Gretchen Carlson – Harassment & Discrimination – Culture – A Task For The Board – And Internal Audit?

I have provided below a link to a short article about Gretchen Carlson, an interview that she is giving, possible legislative efforts, and sexual harassment and discrimination. We all know, or should know, that this is an important topic. Not only sexual harassment and discrimination, but harassment, discrimination, retaliation, bullying, and hostile environments, and not only male harassment and discrimination of females, but also female v. male, male v. male, female v. female, and including race, color, ancestry and national origin, religion and creed, age and elder, mental and physical disability, sex and gender, sexual orientation, gender identity, and more.

This is or should become an area of oversight for your board, and it also relates to the culture of the organization, and tone at the top, at the middle, and at the lower employee levels, including an environment that encourages people to report harassment and discrimination without fear of retribution, anonymously if the desired, with the knowledge that the reported conduct will be timely, fairly and fully investigated, and that appropriate action will be taken.

This really isn’t new stuff from legal and governance perspectives. Are your board, and the board’s committees, on top of this issue and the culture of the organization?

These can and often are difficult issues and situations.  Of course anyone accused is entitled to a defense, and to rebut the allegations. At law, in most situations, innocence is presumed. In recent past years there have also been stories involving allegations of harassment and discrimination reported in the news that turned out to be false or at least not sufficiently supported.

An investigation into situations involving these allegations often should be performed by outside legal counsel with a reputation for integrity and knowledge and experience in these practice areas.

But let me also suggest that the culture of the organization (but not an actual investigation of a specific situation) also could be an area for attention by internal audit, if the board or management puts it on internal audit’s agenda, and if internal audit is provided education and training about the critical elements, and investigation techniques, and help preparing an audit and reporting program. After all, internal audit also is looking to become more relevant in helping the organization to achieve its organizational objectives, goals and strategies.

The following is a link to one of the articles about Gretchen Carlson and what she is trying to do and accomplish: http://people.com/tv/gretchen-carlson-alleged-sexual-harassment-in-2020-interview/

 

New ISO Anti-Bribery Standard – Will It Give Companies An Absolute Defense?

ISO has published its new international anti-bribery standard, ISO 37001. You can find select information about the new standard HERE and at http://http://www.iso.org/iso/home/standards/management-standards/iso37001.htm .

The short PowerPoint presentation in part says:

The Standard benefits an organization by providing:

  • Minimum requirements and supporting guidance for implementing or benchmarking an anti-bribery management system
  • Assurance to management, investors, employees, customers, and other stakeholders that an organization is taking reasonable steps to prevent bribery
  • Evidence in the event of an investigation that an organization has taken reasonable steps to prevent bribery.

SO HERE’S AN INTERESTING QUESTION: will compliance with the standard give the company a free pass on bribery liability with the SEC and other state and federal entities and agencies if in fact a bribery occurs? I bet not. However, consider that generally liability does not result unless the person or entity charged has breached or failed to satisfy the applicable standard or duty of care (except in select situations, e.g., such as strict liability or products liability, etc.), and that breach or failure causes damages. Thus, if the applicable standard becomes ISO 37001, and if that standard is met or satisfied, it certainly is arguable that no fault or liability should result if a bribery occurs.

Best to you, Dave Tate, Esq., San Francisco and California. See also Tate’s Excellent Audit Committee Guide (updated October 2016), tates-excellent-audit-committee-guide-10202016-final-with-appendix-a

The Business Judgment Rule – a short animation (for fun, but also correct):

Audit Committee 5 Lines of Defense 07182016

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Updated Tate’s Excellent Audit Committee Guide – Attached – Use It – Pass It Along – Free

Below is a link to my updated Tate’s Excellent Audit Committee Guide (updated October 20, 2016). Please use it, and pass it to other people who would be interested, such as audit committee members, directors, officers, accountants, internal and external auditors, in-house counsel, compliance professionals, and other people.

I do note that as I was updating these materials, and going through the entire Guide, it definitely hit me that all of the specifically enacted statutes, regulations, rules and pronouncements definitely could cause an audit committee member to not be able to see the forest for the tress. So let’s also not forget to look at the situation as a whole.

Although the Guide is 186 pages, I do expect some significant updates soon, and perhaps prior to the end of 2016. Many of the updates will be posted to this blog first, and then to the Guide. I am looking forward to the COSO enterprise risk management (ERM) updated framework.

Best to you. Dave Tate, Esq., San Francisco and California.

Here is a link to the updated Tate’s Excellent Audit Committee Guide (updated October 20, 2016), tates-excellent-audit-committee-guide-10202016-final-with-appendix-a

Audit Committee 5 Lines of Defense 07182016

The business judgment rule – an animated video:

 

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Trade Secrets And How To Protect Them – Royse Law Firm Webinar – Very Important For Every Business

Below is a link to a detailed and very useful webinar from my friends at the Royse Law Firm discussing trade secrets and how to protect them – this is a very important topic for every business and entity. Click on the following link for the discussion:

Basic Insurance for Start-Up Companies – Priya Cherian Huskins, Esq., Woodruff Sawyer

Passing this along, Basic Insurance for Start-Up Companies, the following is a worthwhile read from the D&O Notebook, Priya Cherian Huskins, Esq., Woodruff Sawyer, click on the below link/box for the discussion, enjoy,

https://wsandco.com/do-notebook/startup-insurance/

Best, Dave Tate, Esq., San Francisco and California.

TATE’S EXCELLENT AUDIT COMMITTEE GUIDE updated January 2016, click on the following link, http://wp.me/p75iWX-q

Audit Committee 5 Lines of Defense 07182016

 

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Really Massive Changes in Accounting, Auditing, Reporting and Communicating – The End Of Accounting?

Although I practice as an attorney, I previously practiced as a CPA and I have experienced several times over the years when there were significant changes occurring in the accounting practice and profession. But right now, I believe that I am witnessing multiple massive changes that have been long in the making. The following is a link to an Accounting Today article which does a pretty good job of discussing some of the changes, and also includes a question whether this is the end of accounting – click on the following link, CLICK HERE

It’s not like these changes are screaming at you in the headlines, but the cumulative effect is significant, new changes are continuing and will continue, and perhaps more important, the reasons for the changes are permanent.

For a long, long time the value of the audit and of the audit report have been questioned.

For a long, long time, the value of the information provided by an accounting that is prepared in conformity with generally accepted accounting principles has been questioned.

Different stakeholders also have different needs, and speed at which the flow of information is needed and expected is ever-increasing. Audited financial statements, for example, don’t tell you very much about the future investment or business generating value of the entity or of the transactions reported, or of the risks that are associated.

So now, for example, in addition to GAAP accounting we have non-GAAP accounting and reporting, we are seeing an increased ability to audit all transactions by computer software, GAAP is moving from the more detailed and specific rules based approach back to the more principles based approach that was in place when I first became a CPA, and non-GAAP measurements or criteria are becoming or should become more important such as some of the governance criteria (integrity, tone-at-the-top, culture, etc.), sustainability, transparency, risk management, and more emphasis on internal controls such as COSO.

However, I don’t agree with the suggestion or question in the title to the above linked article – it’s not the end of accounting. Traditional accounting serves a useful purpose – can you imagine what a free for all it would be without traditional accounting? There would be absolutely no checks or balances. There would be a “zero” reliability factor, and no comparability between different entities or industries.

But there is no question that the changes that have occurred and that continue to occur in accounting and auditing create both opportunities and risks for investors, financial institutions and other stakeholders, executive, financial, accounting and audit officers and professionals, boards, and audit and risk committees. The people who will excel are the people who will embrace and become expert in these changes. It’s a lifetime of learning to stay ahead and relevant.

Best to you. Dave Tate, Esq.

The following is a link to my Tate’s Excellent Audit Committee Guide, updated January 2016, CLICK HERE