Category Archives: Culture

GE

GE, fresh from the embarrassing disclosure that the Board didn’t know about the two-jet policy, is now being questioned by the SEC over its accounting practices.

“GE Faces An SEC Probe of Accounts,” The Wall Street Journal, January 25, 2018 A1.  Questions arise over how GE accounted for revenue on long-term projects.

How did the Board miss this, too?  The new CEO must be beside himself.  Welcome to the party.

 

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Filed under Accuracy, Board, Compliance, Compliance, Controls, Corporation, Culture, Culture, Directors, Duty, Employees, Governance, Inform market, Inform shareholders, Internal controls, Oversight, Oversight

Catching up

I’ve taken a bit of a break; one of the readers of this blog asked if I’d stopped writing it.  Not that there aren’t issues on governance, information, or (and) compliance that come up daily.

Is this blog of value?  Is it worth your time?  Let me know.  How can I improve this?  Let me know by posting a comment.

Some recent stories:

  1. “Subaru Probes if Fuel Data Was Fake,” The Wall Street Journal, December 21, 2017 B1.  Company investigating whether workers fudged the numbers on fuel economy.  Another black eye for the Japanese quality objectives.  Is there/was there a culture problem?  Or did management apply too much pressure?
  2. “Wells Fargo Earns New Ire From Bank’s Overseers,” The Wall Street Journal, January 6, 2018 B10.  Bank regulators marked Wells Fargo down because of its management, and as a result the bank will pay higher insurance and be subjected to higher regulatory scrutiny.  2017 wasn’t a good year for the bank.
  3. “Court to Review SEC Judges,” The Wall Street Journal, January 13, 2018 B10.  The Court accepted an appeal that will look at whether SEC’s judges are unconstitutional, having been selected by the HR Department.  Do government agencies need to comply with the US Constitution?  Can one be “governed” by someone who wasn’t properly appointed or supervised?  Is the common law writ of quo warranto still effective?
  4. “Parents’ Dilemma: When to Give the Children Smartphones,” The Wall Street Journal, January 13, 2018 A1.  Giving your child a smartphone also gives them access to a whole bunch of stuff you might wish they didn’t have so much access to.  Are you properly governing how much information your kids can see?  Do you also provide them a handgun (without bullets, of course)?  (The article talks about teaching your children to use cocaine, but in a balanced way). Not all information accessible by smartphone is of equal value, and different parties in the transaction value different information differently.

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Filed under Access, Accuracy, Compliance, Controls, Corporation, Culture, Data quality, Directors, Duty, Duty of Care, Governance, Government, Information, Internal controls, Oversight, Security, Third parties, Value

Wells Fargo, again

“Wells Fargo Gets New Warning,” The Wall Street Journal, November 30, 2017 B1.  Feds may take enforcement action over the company’s auto-insurance and mortgage operations.

Will the shoes ever stop dropping at Wells Fargo?  Once you are shown to be non-compliant, do you get stuck under the regulatory microscope?

How’s that suit against the directors going?

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

Covert units

It’s a bad sign when you establish a covert unit.

“Uber Formed Covert Unit to Steal Trade Secrets, Ex-Employee Says,” The Wall Street Journal, November 29, 2017 A1. According to a former security employee, Uber “had a team dedicated to stealing [competitors’] trade secrets and helped employees dodge regulators’ scrutiny.”

This information was in a letter read to the jury in the Alphabet/Uber trade secret litigation.  Ouch.

What does it say about the company’s commitment to compliance with law (including the rights of others)?  Are RICO charges far behind?

If Uber loses the case, will shareholders sue the directors who allowed this to happen?

 

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Filed under Board, Compliance, Compliance, Controls, Corporation, Culture, Culture, Directors, Duty, Duty of Care, Employees, Governance, Internal controls, Management, Oversight, Oversight, Supervision

Wells Fargo, continued, again

“Wells Fargo Bankers, Chasing Bonuses, Overcharged Clients,” The Wall Street Journal, November 28, 2017 A1.  Only 35 of 300 companies had been charged only what they had agreed to.  Four foreign-exchange bankers fired.

Who is surprised?  The culture at the company was potentially fatally defective.

Why hasn’t the Board been held liable?  The directors utterly failed in their fiduciary duties.

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Filed under Board, Compliance, Compliance, Compliance Verification, Controls, Corporation, Culture, Culture, Directors, Duty, Duty of Care, Employees, Governance, Internal controls, Oversight, Oversight, Protect assets, To report

More executive firings

“Security Shake-Up At Uber,” The Wall Street Journal, December 4, 2017 B4.  Three members of Uber’s security team resigned.  Voluntarily.  And another is on extended medical leave.

This after Uber recently disclosed a data breach a year ago that exposed 57 million user accounts.  And after reports of a team established to access competitors’ technology.

Culture, anyone?  Or attempts to protect the brand at the expense of employees?

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Filed under Compliance, Controls, Corporation, Culture, Duty, Duty of Care, Employees, Governance, Internal controls, IT, Oversight, Protect assets, Security

Another one bites the dust

“Steinhoff’s CEO Resigns Amid Accounting Probe,” The Wall Street Journal December 7, 2017 B3.  Off-balance sheet accounting leads to resignation of CEO of parent company of Sleepy’s (a mattress brand), and a drop of 62% in share value.

Where was the Board?  Where were the auditors?  Trying out the company product?

Who pays the price of management’s failure?

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Filed under Accuracy, Compliance, Compliance, Compliance Verification, Controls, Corporation, Culture, Duty, Employees, Governance, Information, Internal controls, Oversight, Oversight, To report, Value