of companies such as Enron and WorldCom began with decisions and behaviors at the top that were unacceptable. Human beings need periodic speed bumps with speed limit signs posted to be reminded of the rules every so often – whether it's conflict of interest or foreign corrupt practices for vendor relationships.

In closing, ethics is not just situational. If you train people on behaviors and what actions should look and feel like, everyone will have the playbook on what your credit union values. Think about whether your organization's ethical code is a check-the-box mentality or a values-based approach. If it is values based, you are to be applauded. And those who have the courage to say it is “check the box”, then perhaps aspirationally, it's a good goal to think about moving towards a more values-based approach.