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e-Book: Getting a Grip on Third-Party Entity Risk
Most global companies conduct business with thousands of suppliers, resellers, distributors, joint-venture partners, and other third-parties. These business partners create risks, and those risks keep expanding. In this e-Book, produced by Compliance Week in cooperation with NAVEX Global, we look at how companies are assessing third-party risks and adopting strategies to address them. Click here to download.
French power and transportation giant Alstom SA agreed Monday to pay $772 million to settle criminal violations of the Foreign Corrupt Practices Act, setting a record for largest FCPA settlement ever. Deputy Attorney General James Cole called Alstom’s misconduct "astounding in its breadth, its brazenness and its worldwide consequences," involving bribes to government officials around the world. Alstom’s U.S. subsidiaries will work under deferred-prosecution agreements.
The SEC is urging companies to tighten accounting procedures around the statement of cash flows, amid a steady rise in restatements associated with it. Speaking at the national AICPA conference earlier this month, SEC staffer Kirk Crews said the majority of errors were “due to relatively less complex applications” of accounting rules; his warning was only the latest regulatory pronouncement on cash flows. More inside.
The lessons from Sony’s surrender to North Korean hackers last week are too many to count right now, so let’s start with an immediate one: understand the risks your company creates with its communication habits, and enforce smarter business practices to change them. Easy enough to say, Compliance Week editor Matt Kelly writes. As always, forcing cultural change like that is much harder. More of his thoughts inside.
Now that everyone has closed their Excel files on the first year of conflict minerals compliance, companies are pushing toward greater automation in Year 2. Reducing lines of data about smelters in your supply chain is one step, improving data integrity another. “Technology can help you understand the supply chain, but you still need to connect the dots and make sure you are not missing something,” says Kirsten Wallerstedt, regulatory analyst at 3E Co. More inside.
The appellate court decision to overturn insider-trading convictions of two Wall Streeters brings clarity to some aspects of the crime. It does not, however, reduce insider-trading risks. Yes, the ruling narrows the scope of such offenses, but “a compliance officer would have to be out of his mind to tell the organization that there has been a lightening of standards regarding liability,” says Richard Spinogatti of the law firm Proskauer Rose.
What the SEC giveth, the courts may taketh away—a point made clear lately by two conflicting messages for companies seeking to keep shareholder proposals off the proxy statement. At the SEC, a victory for Whole Foods suggests the agency might be more business-friendly in granting no-action letters this coming proxy season. At federal court, a ruling against Walmart may give unhappy shareholders recourse against such letters. Our look at how to navigate the process is inside.
British Banks are bracing for “incredible pressure” in 2015 as they implement new rules to make senior executives personally accountable to regulators. Compliance functions will help lead the creation of the new Senior Managers Regime, complete with certification overload. “Regulators will expect compliance in the spirit of the regulations, but also to the letter of all applicable laws and regulations. That’s a no-win situation,” says David Wilford of Lombard Risk. More inside.
Good disclosure begins with good standards. That has been challenging enough for financial reporting, and now investors want even more disclosure about important non-financial information. This week, Compliance Week columnist Robert Herz talks about the Sustainability Accounting Standards Board (disclosure: he sits on SASB’s board), its effort to develop disclosure standards, and how they can be used to complement financial data and satisfy investors.