Compliance with law and compliance with policy and procedure are relatively easy to establish. But compliance with ethics?
“Journal Reporter Fired Over Ethics,” The Wall Street Journal, June 22, 2017 A2. A foreign affairs reporter at The Wall Street Journal was fired for something related to “his dealings with an aviation tycoon whom he had cultivated as a source.” Further details weren’t provided. It may have been the offer from the tycoon of a share in one of his companies. Perhaps he wasn’t totally honest with the paper about something (but we don’t know what, yet). A violation of journalistic ethics?
All this may have been revealed following a hack of email or text messages, or both.
Seems a bit squishy without more details as to what were the ethics and what was the violation. Were I a reporter for the paper, I’d be curious what the lines were and how were they crossed. This perhaps goes beyond the common stricture of “Don’t lie, cheat, or steal.”
Were this a corporate exec or a governmental official, would we get more detail? Who checks the checkers?
How do you deal with claims of sexual harassment? Have two law firms conduct investigations and fire 20 people. But will that be the end or the middle?
“Uber Fires Over 20 In Wake Of Probe,” The Wall Street Journal, June 7, 2017 B1. Over two hundred claims investigated and no action taken in 100 of them.
Were there supervisors who participated or condoned or who failed to notice or respond? Were there reporting practices and policies in place? If harassment was “accepted” in the Uber culture, who’s to blame? HR? The Board? Management? How long had this been going on? How much will the shareholders have to pay?
A summary of one of the law firm reports is due out soon.
Filed under Board, Compliance, Compliance, Compliance, Controls, Corporation, Culture, Culture, Duty, Employees, Governance, Internal controls, Management, Oversight, Oversight
Executives do go to jail. “Ex-VW Official to Stay in Jail,” The Wall Street Journal, May 26, 2017 B3. The official was head of the environmental and engineering office. VW had already pleaded guilty to criminal charges in connection with the diesel emissions scandal. So the company AND some executives are criminally charged! Guess Sally Yates meant it. At least for foreign companies. But no directors have been sued. Yet.
“FBI Holds Memos for Now,” The Wall Street Journal, May 26, 2017 A4. Congress wants the memos that ex-Director Comey wrote, but the existence of the special counsel (also the ex-Director) and Congressional “inquiries” have muddied the waters. Whose information is it, anyway? And can’t we all look at them together? Right after Mr. Comey testifies? Interesting that the FBI can withhold non-privileged memos, whatever their weight may be.
Chairman doesn’t go to jail. “Leader of Brazil’s JBS Steps Down,” The Wall Street Journal, May 27, 2017 B1. The bribing scandal in Brazil’s meat-packing industry removes the chairman and his brother from the Board (although the brother remains as CEO). The chairman signed a plea bargain in exchange for criminal immunity. Curious about the culture at the company after the plea deal.
Filed under Board, Compliance, Compliance, Compliance, Controls, Corporation, Culture, Culture, Directors, Duty, Employees, Governance, Information, Internal controls, Investor relations, Management, Oversight, Oversight, Ownership
“FCC Won’t Move Against Colbert for Crude Remarks,” The Wall Street Journal, May 24, 2017 A3. Remarks about Trump don’t draw a fine. The question remains, what will? What’s the impact of the regulator not even trying to enforce regulatory standards?
“Pakistan Investigates Social-Media Critics of Its Military,” The Wall Street Journal, May 24, 2017 A8. Twenty-seven critics investigated for “unacceptable” comments criticizing and ridiculing the military and judiciary. The FCC wasn’t consulted.
2. “U.S. Sues Chrysler Over Emissions Tests,” The Wall Street Journal, May 24, 2017 B1. Apparently VW wasn’t the only one seeking to game the emissions-testing process.
3. “Human Still Rule Machines in Insurance,” The Wall Street Journal, May 24, 2017 B1. Despite the new sources of data, and the ability of computer programs to determine how much an individual insurance policy should cost, humans are still a necessary decision-maker.
4. “Target Settles Probe Into Its 2013 Hack,” The Wall Street Journal, May 24, 2017 B3. Following the 2013 data breach, Target pays an additional $18.5 million to settle state charges.
5. “High-Ranking Chinese Regulator Faces Probe,” The Wall Street Journal, May 24, 2017 B14. Assistant chairman of the China Banking Regulatory Commission fired for breaking the rules. Details not available.
Filed under Accuracy, Analytics, Compliance, Compliance, Controls, Corporation, Culture, Duty, Employees, Governance, Government, Information, Internal controls, Management, Managers, Oversight, Supervision, Value
Does your radar go wild when someone suggests delaying the report of information?
“Sunrun Sales Data Seen as Skewed,” The Wall Street Journal, May 23, 2017 B1. In the run-up to the company’s IPO, some managers were told by their managers to hold off on reporting a number of canceled contracts. Reporting this information would have reduced the sales numbers, as the canceled contracts were a large percentage of total orders.
What does it say about a culture where the bosses ask managers to do this type of thing? And no one says, “No”? Was no one bright enough to connect the dots? What else is suspect? Are employees clueless as to their common law duties to report wrong-doing or deviations from company processes?
Filed under Accuracy, Compliance, Compliance, Controls, Culture, Data quality, Duty, Employees, Governance, Internal controls, Management, Managers, Oversight, Supervision, To report
Another company much in the news of late: Wells Fargo. Account cramming over a period of years. To get bonuses. Shearman & Sterling report.
“Wells Investigated Whether Executives Steered Business,” The Wall Street Journal, May 11, 2017 B10. Three executives in private banking business are reportedly fired or suspended. The allegation is that some clients were channeled away from people in the bank “who may have been better equipped to handle certain client needs.” Maximizing bonuses may be at issue; apparently, the best interests of the clients were subordinate. Following internal processes and procedures apparently is also optional.
This is what we know this week. What will we know next week? How deep does the rot in ethics and compliance go? What messages are the remaining employees getting? The Board is still in place. Who’s accountable?
The CEO tries not once but twice to get the company security people to investigate who raised a stink over one of the CEO’s buddies getting hired. The CEO gets a formal reprimand and gets his bonus docked. Now the Chairman of the Board supports the CEO.
“Barclays Chairman Backs CEO Amid Shareholder Calls for Firing,” The Wall Street Journal, May 11, 2017 B3. Barclays also got hit for $97 million to settle an over-billing claim. The CEO also tried to intervene with one of the bank’s major clients that was in a dispute with the CEO’s brother-in-law. Nearly all the shareholders voting at the annual meeting also supported the CEO (some abstained).
The WSJ article ends with
On Wednesday, the SEC said Barclays improperly recommended more expensive share classes, charged fees to clients for due diligence and monitoring services that weren’t performed and collected extra mutual-fund sales charges and fees.
What does this say about the culture (a) on the Board, (b) for the Barclays shareholders, and (c) the employees see? How does the SEC (and other regulators) view them?
Filed under Board, Compliance, Controls, Corporation, Culture, Culture, Directors, Duty, Employees, Governance, Internal controls, Investor relations, Oversight