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Episode 26 — Federal Reserve Blocks Wells Fargo Growth In Response to Governance and Risk Management Disaster

In an unprecedented action, on February 2, 2018, the Federal Reserve restricted Wells Fargo’s ability to grow its business until it implements comprehensive improvements to its board governance and risk and compliance systems.  Citing Wells Fargo’s poor record of governance and risk management resulting in the community banking sales incentive scandal and continuing problems at the bank, the Federal Reserve imposed detailed governance and risk...

Planning for the Perilous Consequences of a Data Breach

The nightmare scenario for corporate boards and senior executives revolves around the impact of a major data breach. We have seen this first hand with Equifax, Anthem Healthcare, and Target, as prime examples.  In the Equifax case alone, it is estimated that approximately 140 million individuals had their information hacked in the attack.  It is easy to understand, in these circumstances, that a company can...

The Long Road Back to Redemption: Wells Fargo’s Path to Remediation (Part II of II)

Wells Fargo’s ability to grow its business is on hold for a year while it designs and implements a remediation program to address deficiencies in its board governance, risk management and compliance program.  The Federal Reserve’s action blocking Wells Fargo’s growth is perhaps the strongest condemnation of a company’s overall leadership and direction that the government can impose.  There is clearly a complete lack of...

Federal Reserve Hits Wells Fargo with Unprecedented Enforcement Action (Part I of II)

In an extraordinary action, with significant ramifications for the financial industry, the Federal Reserve recently announced a series of enforcement actions against Wells Fargo. On Friday, February 2, 2018, which was then-Chairwoman Yellen’s last day in office, the Federal Reserve announced an enforcement action against Wells Fargo for its corporate governance failures and poor record of remediation. (The Press Release and Enforcement Documents are Here)....

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Episode 25 — Unraveling the KPMG Audit Scandal

In January 2018, the Department of Justice and the Securities and Exchange Commission announced criminal and civil charges against five KPMG and a Public Company Accounting Oversight Board employee arising from sharing of confidential audit inspection information by PCAOB employees with KPMG audit partners.  A sixth defendant, a KPMG official and former PCAOB employee plead guilty and agreed to cooperate with the government investigation.  The...

Local Compliance Strategies to Embrace the Business (Part II of II)

The ultimate success of a global ethics and compliance program often depends on the ability of local compliance officers to engage business operations in a specific country.  Of course, a global compliance program’s performance depends on cooperation and coordination at all levels, but in many cases, the ability of a local compliance officer to adopt creative and intelligence strategies to engage the business will establish...

Challenges in Global Compliance Operations: Structure and Responsibilities (Part I of II)

Global companies face ever-increasing challenges when building and implementing global ethics and compliance programs.  From my vantage point, the set of challenges can be different depending on the industry.  Global regulated companies, such as pharmaceutical, medical device or financial institutions, face a different constellation of challenges than a global manufacturing company. Notwithstanding the risk and compliance differences among the specific industries, there are a number...

Webinar: Making Your Board of Directors a Partner in Compliance

Webinar:  Making Your Board of Directors a Partner in Compliance Tuesday, February 20, 2018, 12 Noon EST Sign Up HERE Corporate boards set the tone for a company’s compliance program. Directors are responsible for overseeing and monitoring the company’s compliance program. Yet, corporate boards are not actively fulfilling their responsibilities. Chief compliance officers have to engage the company’s board, educate the board and secure a...

Resources, Resources, and More Resources – The True Test of an Effective Ethics and Compliance Program

An effective ethics and compliance program depends on the Chief Compliance Officer’s authority, independence, and resources.  A company’s commitment to a compliance program requires money and employees – there is no question that words of support, organizational status in the C-Suite and a robust board reporting relationship are all important.  However, all those elements are important but, in the end, those principles mean relatively little...