“Boeing Withheld Data On Potential Hazards,” The Wall Street Journal, November 13, 2018 A1. Did Boeing fail to disclose potential problems with its new flight-control feature? Was that a factor in the Lion Air crash in Indonesia, killing 189 people?
Maybe this feature didn’t factor into the crash; we’ll have to wait for the cockpit voice recorder and the flight data recorder. But if you know something and don’t tell other people who would like to know — well, that’s bad. Even if you didn’t want to confuse them by providing them too much information. Was it better “marketing” to tell their customers that they wouldn’t need as much training?
How do you decide how much information to provide your customers? Are there problems you don’t mention? Why?
Filed under Access, Accuracy, Communicate, Communications, Controls, Corporation, Data quality, Duty, Duty of Care, Governance, Information, Internal controls, Management, Risk assessment, Third parties
“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?
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
“Ex-Salix Official to Pay Fine,” The Wall Street Journal, September 29, 2018 B10. A company’s CFO understated the company’s inventories held by wholesalers; fined $1 million.
“Under-reporting,” also known in lay circles as lying, is generally not a good thing, especially for a CFO. See also, “Lender’s Unit Resolves SEC Case,”The Wall Street Journal, September 29, 2018 B10.
Filed under Accuracy, Communicate, Communications, Compliance, Compliance (General), Controls, Duty, Employees, Governance, Internal controls, Third parties
“SEC Sues to Oust Musk From Tesla Over Tweets,” The Wall Street Journal, September 28, 2018 A1. The SEC sued to remove Elon Musk as the CEO of Tesla, after Mr. Musk tweeted about funding for taking the company private. See also https://infogovnuggets.com/2018/08/11/loose-lips-revisited/.
So, if the CEO doesn’t follow the rules, how much do the shareholders get hurt? Ten percent (or $5 billion). What’s Compliance worth to them?
Take that and smoke it.
“Probes, Cyberattack Distract Atlanta as It Pitches Amazon,” The Wall Street Journal, May 29, 2018 A3. Investigations of former mayor and the aftermath of a ransomware attack hamper efforts to entice Amazon to the city.
Corporations should conduct structured risk assessments. Do cities?
One assumes Atlanta has done a risk assessment and identified the risk of official misconduct. Did it also capture the risk of a cyberattack? Did the risk assessment suggest that if these risks occurred, Atlanta would lose the chance of phenomenal growth?
Filed under Business Continuity, Communicate, Compliance, Compliance, Controls, Duty, Duty of Care, Governance, Government, Internal controls, IT, Management, Operations, Oversight, Protect assets, Risk assessment, Security, Third parties
“Hundreds of Cryptocurrencies Show Hallmarks of Fraud,” The Wall Street Journal, May 18, 2018 A1. Plagiarism, promises of future returns, and fake executives found in offering materials for cryptocurrency companies.
What can investors expect if they invest in these companies?
“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