Category Archives: Managers

Trade Secrets

An employee leaves Company A and starts a new one, Company B, which is in turn acquired by Company C, a competitor of Company A.  Company C develops a laser sensor for self-driving cars.  Company A sues, alleging the employee downloaded 14,000 files before departing, including information about laser sensors and supplier lists and manufacturing details.

“Alphabet Sues Uber Over Trade Secrets,” The Wall Street Journal, February 24, 2017 B3.

How do you protect the company’s technology jewels?  How do you limit and track access?  How do you ensure that a new employee isn’t bringing something he or she shouldn’t have?  How did the directors and managers allow this to happen, at both Company A and Company C?  Is this information no longer a trade secret because Company A didn’t protect it well enough?

Leave a comment

Filed under Access, Compliance, Compliance, Controls, Corporation, Duty, Duty of Care, Employees, Governance, Information, Internal controls, IT, Management, Managers, Oversight, Ownership, Protect, Protect assets, Security, Third parties

Housebreaking a puppy

Governance, whether it’s information governance or just plain governance, requires that you punish those who get caught breaking the rules.  Otherwise, the rules are more like guidelines.  And as when housebreaking a puppy, you should apply the “correction” as close as possible in time to the occurrence of the “breach.”  That includes supervisors.

“Wells Fires 4 Senior Managers Over Sales Practices,” The Wall Street Journal, February 22, 2017 B1.  Now-former Wells Employees include the Chief Risk Officer for retail banking, an executive in Arizona retail banking, a consumer-credit executive (formerly a Los Angeles retail banking executive), and a retail banking strategy and finance executive.  This follows the hold-back of 2016 bonuses for the new CEO and the CFO.  And a fine of $185 million and the termination of 5,300 other employees.  The alleged misdeeds at Wells began in 2009 or 2010.

Better late than never.

Leave a comment

Filed under Board, Compliance, Compliance, Compliance, Controls, Corporation, Directors, Duty, Employees, Governance, Internal controls, Management, Managers, Oversight, Oversight, Supervision, To report

It’s a start

“Wells Board To Cut Off Bonuses,” The Wall Street Journal, February 9, 2017 B2. In the continuing saga of the Wells Fargo account-cramming saga, the Board may withhold or reduce bonuses to some senior execs.  This follows the sacking/early retirement of the former CEO.

So, the shareholders pay $185 million in fines and settlements and the CEO “retires.” The Board reduces or cancels senior executive bonuses.  Boo hoo.

What pain to the Board for their failure to catch this?  Does their compensation get reduced?  Should it?

Leave a comment

Filed under Board, Compliance, Compliance, Controls, Culture, Directors, Duty, Employees, Governance, Internal controls, Investor relations, Managers, Oversight, Oversight, Supervision

Serious about Quality?

Is information important in your company?

“Nuclear Supplier Hit Over Safety,” The Wall Street Journal, February 7, 2017 B3.  A key supplier of equipment to nuclear power plants was investigated, and “extensive management weaknesses” were found to have led to the coverup of manufacturing problems at a plant in France.  Manufacturing records “had been haphazardly altered.”

How can you have quality (or safety, or legal or policy compliance) when people fudge the underlying information that you rely upon?  How far up the chain do the management weaknesses extend?

Leave a comment

Filed under Accuracy, Collect, Controls, Data quality, Duty, Employees, Governance, Information, Internal controls, Management, Managers, Oversight, Protect, Value

Why do supervisors get the big bucks?

Sometime head feints are acceptable; sometimes they are felonies.

“Citi to Pay Fine Over ‘Spoofing’ Tactics,” The Wall Street Journal, January 20, 2017 B12.  Traders entered large orders, intending to immediately cancel them, hoping thereby to fool the market.  This has been against the law since 2010.  Cost: $25 million in fines.

The supervisors of the traders were accused of failing to supervise.  Scolding, but not reporting, the offending trader was not sufficient.  Unclear whether the supervisors will themselves be prosecuted.

What does it say about governance when the people responsible for making sure traders operate legally aren’t penalized when the traders stray?  Perhaps if the government or the company penalized the supervisors (or their supervisors), the traders and others would get the compliance message.  Citi paid the fine, but the Citi shareholders bear the costs.

 

1 Comment

Filed under Controls, Duty, Employees, Governance, Internal controls, Managers, Supervision, To report