Category Archives: Compliance (General)

Controlling speech

How does one control speech in the public forum without encroaching upon fundamental freedoms?

“On Social Media, a Battle Is Brewing Between Bots and Trolls,” The Wall Street Journal, August 11, 2018 B7. Blocking some speech and some speakers would be bad if the government did it.  But is it better if private companies do it, especially when they have pervasive power over the communications streams currently in use?

There’s battle brewing, indeed.  Are the Facebooks and Googles of the world mere utilities getting paid solely for carrying content from all comers, with no power (or financial interest?) over the content they carry, or are they publishers with some accountability?  If the technology tools they use to screen out the “bad” stuff (terrorists, for example) also screen out unpopular (to someone) speech, who pays damages?

If a company is quasi-governmental, shouldn’t it be subject to quasi-constitutional limitations?

This seems to me to be Governance, Compliance, and Information.

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Filed under Data quality, Governance, Communications, Controls, Third parties, Internal controls, Compliance, Access, Duty, Accuracy, Corporation, Government, Compliance (General)

Loose lips, revisited

The prior post was about what you say and in what medium.  So’s this one.

“SEC Probes Musk Tweets On Possible Tesla Buyout,” The Wall Street Journal, August 9, 2018 A1.  Were Elon Musk’s tweets about having lined up financing for a buyout false or misleading?  The SEC may want to know.

So, is information false or misleading?  I thought we had freedom of speech?  And (altogether too much) freedom to tweet?

Falsely shouting fire in a crowded theater is still a bad thing (thank you, Justice Holmes).  As is misleading your shareholders.

Should a CEO of a listed company know better?  Loose lips sink ships.

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Filed under Accuracy, Communications, Compliance, Compliance (General), Controls, Corporation, Definition, Duty, Employees, Governance, Information, Internal controls, Investor relations

Penalties

A key element of either Compliance or Governance (or both) is penalizing violations.  Otherwise, the rule is on paper only, and isn’t real.

“U.S. Steps Up Grid Defense,” The Wall Street Journal, August 6, 2018 A1. Government devising new penalties for foreign (and domestic) agents who hack into critical infrastructure.

Sounds good.  But might we be better off with a few more ounces of prevention (education, technology controls, testing, etc.)?  The “internal” controls.  By the time you’re penalizing folks, you’ve been hacked.

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Filed under Access, Compliance (General), Controls, Duty, Governance, Government, Interconnections, Internal controls, IT, Security, Technology, Third parties

Shoot for the stars

Nailing a high-visibility target demonstrates that you’re serious about compliance.  Especially if he or she is a big money maker.  And especially if it is over violations of your company’s procedures.

“GAM Says Fund Manager Breached Policies on Gifts,” The Wall Street Journal, August 7, 2018 B10.  “[T]he star fund manager” also used his personal email to transact business for the company, and failed to follow other company procedures.

The company’s shares have dropped 44%.

Would you be surprised if your company did this?  What does that say about your culture?

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Filed under Compliance, Compliance (General), Controls, Corporation, Duty, Employees, Governance, Internal controls, Oversight, Policy

How much due process is due?

“CBS to Weigh CEO’s Fate,” The Wall Street Journal, July 30, 2018 A1.  Discussion over whether CEO accused of sexual harassment should stand down while the investigation continues.

Curious that Urban Meyer has to stand aside while an investigation into whether he should have reported domestic abuse by an assistant coach 9 years earlier at a different school, but Leslie Moonves remains on board as the CEO of CBS.  See https://infogovnuggets.com/2018/08/07/caesars-wife/

What does it say about a company’s culture when, in the current environment, the CEO can remain in his job during such an investigation?  How convinced are the rank-and-file employees that the sexual harassment policy is real, or just a piece of paper?  Are the directors serious about this policy?  What about other policies?

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Filed under Board, Compliance, Compliance, Compliance (General), Corporation, Culture, Culture, Directors, Duty, Employees, Governance, Oversight, Oversight, Policy

We didn’t know

Knowledge, or lack thereof, is often a good defense.

“Fiat Says It Didn’t Know CEO was Ill,” The Wall Street Journal, July 27, 2018 B1.  Company says privacy of health care information meant they didn’t know that their CEO had been sick for a year.

Who knew or should have known?  Was this insider information that would affect the value of investments?

Should the Board have known?  Did the CEO have a duty to disclose?  For more than a year!

Governance, Compliance, and Information.  All in one.  Add a dash of privacy.

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Filed under Access, Accuracy, Board, Communications, Compliance, Compliance (General), Compliance Verification, Controls, Corporation, Directors, Duty, Employees, Governance, Inform market, Inform shareholders, Internal controls, Investor relations, Oversight, Privacy, To report, Uncategorized

Churn ’em, Burn ’em, and Learn ’em

More of the same old stuff.

“Advisers Blew Whistle on Wells Fargo Wealth Unit,” The Wall Street Journal, July 28 2018 B1.  Sales incentives drive improper behavior at Wells Fargo.  Again.

The good news is that four Wells Fargo financial advisers tipped off the DOJ and the SEC to what was happening.  High-wealth investors were steered to investments that would result in higher fees paid to Wells Fargo.

So the culture wasn’t entirely corrupt.  There’s hope.

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Filed under Compliance, Compliance (General), Controls, Corporation, Culture, Duty, Employees, Governance, Internal controls, Investor relations, Policy, To report