Faced with a global crackdown on corruption, more companies are adopting zero-tolerance policies for bribery. They are working to eliminate even the smallest payments to officials, including grease payments to move goods across the border or through customs. Small payments, when repeated, can add up to large-scale bribery. “That’s where companies constantly get themselves in trouble,” says Joseph Spinelli, a managing director at Navigant Consulting.
A new standard from the Financial Accounting Standards Board will make it harder for companies on the brink of failure to put on a happy face to investors. It directs management to determine during every reporting period whether any conditions raise “substantial doubt” about the company’s ability to continue as a going concern in the coming year. Auditors, who have traditionally had the responsibility, are applauding the new rules. More inside.
Many companies have already found that the added scrutiny the SEC’s conflict minerals rule requires has helped them to better assess other supply-chain risks. The next step is pairing conflict minerals with other imperatives, including sanctions compliance. Even among those not intentionally leveraging conflict minerals programs for these purposes, “when they turn over stones they are often finding creepy crawlies,” says Bruce Calder, vice president of consulting services at Claigan Environmental.
The Department of Justice has indicted FedEx on accusations of illegally distributing drugs for crooked Internet pharmacies, and it has accused the shipping company of money laundering. The case raises the question about the responsibility of companies to investigate suspected illegal activity by their customers and could open a new front for the government in its crackdown on money laundering. Full details inside.
A subpar compliance training program could uncoil several risks on a company: damaged corporate reputation, expensive investigations, and protracted litigation, not to mention the ire of regulatory agencies. With the proliferation of third-party training offerings, companies need to spend more time and effort ensuring that the training program they select isn’t a lemon. “You need to manage the content, make updates, and ensure it properly reflects the organization,” Ingrid Fredeen, vice president of advisory services at NAVEX Global, says.
A Sept. 23 deadline is fast approaching for healthcare companies to ensure that outside vendors they use are doing enough to protect sensitive patient data. By that date health providers must have completed “business associate agreements” with all third parties that spell out exactly how those vendors will work to protect data. The agreements come with new liability for third parties and new limitations on how those contractors can use patient data. More inside.
The last six years have been a tumultuous time for the Securities and Exchange Commission. The agency suffered blistering criticism for failing to police the conduct that led to the financial crisis in 2008, particularly the Madoff Ponzi scheme. Since then, several regulators have worked to reform enforcement at the SEC and rebuild its reputation. Inside, columnist Bruce Carton looks back at the ups and downs at the SEC during this time.