During this management meeting we are going to exchange
ideas, reflect and learn from our experiences and mistakes from the recent
credit and financial crisis and move on to better things. As wise old Rafiki
in The Lion King said; 'The past can hurt. But the way I see it, you can
either run from it, or learn from it.'
Corporate governance issues have recently become a
highly discussed and controversial management component, both at the directors
and managerial level. In order for an individual company to develop its
own customized framework and roadmap, each business unit must understand
the political, structural and historical development in the organization.
There are always umpteen examples of the enormous
costs of companies behaving badly as far as bribery and corruption compliance
is concerned. Effective compliance, governance and ethics programs are a
means to reduce such costs. Another useful method fosters a culture in enterprises
where unethical behavior is either prevented, excluded, detected and resolved
promptly. Businesses can also provide encouragement thru a proper mix of
incentives. Carrot and stick philosophy is inadequate.
Fatca requires U.S. financial institutions to impose
a 30 percent withholding tax on payments made to foreign banks if the bank
does not agree to identify and provide information on U.S. account holders
to the SEC.
Over the past year, boards of directors continued
to face increasing scrutiny from shareholders and regulators, and the consequences
of failures became more serious in terms of regulatory enforcement, shareholder
litigation and market reaction. We expect these trends to continue in 2014,
and proactive board oversight and involvement will remain crucial in this
The more employees know on what they must do, the
more likely it is that they will to do it. The essential components and
knowledge of good and bad behavior of all employees within the organization
is dependent on clarity, certification, checking and consequences. Directors
and managers must, therefore, predict and influence with policies, processes
When Sarbanes-Oxley (SOX) implementation was at its
height, our consultants were in and out of boardrooms and executive meetings
and talked about The Tone-at-The-Top. When the tone went a bit musty we
introduced the concept of Talk-the walk that was swapped by one-size-does-not-fit-all.
No matter the superficial jargon the various paradigm changes, and compliance
convergence the concept of Tone-at-the Top has survived and revitalized,
probably due to the added responsibilities and liabilities of the board
of directors and management.
Bank of America will pay $16.65 billion to settle
fraud claims by federal and state enforcement agencies and regulators that
relate back to the financial crisis of 2008. It is "the largest civil settlement
with a single entity in American history," The agreement is indeed historical
and goes far beyond the cost of doing business.
Current enforcement activities by the UK's Serious
Fraud Office (SFO) and FCPA are signaling a new era of relentless investigation
and prosecution of corrupt practices. The cases involve investigations for
individuals and companies such as GlaxoSmithKline, Alstom UK, Airbus Group
NV, Sweett Group and others. In this article, we review the recent bribery
and corruption cases brought against Scandinavian companies.