Category Archives: Compliance

Porsche raid

“Porsche Executive is Arrested,” The Wall Street Journal, April 21, 2018 B6.

In continuing fallout from the VW emissions cheating scandal, a senior Porsche executive (head of engine development) was arrested by German police and several offices and factories were raided.  A member of the Porsche board is also under investigation.

Fooling the emissions tests was not a great idea.

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Catching up

I was out of town for a bit, and am now catching up  So this will deviate from the usual one-story, one-post format.  19 squibs.

“ISS Opposes Five Equifax Directors,” The Wall Street Journal, April 17, 2018 B2.  A proxy advisor recommends against voting for members of the Board’s technology committee, who had responsibility for technology security.  Is that all that happens, they get fired?  157 millions accounts exposed and they get un-elected but not (yet) sued?  No claw-back of director’s fees?

“Facebook Data Dispute Embroils University of Cambridge,” The Wall Street Journal, April 16, 2018 B4. Cambridge says Facebook approved of the University’s use of Facebook data.  Or your data, if you wish.

“Fired FBI No.2 McCabe Misled Probe, Report Says,” The Wall Street Journal, April 14, 2018 A1.  Misleading an internal investigation into leak to the newspaper is not good.

“Volkswagen Prepares to Replace CEO, The Wall Street Journal, April 11, 2018 B1.  CEO who help VW survive the emissions scandal gets replaced. A palace coup after the company spent $25 billion+ on the scandal.  Is this more price for VW to pay?  And let’s not forget the shareholders, who foot the bill.  See also “VW Picks Chief After Boardroom Coup,” The Wall Street Journal, April 13, 2018 B1.

“Blunder Hits Samsung Securities,” The Wall Street Journal, April 11, 2018 B13. An employee’s mistake leads to mistaken issuance of $105 billion in shares, more than 30 times the company’s existing issued shares.  Do you have the right controls in place?  Is this an information governance issue?

“Facebook Hearings Put Regulation In Spotlight,” The Wall Street Journal, April 12, 2018 A1. Will the Facebook data leak/usage lead to new privacy regulation?

“Adviser Urges Shift On Board Of Equifax,” The Wall Street Journal, April 12, 2018 B10.  Does the company’s failure to avoid a cyber attack mean the board has to go?  Maybe.

“China’s Censors Zero In on Apps,” The Wall Street Journal, April 12, 2018 B4.  Chinese government extends control over a smartphone app that had crude jokes.  Now there’s enforcement of a policy, and a demonstration of what “governance” means.

“Zuckerberg Says Sorry for Harm Done,” The Wall Street Journal, April 10, 2018 B4.  Classic crisis management strategy:  admit you’re wrong?

“Sensing Urgency, Facebook Bolsters User Protections,” The Wall Street Journal, April 10, 2018 B5.  Locking the door after the horse bolted.

“Facebook Sets ‘Issue’ Ads Rule,” The Wall Street Journal, April 7, 2018 A1.  Does a background check on advertisers protect your privacy?

“YouTube Policies Stir Bitterness,” The Wall Street Journal, April 6, 2018 B1.  Following attack at YouTube HQ, taking a closer look at YouTube’s policies on filtering/restricting content.

“Facebook CEO: Lax Privacy a ‘Huge Mistake,'” The Wall Street Journal, April 5, 2018 A1.  Not focusing on privacy protections a “huge mistake.”  Really?

“Police Want to Send AI Into the Street,” The Wall Street Journal, April 4, 2018 A3.  Can body cams be used to collect “Person of Interest”-level information, real time?

“WPP’s Sorrell Faces Probe,” The Wall Street Journal, April 4, 2018 B1.  CEO of advertising company under internal investigation for misusing company assets.  It’s really just a question of duty.

“GM Scraps a Standard in Sales Reporting,” The Wall Street Journal, April 3, 2018 B1.  You manage what you measure.  So, no longer reporting this statistic will reportedly make it easier to measure performance.  Huh?

“Oracle Defeats Google In Court,” The Wall Street Journal, March 28, 2018 B1. Appeals court revives copyright infringement suit against Google.  $9 billion+ in damages alleged.

“Wedbush Accused Of Flawed Oversight,” The Wall Street Journal, March 28, 2018 B12.  SEC charges company with failure to properly supervise an employee involved in “long-running ‘pump-and-dump’ scheme.”

 

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It was nice being #2

“Nike No. 2 Executive Quits Amid Complaints,” The Wall Street Journal, March 16, 2018 B1.  “Nike brand president and a potential successor to [CEO] leaves position after complaints about “inappropriate workplace behavior.”

Why am I harping on the numerous resignations and dismissals over allegations of sexual harassment and similar? Isn’t this blog supposed to be about information governance?

At the core of governance is what rules you have and what rules you enforce.  High-profile violations of the law or the Code of Conduct, by high-profile executives, catches a lot of splash in the headlines.  Are some aspects of the Code of Conduct more worthy of enforcement than others?  If the company chooses to penalize high flyers for some violations, but not for others, do you really have compliance?

Employees have a duty to obey the law and to follow company policy.  All employees.  All policies.  Even those pesky ones about information.  Or is the company willing to allow some employees to violate some policies sometimes?

What enforcement steps has your company taken of late for violations of law or policy?  Do you know?  Do the shareholders?

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Are you responsible for your brother? Your cousin?

It’s bad enough trying to control your own employees, and those of your agents (and vendors).  But how do you control the employees, agents, and vendors of your various affiliates and ventures?  Do you all have the same Code of Conduct?  The same policies on a whole host of sensitive matters?

“KPMG Scandals Stay Local,” The Wall Street Journal, March 8, 2018 B10.  KPMG deals with alleged non-compliance at three international affiliates involved in auditing.

Does a client know the difference?  Do you ask prospective consultants about the compliance history of the larger firm?  Do you exercise enough control to also get liability?

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Secondary compliance

“More Firings at BofA Amid Misconduct Claim,” The Wall Street Journal, March 1, 2018 B1.  Two employees fired for interfering in investigation into allegations of sexual misconduct by another employee.  They may have gotten together to get their stories straight.

What does this say about culture at BofA?  Not just that there’s another instance of alleged sexual misconduct, but also that people would think they could influence the process?

Again, how do you protect against this type of behavior?  Is it enough to just publicly fire the violators?  Do you teach on the perils of interfering with an internal investigation?  This is, in all likelihood, solely a violation of policy (assuming you can find a policy that governs).  Maybe bad ethics?

 

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What’s security worth?

“Overstock.com Shares Fall on Crypto Probe,” The Wall Street Journal, March 2, 2018 B10.  After they disclose an SEC investigation into sales of digital tokens, share price drops nearly 5% (initially, it was worse).

I suspect the shareholders are not amused.  But will the compliance spending budget go up?  Are the tokens securities?  The legal spending will definitely increase.

Will the Board’s compensation keep pace?

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Two to tango

Two interesting stories on page B1 relating to governance:

“Ford Official Fired for Misconduct,” The Wall Street Journal, February 22, 2018 B1. Top executive fired for unspecified bad conduct.

“Disney Producer’s Behavior Criticized,” The Wall Street Journal, February 22, 2018 B1. Successful producer may act and speak inappropriately, but is still running the high-profile “Frozen” production.

How important is context?  One would think that the entertainment industry would be more sensitive than other industries in avoiding any hint of inappropriate (the PC term) behavior, and Disney in particular.

How does your company manage its culture?  Does it enforce the rules against top managers, or big money producers?  What does the Board say, both now and when something goes wrong (or is discovered) later?  Are violations and punishments publicized internally?

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