Category Archives: Culture

Taking ownership

What’s the most effective way to let management know there’s a sexual harassment problem in your workplace?  Who owns the culture at your company?

“Google Workers Walk Out In Protest,” The Wall Street Journal, November 2, 2018 B1.  Thousands walked out in protest.

Certainly, a different vector for applying pressure; perhaps better than coming from the investors.  If there’s something wrong with your company’s culture, can you take action?  Is this limited to sexual harassment?  Is this evidence of harassment in any of the pending actions?

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Filed under Controls, Culture, Governance, Oversight, Ownership

Fraud at the top

“Former Goldman Bankers Charged,” The Wall Street Journal, November 2, 2018 A1. “Two senior … bankers allegedly paid bribes and stole and laundered money … [in] one of the biggest financial frauds in history.”

What does it say when two of your 435 partners and one of your managing directors commits a fraud?  Failures in systems/controls?  Bad culture?  Do you have a “cowboy atmosphere” in Asia?  Poor training?  Are these rogue employees?  What’s the impact on your reputation?  What was the tone at the top?

This is primarily a Governance point.  How will the new CEO handle?

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Filed under Compliance, Compliance (General), Controls, Corporation, Culture, Directors, Duty, Duty of Care, Employees, Governance, Oversight, Policy, Supervision, Who is in charge?

Managing information

What does it say when you try too hard to “manage” the information that gets out?  Do you have the necessary “control” of that information?  When you try to “control” it, what does it say about you when the information gets out anyway?

This sounds like “the risk of selectively releasing information.”

“Turkey Slams Saudis Over Lack of Clarity About Slain Journalist’s Body,” The Wall Street Journal, November 1, 2018 A9.  Changing stories on the death of Jamal Khashoggi.

Apparently, there are international norms on what you need to say and how you need to say it, even if it information concerns events within a consulate.  Was disclosure legally required?  Maybe not, at least legally.  But when you do disclose, it’s a good idea to do so honestly.  Especially if someone else gets the information.

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Filed under Accuracy, Communications, Compliance, Controls, Culture, Duty, Governance, Government, Information, Internal controls, To report

How much process is due?

“School Assault Policy Shifts,” The Wall Street Journal, November 1, 2018 A3.  New regulations to require students accused of sexual assault to have the right to cross-examine the accuser.

This involves Governance, Compliance, and Information.

Governance:  the government would require schools to investigate sexual assault claims in a certain way.  The government has the power of the purse, due to the amount of federal funding.

Information:  an accusation of assault is only a part of the story; only through cross-examination and other investigation can the decision maker decide whether the accusation and the (assumed) denial are sufficiently “believable” and “believed.”

Compliance: determining whether someone complied with the law or your policy requires some level of rigor.  How much evidence of a violation is required?

 

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Filed under Compliance, Compliance (General), Controls, Corporation, Culture, Duty, Governance, Information, Internal controls

Employees speaking up

At common law, an employee has a duty

  • to comply with applicable laws in the performance of his/her work for the employer
  • to comply with his/her employers reasonable instructions in the performance of that work, and
  • to report material information to his superiors.

“Credit Union Staff Faults Safeguards Against Laundering,” The Wall Street Journal, October 31, 2018 B12.  Employees raised concerns in 2017 about the anti-money laundering program at the credit union where they worked.  The chief audit executive dismissed the allegations.

Were these employees rewarded for raising these concerns? No.  Did the company make changes?  The company says it did.  Will other employees raise concerns in the future?

How seriously do you take concerns raised by your employees, who are closest to the facts?  Is this a Compliance point or a Governance point?  Or an Information point (in that Management received information and apparently didn’t use it)?

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Filed under Compliance, Compliance (General), Controls, Culture, Duty, Employees, Governance, Information, Internal controls, Oversight, Third parties, To report, Use

I know it when I see it

“Irish Vote to Remove Law on Blasphemy,” The Wall Street Journal, October 29, 2018 A10.  Although no one has been convicted of violating the law in 80 years, stage is set to repeal law making it a crime to say something offensive to religious sensibilities.

Looking at this from a Governance perspective, can you have an effective control that is not sufficiently clear as to when someone has violated it?  Do your policies and procedures set up controls that are sufficiently clear?  And if the voters can amend the constitution on a 65% vote, who is in charge?  As culture changes, do your controls keep pace?

And if you never enforce a control, does that mean it’s working?

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Filed under Compliance (General), Controls, Culture, Governance, Internal controls, Policy, Third parties, Who is in charge?

What’s worse than a tweet?

“FBI Probes Tesla Over Production Figures,” The Wall Street Journal, October 27, 2018 A1.  FBI conducts a criminal investigation into whether Tesla knowingly overstated anticipated production figures and thereby misled investors.

What if Tesla knew at the time that it couldn’t and wouldn’t meet the production targets it was then continuously providing the market?  When does mere puffery become criminal?  What controls would you need to have to prevent this at your company?

Do you have them?  Are they enforced?

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Filed under Accuracy, Collect, Communicate, Communications, Compliance, Compliance, Compliance (General), Controls, Corporation, Culture, Data quality, Duty, Duty of Care, Governance, Internal controls, Investor relations, Management, Oversight, To report