With so much information competing for your attention, the role of filters becomes critical. But who governs the filters, according to what rules?
“Facebook Edges Toward ‘Fact Checking’ News,” The Wall Street Journal, December 16, 2016 A1. Facebook responds to purported/reported growth of “fake news.”
We can all agree that an objective validation of a story is a good thing (isn’t that what the media used to do?), but who checks the checkers? Do you/we trust Facebook to be objective? What duty does Facebook have, and to whom?
It is not uncommon for a manufacturer to fail to disclose (voluntarily) data about defects.
“Probe Points to Nuclear Coverup,” The Wall Street Journal, December 14, 2016 B1. A supplier to the nuclear industry hid manufacturing defects and falsified records for as much as 50 years. Record falsification reportedly stopped four years ago “when oversight of quality control was removed from an internal office at the factory to a different … factory….” Concerns about a quality culture. They marked which files shouldn’t be shown to regulators.
Talk about a culture problem. Interesting case study.
Filed under Accuracy, Board, Compliance, Compliance, Compliance, Controls, Corporation, Culture, Culture, Data quality, Directors, Duty, Employees, Governance, Government, Information, Internal controls, Management, Oversight, Oversight, Protect, Protect information assets, Reliance, Risk assessment, To report, Value
“Data Deepen Legal Insights,” The Wall Street Journal, December 14, 2016 A3. Lawyers look at piles of data about judges’ rulings and “predict” how a specific judge will rule in a specific case.
Are past rulings on different facts a reliable indicators of future rulings? Yes, the data itself is interesting, but do lawyers have special skills in analyzing what that non-legal data means? Can you separate the facts from the opinions, and weigh each appropriately?
I am a big fan of probability-weighted risk analysis, and have long been an adherent to Marc Victor’s Litigation Risk Analysis. As one of many inputs into setting a litigation strategy. But only one.
I normally avoid picking from The Wall Street Journal‘s editorial pages, as opinion is not the level of fact within the purview of this blog. But today provides an exception.
“So You Want to Be a Diplomat? CEO’s Need Not Apply,” The Wall Street Journal, December 13, 2016 A17. Discussing the nomination of Rex Tillerson, the writer says:
Knowing Exxon Mobil’s highly legalistic corporate culture — according to the office grapevine [sic] infractions such as talking during a fire drill or inviting a government official to a meal that cost more than the federal gift threshold were fireable offenses [emphasis added]– I expect that Mr.Tillerson would raise the bar for ethical standards in the Trump administration.
I suspect this approach would raise the bar in just about every organization.
Does this highlight a problem with other organizations, that allow employees to violate corporate policies and procedures with impunity? Do you have to sweat the small stuff to get the big stuff right?
Filed under Communicate, Communications, Compliance, Compliance, Controls, Corporation, Culture, Duty, Employees, Governance, Internal controls, Management
Today’s focus is on the exchange of price/sales/production information.
“OPEC Deal’s Challenge: Member Cheating,” The Wall Street Journal, December 12, 2016 B9. OPEC members agree on production cuts, but then cheat to meet their internal issues. The enforcement mechanisms at the cartel aren’t 100% effective.
So, in addition to complying with law, people shouldn’t agree with competitors about price, sales, or production because the other competitors will cheat. Don’t expect cheaters to live up to their promises.
Filed under Board, Communications, Compliance, Compliance, Controls, Corporation, Culture, Culture, Duty, Employees, Governance, Internal controls, Legal, Oversight, Requirements, Third parties
The exchange of price-related information between horizontally aligned competitors is often a no-no in the US.
“U.S. Poultry Producers Face Scrutiny,” The Wall Street Journal, December 12, 2016 B2. The Georgia Department of Agriculture compiles a price index based on input from chicken sellers, but not chicken buyers. This index is then used in establishing the prices paid by some buyers.
Is the government facilitating price fixing? For the chicken sellers, is it risky to share price information with anybody other than the buyer? Is this exchange contrary to company policy? Did the lawyers approve?
The discovery rules for discovery in litigation in the US Federal courts changed recently, drawing a distinction between electronically stored information and everything else. If it’s ESI, then it is more difficult to get sanctions for destroying evidence.
“FTC Claims VW Mobile Phones Missing,” The Wall Street Journal, December 10, 2016 B3. Twenty-three mobile phones assigned to people important to the investigation emissions scandal have been lost or wiped.
For those phones that were lost (as opposed to those that were wiped), what rules on sanctions apply? The ones applicable to ESI, or the ones applicable to tangible things? Or since it’s obstruction of justice, it just doesn’t matter? See 18 USC § 1519.
Filed under Access, Board, Compliance, Compliance, Controls, Corporation, Discovery, Duty, Employees, Governance, Information, Internal controls, Legal, Protect assets, Protect information assets, Value
Is it possible to allow too much information?
“U.S. Revisits In-Flight Phone Calls,” The Wall Street Journal, December 9, 2016 B1. Transportation Department considering letting people use their cell phones during airline flights.
Gone is one of the last refuges from overhearing someone else’s yak yak yak. If you’re the airline, is this a good thing or a bad thing? If you’re the Transportation Department, is this really what you should be governing? Shouldn’t it be an airline’s choice?
Do you think about the risk of the failure of a critical information transfer system?
“Bank Lost Its Ability To Process Payments,” The Wall Street Journal, December 8, 2016 B8. The Bank of New York Mellon temporarily lost its access to the SWIFT network, used to process payments within the banking system. Over nineteen hours.
Does your business have a similar business continuity risk, where a critical information transmission system is unavailable? Have you identified that risk and quantified its potential impact? Do you have controls (people, process, or technology, or some combination) to prevent the occurrence, or to limit its impact? Is this a Board responsibility? If not the Board, who?
Filed under Access, Board, Controls, Directors, Duty, Governance, Information, Interconnections, Internal controls, IT, Management, Protect, Risk, Risk Assessment, Risk assessment, Value
A corporation violates a rule and people die. Who gets pinched?
“Bolivia Detains Head Of Airline Over Crash,” The Wall Street Journal, December 8, 2016 A9. The co-owner of LaMia Corporacion SRL, the charter airline involved in the Bolivian airline crash last week was “detained.” A bit surprising, as LaMia is a corporation, which is a normally limited liability vehicle, where a shareholder’s financial liability is limited to his or her investment.
What would happen if the major shareholder of a US corporation were “detained” in a similar incident? How would other corporations then deal with compliance?