“Wells Fargo Fires A Top Official, The Wall Street Journal, November 18, 2017 B1. Head of commercial lending canned because he said bad things to a fellow employee about regulators (and how they were affecting golden parachute payments) .
Think about that. He didn’t write it down; he just said it. Not outside the company, even.
True, his firing may have been expedited by all the other legal issues Wells Fargo has been having. But he may not have gotten much of a parachute.
Information controls apply to unwritten information, too.
Filed under Communicate, Communications, Compliance, Controls, Culture, Definition, Duty, Employees, Governance, Information, Internal controls, Management
“A Hot Startup Misled Advertisers,” The Wall Street Journal, October 13, 2017 A1. Outcome Health apparently misled advertisers as to how many units their ads were appearing on. The investigation continues.
How would your employees react if ask to provide inflated numbers to potential customers? How would your investors react after a story appears on page one, above the fold? Probably reflects in the valuation of the company. And what about your company’s extensive political contacts?
Filed under Accuracy, Board, Communicate, Compliance, Compliance, Compliance, Compliance Verification, Controls, Corporation, Culture, Culture, Data quality, Directors, Duty, Duty of Care, Employees, Governance, Inform market, Inform shareholders, Information, Internal controls, Investor relations, Managers, Oversight, Oversight, Policy, Protect assets, Protect information assets, Use, Value
I normally cite to The Wall Street Journal. But occasionally I come across something elsewhere worthy of note. One of my sources is the Business Law Prof Blog. There was a post there today titled “Omissions Liability: Tempest in a Teapot or Gathering Storm?”
At issue, can there be Rule 10b-5 liability (dealing with securities fraud) for not saying something, when you had knowledge and something akin to a duty to disclose. There’s a Supreme Court case (Leidos, Inc. v. Indiana Public Retirement System) pending that may resolve the issue.
Is a corporation’s failure to say something in itself information, and if so, is that silence itself information that must be governed in order to be compliant? How do you manage/govern silence?
Filed under Board, Business Case, Collect, Communicate, Communications, Compliance, Compliance, Compliance, Controls, Corporation, Directors, Duty, Governance, Inform market, Inform shareholders, Investor relations, Management, Third parties, To report
If someone asks you to “alter” or “fudge” a financial metric reported to the market, take pause. Or hit the big red button.
“Witness: Magnate Knew of Altered Metric,” The Wall Street Journal, June 28, 2017 B9. The chairman of a large company allegedly knew that one of the financial metrics the company reported to the market for the previous quarter was improperly inflated. Or fudged, as they say in the trade. By $12 million.
The former chief accounting officer took a plea to fraud (and admitted to lying on other matters) and is cooperating with the government; the former CFO is charged with criminal fraud and is at trial. The company is “cooperating.” The chairman hasn’t been charged. Yet.
Why isn’t the company charged? At least one of its agents appears to have committed a fraud. Why isn’t the chairman charged, if he knew? Is this consistent with the Yates memo? Is there a civil (derivative) suit against the chairman?
Filed under Accuracy, Board, Collect, Communicate, Compliance, Compliance, Compliance, Controls, Corporation, Directors, Duty, Duty of Care, Employees, Governance, Inform market, Internal controls, Management, Oversight, Oversight
Soon to be signed into law is a bill holding school administrators, superintendents, and principals criminally liable for failing to report teachers who commit “inappropriate acts” with students. The offending teachers are already potentially liable.
“Texas Measure Targets Improper Teachers, The Wall Street Journal, May 22, 2017 A3.
Surprising it wasn’t the law already. Mr. Bumble was right: the law is a ass.
Filed under Communicate, Communications, Controls, Duty, Employees, Governance, Government, Internal controls, Management, Managers, Oversight, Supervision
Yes, the Oscars ceremony had its information mix-up, when Warren Beatty was given the wrong envelope. But who was (and “was” is probably the operative word) in charge of calculating and communicating the cost basis for stock?
“Morgan Stanley Gave Clients Wrong Data,” The Wall Street Journal, February 28, 2017 B9. Firm miscalculated the cost basis, and therefore the gain, on sales of stocks by the firm’s wealth-management clients for 5 years. Anticipated cost: $70 million.
How do you ensure that the right information is getting to the right place (person) at the right time? What controls do you have in place? Are those controls people, process, or technology? While it took PWC a few minutes to correct the error at the Oscars, it took Morgan Stanley five years. Who had the better process?
Filed under Accuracy, Collect, Communicate, Controls, Corporation, Duty, Duty of Care, Employees, Governance, Internal controls, Management, Managers, Oversight, Policy, Protect, Protect assets, Use
If you are serious about imposing a requirement, measure compliance with that requirement and publish the data.
“OPEC Data Show Compliance With Production Cuts,” The Wall Street Journal, February 14, 2017 B9. OPEC confirms 90% of its members are complying with agreement to curtail output.