Lately, the business news reads more like the police blotter. Previously pristine corporate and executive reputations have been sullied, in many cases justifiably. In the process, doubt and mistrust have been cast on the American business community, which doesn't necessarily deserve the guilt by association.At companies such as WorldCom and Stanley Works decisions are being made that, though they may be legal, are deemed morally wrong. For instance, Stanley Works is an American icon. Recently, its CEO decided to reincorporate the company in Bermuda to save on taxes, which is technically legal, but morally questionable. What kind of message does that action send to employees, customers, and suppliers? Similarly, much of what WorldCom did was legal, but questionable. What does this kind of behavior communicate? How does the stock market see it? If you were a director of one of these companies, would you sign off on compensation packages that put hundreds of millions of dollars into executives' bank accounts? How would you feel about an SEC investigation? Could you defend yourself in a congressional hearing? Today, as an outgrowth of the misdeeds of their companies' executives, hundreds of corporate directors are embarrassed - some even culpable. And there are probably thousands more who wonder if they might be overlooking something in their own houses that could put their companies into the same unwanted limelight. If you're in the latter group, worried that a previously clean record of legal financial reports may not be as it seems, is there anything you can do to uncover, maybe head off, possible financial shenanigans or moral lapses by your executives? There aren't many tools outside the usual ones through which directors can truly understand how an organization is being managed. Sure, you can take the measure of the CEO and his or her team, solicit counsel from legal advisors, consultants, and outside auditors. But obviously, in light of recent events, that approach has been insufficient in rooting out executive misconduct. But directors do have a unique tool to view their organizations, one that allows them to better discern how they are being led and managed. It can also provide a glimpse of the cultural philosophies that ultimately guide employee actions and behaviors. It's called communications, and it's how organizations build relationships, increase knowledge, accept debate, challenge assumptions, and strengthen confidence among the workforce. As an analyst recently told me, "To understand how a company is managed, you must understand how it communicates. To understand how a company communicates, you must understand how it is managed." That may sound like circular reasoning, but he's right. Though conventional thinking would separate them, the way a company is managed and the way it communicates are inextricably linked. The traditional view sees communications as a distinct function responsible for disseminating information, at arm's length from management. In truth, successful managers long ago recognized the link between the two and the role all managers have in communications, as well as the positive impact that communications can have on their own management effectiveness. To that end, directors should ask for a complete briefing on the organization's internal communications strategy, activities, progress, and results. Directors should seek details on how information is gathered, disseminated, shared, and discussed. Indeed, the exercise should also help directors pursue answers to questions about the organization's management model. How are decisions made? In a vacuum by senior managers, or by using the full weight of the organization's skill base through consistent, comprehensive internal communications processes? How does management talk to employees? Is there opportunity for idea sharing and debate? Are strategies actually explained, or just arbitrarily served up? Is information really being shared, or are internal and external audiences getting sanitized versions only? Are the proper incentives in place for employee performance? Reward and recognition programs are effective ways to communicate by reinforcing an organization's culture. In addition, these programs help support company objectives and can be used as a tool to help retain top talent. Recognition programs should be in lock step with a company's values, ensuring that the right "behaviors" are being showcased internally. While we know this approach isn't a panacea, it is a simple, powerful way to grasp how a company is run. And if you're a director, you don't have many mechanisms at your disposal. Internal communications is about organizational effectiveness. It's not just about communicating or putting words on paper. For directors, it's time to take a fresh look at your company. Consider the way the company communicates with employees and customers. This will provide a window on the organization's soul. And in today's volatile climate, seeing that just might provide corporate directors with all they need to do the right thing.