Markkula Center for Applied Ethics Executive Director Kirk O. Hanson interviews John W. Noble, vice chancellor, Delaware Court of Chancery. Advice for a new corporate director includes preliminary self-assessment: What can you bring to the board? Have you studied the company? What are your strengths and weaknesses? Check on liability insurance as it relates to your role as a board member, and make sure you have the time and energy to do the job. Continually educate yourself about the business and its risks. Due care and the duty of loyalty should be foremost. It's important to remember that the board provides the long-term vision, and is not involved in everyday minutiae. Talk to the experts, including financial advisers and accountants, and be aware of conflicts and potential conflicts ahead of time. Board decisions are just that, not individual decisions. The focus should be on doing the right thing and setting an example. Problems can occur when directors are conflicted and don't have a clear sense of priorities.

Tests for business people to determine whether, in any particular case, they are responsible for acting.

Kirk O. Hanson, executive director of The Markkula Center for Applied Ethics, interviews John W. Noble, vice chancellor, Delaware Court of Chancery. Are there different ethical standards depending on the size of the company, and also for entrepreneurial ventures? What about a new company vs an established one? Noble responds: directors must act in an informed way and uphold the needs of the company and its shareholders first and foremost. Directors must keep these principles in mind, whatever the size of the company. But fiduciary responsibilities do vary according to the size of the enterprise. A larger enterprise can do things a smaller one can't. But the bottom line is directors' compliance.

Michael L. Hackworth, chair of the Advisory Board of the Markkula Center for Applied Ethics at Santa Clara University and member and chair of numerous corporate boards, talks with Lon Allen, chair of the National Association of Corporate Directors-Silicon Valley, on what boards can do to promote ethics in an organization.

Doing the right thing builds trust with customers, shareholders, partners, and vendors. High efficiency and productivity result from trust.

The board should ask itself about any decision: Does it optimize the bottom line, which is the duty to create value? Is it legal? Is it consistent with the contracts and obligations we have? Is it ethical?

Michael L. Hackworth, chair of the Advisory Board of the Markkula Center for Applied Ethics and member and chair of numerous corporate boards, talks with Lon Allen, chair of the National Association of Corporate Directors-Silicon Valley, on what boards can do to promote ethics in an organization.

The Number 1 responsibility of the board is to promote ethics in the boardroom. If you think there's an ethical issue, there probably is one.

The board should also monitor C-level executives behavior. Does it reflect the values of the organization?

Finally, the board should be aware of incentives for employees. The way employees are incentivized can promote or detract from ethical behavior.

Hackworth shares a scoring system for the ethics of corporate boards.

Fiduciary duties of corporations: J. Travis Laster, Vice Chancellor of the Court of Chancery, Delaware, talks with Markkula Center for Applied Ethics Executive Director Kirk O. Hanson

Jeff Kuhn, Managing Partner, FLG Partners, talks with Kirk O. Hanson, executive director of the Markkula Center for Applied Ethics at Santa Clara University.

Tom Lavelle, general counsel of Rambus, and Christine De Guglielmo, co-author of "Indispensable Counsel," talk with Kirk Hanson, executive director of the Markkula Center for Applied Ethics, about the role of a company's chief legal officer in supporting the ethical culture of a company.

The general counsel is one of the leaders in promoting ethics within a company. He or she is an enabler for executives but also a gatekeeper, preventing the corporation from engaging in illegal behavior. The general counsel should offer business-oriented solutions to problems that are legal and fit the company's values.

There is a form of capitalism that actually is virtuous.

Kirk Hanson, executive director of the Markkula Center for Applied Ethics, interviews James O'Toole, Professor

of Ethics at Daniels School of Business on conscious capitalism.

Myron Steele, chief justice of the Delaware Supreme Court, describes the duties of corporate directors, especially fiduciary duties. Those duties focus on a duty of loyalty and a duty of care, which must be carried out in good faith.

Daniel Cooperman, Of Counsel with the Bingham McCutchen law firm, talks with Markkula Center for Applied Ethics Executive Director Kirk O. Hanson about improving board independence through training and disclosure.

Daniel Cooperman, Of Counsel with the Bingham McCutchen law firm, talks with Markkula Center for Applied Ethics Executive Director Kirk O. Hanson about the meaning of board independence and why it is important.

Daniel Cooperman, Of Counsel with the Bingham McCutchen law firm, talks with Markkula Center for Applied Ethics Executive Director Kirk O. Hanson about best practices in director independence.

Daniel Cooperman, Of Counsel with the Bingham McCutchen law firm, talks with Markkula Center for Applied Ethics Executive Director Kirk O. Hanson about where conflicts of interest arise and how disclosure and transparency address the problem.

Sam Glasscock, vice chancellor of the Delaware Court of Chancery, talks with Kirk O. Hanson, executive director of the Markkula Center for Applied Ethics, about fiduciary duty, the standard of care, and the standard of loyalty. Glasscock explains the function of a court of equity.

Bob Finocchio and Lon Allan, both directors of several companies, discuss the real job of the board of directors—representing the interests of the shareholders.

The characteristics of effective board members:

-Financial literacy

-Time

-Passion for the company or industry

-Independence

-Courage and willingness to confront people who may have more power

Bob Finocchio and Lon Allan, both members of the board of directors of several companies, talk about what boards can do to learn about what's really going on in a company. The board must gather data from multiple sources, including people who are not the CEO or CFO. The directors should have their nose in, but their fingers out. It's data gathering, not management of the company.

Bob Finocchio and Lon Allan, both directors of several corporate boards, talk about the relationship between the CEO and the Board. Finocchio emphasizes that the CEO works for the Board, not the other way around. While both are working for the same objective, maximizing shareholder return, there is necessarily some tension between them and the board must be willing to challenge the CEO, particularly the "rock star CEO."

The CEO also has reasonable expectations of directors: They should be prepared, available, and have some passion for the company.

Ethics and compliance officer Pat Gnazzo talks with Kirk O. Hanson, executive director of the Markkula Center for Applied Ethics, on how companies can manage the ethics and compliance function. As Gnazzo advises ethics and compliance officers

1) Don't see yourself as the expert.

2) Don't make a report on an ethics infraction before you've done a thorough review of the facts.

3) Don't try to preach morality. Talk about business ethics with respect to shareholder value.

Measuring ethics risk and making sure management and board are paying attention. Center Director Kirk Hanson talks with Patrick McGurn, special counsel to ISS Governance Services at RiskMetrics, about the people component of risk.