Category Archives: Policy

Who exactly are your partners?

“U.S. Probes Microsoft on Bribery,” The Wall Street Journal, August 24, 2018 B1.  DOJ probes sales of software licenses to middlemen for ultimate sales to smaller governments.

Did the middlemen in, say, Hungary, share their discounted purchase price with government officials by way of bribes?  Even if they did, is Microsoft liable?  Unless the middlemen were Microsoft sales agents (who didn’t take title to the software licenses), or Microsoft knew of the scheme, hard to see FCPA liability for Microsoft.  Were the middlemen business partners of Microsoft, or just intermediate purchasers?

The ethics of the people with whom you do business can come back to bite you.  Your policies may apply by contract to consultants and third parties that you engage, but do they apply to the people to whom you sell/license your product?

 

 

 

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Filed under Compliance, Compliance (General), Controls, Corporation, Duty, Governance, Oversight, Policy, Third parties, Vendors

Shoot for the stars

Nailing a high-visibility target demonstrates that you’re serious about compliance.  Especially if he or she is a big money maker.  And especially if it is over violations of your company’s procedures.

“GAM Says Fund Manager Breached Policies on Gifts,” The Wall Street Journal, August 7, 2018 B10.  “[T]he star fund manager” also used his personal email to transact business for the company, and failed to follow other company procedures.

The company’s shares have dropped 44%.

Would you be surprised if your company did this?  What does that say about your culture?

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Filed under Compliance, Compliance (General), Controls, Corporation, Duty, Employees, Governance, Internal controls, Oversight, Policy

How much due process is due?

“CBS to Weigh CEO’s Fate,” The Wall Street Journal, July 30, 2018 A1.  Discussion over whether CEO accused of sexual harassment should stand down while the investigation continues.

Curious that Urban Meyer has to stand aside while an investigation into whether he should have reported domestic abuse by an assistant coach 9 years earlier at a different school, but Leslie Moonves remains on board as the CEO of CBS.  See https://infogovnuggets.com/2018/08/07/caesars-wife/

What does it say about a company’s culture when, in the current environment, the CEO can remain in his job during such an investigation?  How convinced are the rank-and-file employees that the sexual harassment policy is real, or just a piece of paper?  Are the directors serious about this policy?  What about other policies?

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Filed under Board, Compliance, Compliance, Compliance (General), Corporation, Culture, Culture, Directors, Duty, Employees, Governance, Oversight, Oversight, Policy

Churn ’em, Burn ’em, and Learn ’em

More of the same old stuff.

“Advisers Blew Whistle on Wells Fargo Wealth Unit,” The Wall Street Journal, July 28 2018 B1.  Sales incentives drive improper behavior at Wells Fargo.  Again.

The good news is that four Wells Fargo financial advisers tipped off the DOJ and the SEC to what was happening.  High-wealth investors were steered to investments that would result in higher fees paid to Wells Fargo.

So the culture wasn’t entirely corrupt.  There’s hope.

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Filed under Compliance, Compliance (General), Controls, Corporation, Culture, Duty, Employees, Governance, Internal controls, Investor relations, Policy, To report

Protecting key information

“Hacker Allegedly Tried to Sell Drone Data,” The Wall Street Journal, July 12, 2018 A3.  Hacker tries to sell maintenance documents for a drone, documents stolen from a Air Force officer’s computer.

How well does the government protect sensitive information?  Apparently, the hack exploited the failure to properly configure a router.

What happened to the Air Force officer, who apparently failed to adequately protect classified information?  The IT guy who configured the router?

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Filed under Access, Compliance, Compliance (General), Controls, Duty, Duty of Care, Governance, Government, Information, Internal controls, IT, Policy, Protect assets, Security

CEOs in the news

“Ex-CEO at Oil Driller Settles SEC Inquiry On Undisclosed Loans,” The Wall Street Journal, July 17, 2018.  CEO had taken more than $10 million in loans from vendors in return for awarding contracts.

He used the money to cover margin calls and to maintain an extravagant lifestyle.  Also caught up in the scandal was a former portfolio manager who got a seat on the company’s board.

CEOs get hammered, too, for conflicts and poor ethics.

 

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Filed under Compliance, Compliance (General), Controls, Corporation, Culture, Directors, Duty, Employees, Governance, Internal controls, Investor relations, Oversight, Policy, Third parties, Vendors

Loose lips volume II

“Chips CEO Resigns Over Conduct,” The Wall Street Journal, July 18, 2018 B1.  CEO of Texas Instruments fired/forced-to-resign after two months for violating company’s Code of Conduct.  Probably no package, either.  No details on the nature of the violation.

It’s nice when a company enforces its policies against the CEO.  Sends a message to the worker bees.

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