Who’s in charge of the executive branch? A basic governance question.
“Showdown Looms at Consumer Agency,” The Wall Street Journal, November 27, 2018 A1. Temporarily, we have two acting directors of the Consumer Financial Protection Bureau, one designated by the President and one appointed by the outgoing director (and suing to have a court determine that she’s really in charge).
Leaving aside for the moment whether the CFPB in constitutional, it’s probably important to have a place a mechanism for knowing who’s in charge.
The courts will sort it out, eventually.
“Wells Fargo Fires A Top Official, The Wall Street Journal, November 18, 2017 B1. Head of commercial lending canned because he said bad things to a fellow employee about regulators (and how they were affecting golden parachute payments) .
Think about that. He didn’t write it down; he just said it. Not outside the company, even.
True, his firing may have been expedited by all the other legal issues Wells Fargo has been having. But he may not have gotten much of a parachute.
Information controls apply to unwritten information, too.
Filed under Communicate, Communications, Compliance, Controls, Culture, Definition, Duty, Employees, Governance, Information, Internal controls, Management
“Nissan Report Faults Management,” The Wall Street Journal, November 18, 2017 B3. Factory workers falsified inspection data. Nissan recalls 1.2 million vehicles. Did management press too hard when setting targets?
Everyone on the manufacturing floor knew the inspections were being done by under-qualified workers, and hid it from the inspectors. Management was clueless. Practice was the norm for nearly 30 years.
Would your culture allow this to happen in your company?
Filed under Accuracy, Compliance, Compliance, Controls, Corporation, Culture, Data quality, Directors, Duty, Duty of Care, Employees, Governance, Internal controls, Management, Oversight, Policy, Protect assets, To report
“Russian Firm Was Long Seen as Threat,” The Wall Street Journal, November 18, 2017 A2. Questions as to the Kaspersky antivirus software company were raised by military intelligence in 2004, well before the 2013 threat assessment issued Pentagon-wide.
Who dropped the ball? Did the Russians have an inside track?
Filed under Access, Communications, Controls, Duty, Duty of Care, Governance, Government, Information, IT, Oversight, Security, Supervision, Value
“Faked Data at Issue Again in Japan,” The Wall Street Journal, November 25, 2017 B1. Mitsubishi Materials continued to ship car, plane, and power-plant parts to 200 customers (including in the US) while factory workers were fudging quality data on rubber gaskets and copper products. As is common, they sat on the news for a while.
This follows similar stories about Kobe Steel and Nissan Motors. So much for the much-vaunted quality initiatives in Japan. These types of problems “have deep roots in Japan Inc.’s governance problems,” which rely on decentralized and largely independent operations.
If there’s a problem somewhere else in your industry, you probably have it, too; you just haven’t found it yet.
Filed under Accuracy, Board, Compliance, Controls, Corporation, Culture, Data quality, Directors, Duty, Duty of Care, Employees, Governance, Internal controls, Managers, Oversight, Protect assets, Supervision, To report, Vendors
“Police See Social Media Fuel Crime,” The Wall Street Journal, November 25, 2017 A3. Immediate access to information “played a major role in escalating disputes….”
One assumes that this is true whether the information spread on social media is or isn’t true. Is a lie halfway around the world before the truth gets its shoes on?
What are the social implications of so much (unfiltered and unverified) information being made available to so many so fast? Who has a duty to verify or filter it? How do you control this within the confines of your business? Do you have a duty to? Is the control only common sense?
“SEC Accuses Long Island Town of Fraud,” The Wall Street Journal, November 24, 2017 B11. SEC alleges town failed to tell bondholders about special loan deals. Town feels victimized, as the town board didn’t know of the special deals.
If you have a duty to disclose certain information, and don’t disclose it, that is called either “failure to disclose” or “fraud.” Or a failure of management. There are certain things that, as a director, you are supposed to know.
Board members are fiduciaries.
Filed under Accuracy, Board, Communications, Compliance, Compliance, Corporation, Data quality, Directors, Duty, Duty of Care, Governance, Inform market, Inform shareholders, Investor relations, Oversight, Supervision, To report, Value