Category Archives: Employees

Another one bites the dust

“Barnes & Noble Details CEO Firing,” The Wall Street Journal, October 31, 2018 B1.  CEO allegedly fired for sexual harassment and bullying, and interfering with the sale of B&N.

So, the CEO gets canned.  No severance package.  What message does this send to the rest of the organization (and, indeed, to other CEOs and other companies)?  How does the Board look on this one?  From a Compliance standpoint, and a Governance one, looks pretty good.

Might this be a pretext?  Could he have been fired for some other reason?

 

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Filed under Board, Communications, Compliance, Compliance, Compliance (General), Controls, Corporation, Duty, Employees, Governance, Internal controls, Oversight, Supervision

Consequences

One of the consequences of non-compliance is a higher level of scrutiny from the regulators.

“Wells Fargo Places Two Executives On Leave,” The Wall Street Journal, October 25, 2018 B10.  The Comptroller of the Currency sent letters to two WF executives about their failures of oversight at the bank in connection with WF’s sales practices.  Execs (chief administrative officer and chief auditor) placed on leave and removed from operating committee.

Boy, does that ever not look good on your resume.

Why did the regulator have to do this?  One reason is that WF didn’t do it itself.  Would your compliance system do better?  Do the directors still have their jobs?

 

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Filed under Board, Compliance, Compliance (General), Corporation, Culture, Directors, Duty, Employees, Governance, Government, Oversight, Supervision, To report

Conduct matters

“Uber’s Top Deal Maker Quits After Conduct Claims,” The Wall Street Journal, October 23, 2018 B3.  Senior executive (48) resigns after allegations of sexual misconduct.  Also alleged to have violated company policy with a consensual affair with a colleague.

See also https://infogovnuggets.com/2018/10/15/enforcement/ for an earlier nugget on this point.

So, a higher-up gets the heave-ho after bad conduct.  I guess the Compliance program has teeth.  But it did take a long time.  Firing (or moving aside) a high-producer shows a company’s commitment, even at a company with a bad history.  Did he get a package?  Multiple messages here.

 

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Filed under Communications, Compliance, Compliance (General), Controls, Duty, Employees, Governance, Oversight

Leaker arrested

“Treasury Employee Is Accused of Leaks,” The Wall Street Journal, October 18, 2018 A4. Employee arrested for allegedly disclosing confidential banking information about Paul Manafort, among others, to a reporter at BuzzFeed.

Leaking your employer’s information is hazardous to your health and freedom.  But it’s good to know the government takes compliance seriously.

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Filed under Compliance, Compliance (General), Controls, Duty, Duty of Care, Employees, Governance, Government, Internal controls, Oversight, Policy, Protect assets

Finding fakes

“On Hunt for Disinformation,” The Wall Street Journal, October 18, 2018 A3. Digital detective for the Vietnam Veterans of America tracks down fake Facebook pages used to scam veterans.

Is protecting your customers from fraud part of your offering?  Are you concerned about someone else using your logo?  Do you expect Facebook to care that much (hint: it doesn’t)?

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Filed under Accuracy, Compliance, Controls, Corporation, Duty, Duty of Care, Employees, Governance, IT, Oversight, Protect assets, Security, Third parties

What would Kris say?

Would Macy’s tell Gimbels?  Miracle on 34th Street.

“EBay Alleges Incursion by Amazon,” The Wall Street Journal, October 18, 2018 B2.  Amazon accused of stealing customers by penetrating EBay’s internal emessaging platform and breaching EBay’s rules.

What’s your information worth to you?  What’s it worth to your competitors?  How well is it protected?  What controls do you have on the acts by your employees, especially when accessing the systems and information of your competitors?

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Filed under Access, Compliance, Compliance (General), Controls, Corporation, Duty, Employees, Governance, Information, Internal controls, IT, Oversight, Protect assets, Security, Technology, Third parties, Value

Hackers look to make money

That’s a catchy headline.

“Facebook Thinks Hack Was Set by Spammers,” The Wall Street Journal, October 18, 2018 B1. FB says recent breach of ~30 million accounts was by spammers wanting to make profits, and not by nation states with evil motives.  FB will likely never find who took the information.

This raises a whole host of issues about information ownership and the duty of companies who handle and store your data.   And IT security, or insecurity.  Which is your favorite?  I personally favor what this says about the culture at FB; with these issues, the FB communication to the market and its shareholders and its customers speaks volumes about how FB views the risks of its business.  So now a denial is Information, by definition.

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Filed under Access, Communications, Compliance, Compliance (General), Controls, Corporation, Culture, Definition, Directors, Duty, Duty of Care, Employees, Governance, Information, Interconnections, Internal controls, Investor relations, IT, Oversight, Ownership, Privacy, Protect assets, Security, Technology, Third parties, Who is in charge?

Is this a fire or a petition?

We all know (well, maybe) that one of the limits on the First Amendment right of freedom of speech is that you may not falsely shout “Fire!” in a crowded theater (people often omit the “falsely”).  But the First Amendment also includes the right “to petition the Government for a redress of grievances.”

“New York Probes Fake FCC Comments,”The Wall Street Journal, October 17, 2018 A4.  NY attorney general investigates the use of fake names on comments submitted to the FCC on the net neutrality issue.

Leaving aside the post-decision history of the case (US v. Schenck has been effectively overruled) and whether the statements by Justice Holmes were dicta, not law (in a case about political speech by a Socialist), it is interesting to consider whether a lobbying firm can be prosecuted (much less convicted) for misleading speech to a government agency.  From a Governance perspective, doesn’t the Constitution govern?  Don’t the lobbyists have an absolute right to petition the government?  Is the Constitution both an instrument of Governance and a control on how much the government can control Information?  Are there analogous cases involving the common law controls on an employee’s conduct?

Also, is there a point to be made here about not really knowing the context of history and famous phrases?

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Filed under Accuracy, Compliance, Compliance (General), Controls, Corporation, Duty, Employees, Governance, Government, Internal controls, Third parties

Information delayed

“Advertisers Allege Facebook Put Off Disclosing Error,” The Wall Street Journal, October 17, 2018 B1.  Facebook sued two years ago for knowing the statistics on how long users were looking at videos were flawed, overstating the average time videos were viewed but failed to let the advertisers know.  So advertisers paid for posting videos based on inaccurate information from the seller (Facebook).

I guess one could comment on the culture at Facebook that would permit this behavior, or upon the Compliance implications of the apparent failure to punish anybody (employees, directors) for this apparent breach of customer trust. But instead one could focus on how much value Facebook derived from not disclosing information about known defects in its processes.  So, either (a) the definition of Information includes information you don’t disclose or (b) the value of information can include the value of not disclosing it.

The documents turned over in discovery are not favorable to FB.

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Filed under Accuracy, Communications, Compliance, Compliance (General), Controls, Corporation, Culture, Data quality, Definition, Directors, Duty, Duty of Care, Employees, Governance, Information, Internal controls, Oversight, Reliance, Supervision, Technology, To report, Value

Hiding another ball

“HSBC to Pay $765 Million in U.S. Pact,” The Wall Street Journal, October 10, 2018 B12.  Bank hid the risks of defective mortgages for at least 2 years.  Sold mortgaged-back securities in the meantime.

“Wells Fargo … [paid] $2.09 billion to settle similar claims.”  Four other banks also settled.

Why do we keep our money in banks?  Weren’t they supposed to be safe?  What does it say about the Boards of these companies?  Did the directors screw up?

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Filed under Communications, Compliance, Compliance (General), Controls, Corporation, Culture, Directors, Duty, Duty of Care, Employees, Governance, Information, Internal controls, Investor relations, Oversight, Protect assets, Supervision, To report