CRISC Certified in Risk and Information Systems ControlGovernanceMedium
A multinational corporation operates in various countries, each with differing data privacy laws and compliance requirements. The board of directors is concerned about ensuring consistent ethical conduct and legal adherence across all operations while respecting local nuances. Which of the following approaches BEST addresses this challenge?
- AEngaging external legal counsel to review every operational decision made by subsidiaries for compliance with all relevant laws.
- BImplementing a single, global ethical code and compliance policy that all subsidiaries must strictly follow, regardless of local laws.
- CDeveloping a high-level global ethical framework and compliance principles, allowing local entities to adapt specific procedures to meet local regulations.
- DDelegating full responsibility for ethical conduct and legal compliance to each local subsidiary, with no central oversight.
Show answer & explanationAnswer & explanation
Correct answer: C. Developing a high-level global ethical framework and compliance principles, allowing local entities to adapt specific procedures to meet local regulations.
A global ethical framework provides consistency and core values, while allowing for local adaptation ensures compliance with diverse regional laws and cultural norms. This balances centralized governance with localized execution.
Why the other options are wrong
- A. Reviewing every decision is impractical, costly, and inefficient for a multinational corporation, hindering agility and empowering local decision-making.
- B. A 'one-size-fits-all' approach risks non-compliance with stricter local laws or alienation of local employees due to cultural insensitivity.
- D. Delegating full responsibility without central oversight introduces significant risk of inconsistent conduct, ethical lapses, and potential legal violations across the corporation.
Global Ethical Framework with Local Adaptation
An organizational strategy where universal ethical principles and high-level compliance guidelines are established globally, with provisions for local business units to tailor specific policies and procedures to meet regional legal, regulatory, and cultural requirements.
- Ensures global consistency in core values.
- Allows for compliance with diverse local laws.
- Balances centralized governance with localized implementation.
Memory trick: Think global for values, act local for laws.