Category Archives: Employees

Kobe (3)

The adventure continues, after Kobe Steel announced earlier this month that workers at several different facilities had fudged paperwork on product quality, dating back to at least 2007.  Apparently, getting that type of paperwork accurate is important.  To someone.

“U.S. Looking Into Kobe Steel Scandal,” The Wall Street Journal, October 18, 2017 B3.  Department of Justice kicks off a request for information after company disclosures about practices in Japan. Affects product sold into manufacturers of train, planes, and cars.

More to follow.  Expect Congress to weigh in shortly.  Again, the problem occurred in more than one facility, over a period of years.  Is that a failure of compliance, or culture, or both?

An example of the intersection of governance, compliance, and information.

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Filed under Accuracy, Compliance, Controls, Corporation, Culture, Data quality, Definition, Duty, Duty of Care, Employees, Governance, Information, Internal controls, Oversight, Reliance, Use, Value

Raining, pouring

Why does it seem that when a certain type of crisis happens in one industry leader, similar crises pop up in other members of the same industry?  Does “culture” affect an entire industry?  What about a culture of “not reporting”?

“Amazon Executive Quits Amid Sex Claim,” The Wall Street Journal, October 18, 2017 A10. The head of Amazon Studios (who had close business relationships with Harvey Weinstein) “resigns” after a producer claimed he had sexually harassed her two years ago.

What does it say that there were so many unreported instances of sexual harassment in this industry (many coming out in recent weeks in various media outlets)?  Did people not complain or did people not respond?  Or was the press/media not interested, for any one of a whole host of reasons?

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Filed under Compliance, Controls, Corporation, Culture, Duty, Employees, Governance, Internal controls, Oversight, To report

Mulligan

This is a straight compliance piece, where a corporation is held liable for the misdeeds of its employees (agents).

“Wells Fargo to Pay $3.4 Million Over Advisers’ Flub,” The Wall Street Journal, October 17, 2017 B10.  Apparently, some of the bank’s financial advisers recommended volatility ETFs when they shouldn’t have.  The advisers also didn’t have adequate training.

This is straightforward.  Should some manager be fired or disciplined?  Maybe.  This would not seem the type of event that calls into question the Board’s duty to supervise, unless this is the third time this same compliance issue has arisen.  This is only the second time.  The bank paid nearly $3 million in fines and restitution in 2012 for a similar violation.

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Filed under Board, Compliance, Compliance, Compliance Verification, Controls, Corporation, Directors, Duty, Duty of Care, Employees, Governance, Internal controls, Oversight, Oversight, Requirements

Kobe (2)

“Kobe Steel Discloses More Reporting,” The Wall Street Journal, October 14, 2017 B3. Falsification of quality documents is much more prevalent than first reported at Kobe Steel.  Twice the number of customers now involved.  500.

Once you find a rotten apple, one can make certain assumptions about the rest of that barrel.  It’s a culture issue, at its core.

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Filed under Accuracy, Board, Compliance, Compliance, Compliance Verification, Controls, Corporation, Culture, Culture, Data quality, Definition, Directors, Duty, Duty of Care, Employees, Governance, Information, Internal controls, Oversight, Oversight, Policy, Protect assets, Protect information assets, Third parties

A top goal?

“CEOs Make Protecting Data a Top Goal,” The Wall Street Journal, October 13, 2017 B4.  Unfortunately, the focus is on cyber-security rather than the broader information risk profile.  While this affect CEOs’ email habits, as they are phishing targets?

While this is a start, do CEOs really understand how much their company’s proprietary information is worth?  Or their duty to protect the company’s assets (people, physical equipment, cash, and information)?  Why not?

And where are the boards?  Don’t they have an overarching duty to oversee the major risks the company is facing and to make sure there’s an effective program in place to address?

I hear the violin.  Is Rome burning?

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A failure of controls

What does it say about a company’s culture that allows a sexual predator to continue to run the company for years?  What other non-compliance with ethics and law will we find?  Not only there, but at every other company in the industry?  Nobody reported this?  Where were the policies and the audits?  Where were the lawyers?  Where was the press?

“Weinstein Co. Board Fires Harvey Weinstein, Citing Sexual Misconduct Allegations.”  The Wall Street Journal on-line, October 8, 2017.

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Disclosure

“A Hot Startup Misled Advertisers,” The Wall Street Journal, October 13, 2017 A1.  Outcome Health apparently misled advertisers as to how many units their ads were appearing on.  The investigation continues.

How would your employees react if ask to provide inflated numbers to potential customers?  How would your investors react after a story appears on page one, above the fold?  Probably reflects in the valuation of the company.  And what about your company’s extensive political contacts?

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Filed under Accuracy, Board, Communicate, Compliance, Compliance, Compliance, Compliance Verification, Controls, Corporation, Culture, Culture, Data quality, Directors, Duty, Duty of Care, Employees, Governance, Inform market, Inform shareholders, Information, Internal controls, Investor relations, Managers, Oversight, Oversight, Policy, Protect assets, Protect information assets, Use, Value