Category Archives: Reputation Risk

Игроки всегда ценят удобный и стабильный доступ к играм. Для этого идеально подходит зеркало Вавады, которое позволяет обходить любые ограничения, обеспечивая доступ ко всем бонусам и слотам.

Corporate Malfeasance From Enron to Lehman

Posted on by

The world has seen its share of bad business ethics ever since citizens began offering goods or services for a stipend. The effects of such wrongdoings have been magnified, however, as businesses have prospered and the greed of some has grown. Greed which can sometimes drive people to forget their morals. Some may think of Lehman Brothers as the the worst case of corporate malfeasance to ever rock the business world, while others may claim it was Enron.

One website has published what it claims are the “10 Great Moments in Corporate Malfeasance.” I’m not so sure the word “great” aptly describes these 10 moments. I would guess “worst” or “reputation-ruining” would be more appropriate. Nevertheless, after introducing the piece with the Enron scandal, the site says “what follows are 10 more examples of what a person might do if given the chance to make more money.”

It lists pharmaceutical maker Roche (#10) as refusing to sell its HIV drug Fuzeon at $18,000 (what it was valued at by South Korean health officials) as opposed to $25,000. Even though the drug maker would still make a hefty profit, it refused to sell at the discounted price with the head of Roche’s Korean division claiming, “We are not in the business to save lives, but to make money. Saving lives is not our business.” That’s one people won’t soon forget.

WellPoint (#7) didn’t fair so well in the spotlight after the U.S. health care debate raged this year. It was found that the insurance company was severely abusing recission (the policy of finding ways to cancel insurance contracts). Whose contracts were they canceling?

Women who were diagnosed with breast cancer.

WellPoint was using a computer algorithm that automatically targeted them and every other policyholder recently diagnosed with breast cancer. The software triggered an immediate fraud investigation, as the company searched for some pretext to drop their policies, according to government regulators and investigators. Once the women were singled out, they say, the insurer then canceled their policies based on either erroneous or flimsy information. WellPoint declined to comment on the women’s specific cases without a signed waiver from them, citing privacy laws.

Getting to what most people think of when they think “corporate malfeasance,” the list mentions Goldman Sachs (#5) and its “doomed-to-fail” fund.

Investment banking house Goldman Sachs created Abacus 2007-ACI, a fund of mortgages it sold to investors. What Goldman didn’t tell Abacus fund investors was that the mortgages they were betting would succeed had been handpicked by a favorite Goldman investor to actually lose.

That investor was John Paulson, who eventually made $1 billion from the fund.

IBM (#1) and its tech support garnered the unattractive top spot on the list. The tech giant sold some of its earliest model computers to Nazi Germany, with its founder, Thomas Watson, receiving the highest honor the country could bestow upon non-Germans, the Grand Cross of the German Eagle.

IBM admits that the company’s computers were used to carry out the logistics of the Holocaust, but denies awareness of this use at the time.

Thankfully, there are organizations in place that act as watchdogs for major corporations. CorpWatch is a nonprofit that works to expose corporate malfeasance and “advocate for multinational corporate accountability and transparency.” And probably more well-known is Corporate Accountability International, an organization that has fought against abusive corporations for more than 30 years. They have an impressive track record; from the infant formula campaign of the late 70s and early 80s to the nuclear weaponmaker’s campaign that spanned a decade, they work to bring to light wrongdoings of big businesses. Something Lehman and Enron could have used.

We are a capitalist society, which is only wrong when greed comes before humanity.

Child Labor: A Reputation Armageddon

Posted on by

For the most part, a company never anticipates its suppliers will be using child labor to provide a product, but for many large corporations with production facilities or suppliers in poorer countries, that is exactly what is, and has been, happening. And the reputation damage inflicted by accusations that a company uses child labor to make a profit, even if unaware, is devastating.

You may remember back in 2007 when Gap came under fire for, apparently unknowingly, using child labor in the production of a line of children’s clothing in India. An investigative reporter videotaped the scene at the factory.

It shows children who appeared to be between the ages of 10 and 13, stitching embroidered shirts in a crowded, dimly lit work-room. The video clearly shows a Gap label on the back of each garment. The reporter, Dan McDougall, said the children were working without pay as virtual slaves in filthy conditions, with a single, backed-up latrine and bowls of rice covered with flies. They slept on the roof, he said.

Though Gap immediately ordered a full evaluation and had a clean record of ethical out-sourcing up until that point, the reputation damage was severe and lingers to this day.

But Gap is not the only company accused of using child labor. In 1998 Nike agreed to root out underage workers and require overseas suppliers to meet strict Unites States health and safety standards after it received heavy pressure from critics.

Nike said it would raise the minimum age for hiring new workers at shoe factories to 18 and the minimum for new workers at other plants to 16, in countries where it is common for 14-year-olds to hold such jobs. It will not require the dismissal of underage workers already in place.

Though the shoe and apparel giant took some steps to ease the concerns of critics, the company suffered boycotts by consumers who refused to support such “sweatshops.” Examples include this boycott petition and this website encouraging the end of support for anything Nike.

More recently, Apple “said it found more than a dozen serious violations of labor laws at its suppliers.” One investigation found that three overseas facilities had hired 11 workers who were 15 years old (the minimum employment age is 16 in those countries). Apple’s reputation damage continued to worsen this year with news of an alarming rate of suicides at its biggest supplier, China’s Foxconn (check out an in-depth article on the topic).

China, India, Bangladesh, Nigeria and Pakistan are among the countries with the most widespread abuses of child workers, according to a report released today by Maplecroft. Below is a map illustrating the ares most prone to use of child labor.

Screen shot 2010-12-01 at 11.24.01 AMAs the report states, there are more than 200 million children working throughout the world, many full-time. Of these, 126 million are exposed to hazardous forms of child labor. As we have seen, many big-name companies have been accused of using child labor, and though they’ve taken many steps to correct their ethical violations, the reputation damage still lingers — and may do so forever.

WikiLeaks’ Next Target? Your Company

Posted on by

By now, I’m sure you’re familiar with WikiLeaks. (If not, read this good, introductory summary.) The whistle-blower company has released hundreds of thousands of documents about the wars in Afghanistan and Iraq and, just this week, it made headlines worldwide by unveiling a new torrent of documents related to U.

buy hydroxychloroquine online metabolicleader.com/p7pmm/img/jpg/hydroxychloroquine.html no prescription pharmacy

S. foreign policy and diplomacy. (Here are the Daily Beast’s “9 Most Shocking WikiLeaks Secrets.”)

Predictably, the company and its founder Julian Assange are not very popular among federal and military officials in Washington, D.C., many of whom see the release of such confidential documents as paramount to a criminal act of espionage against the United States.

Amidst the political firestorm, Assange has said that WikiLeaks’s next target will not be political or military — but corporate.

In a rare interview, Assange tells Forbes that the release of Pentagon and State Department documents are just the beginning.

buy cymbalta online metabolicleader.com/p7pmm/img/jpg/cymbalta.html no prescription pharmacy

His next target: big business.

Early next year, Julian Assange says, a major American bank will suddenly find itself turned inside out.

Tens of thousands of its internal documents will be exposed on Wikileaks.org with no polite requests for executives’ response or other forewarnings. The data dump will lay bare the finance firm’s secrets on the Web for every customer, every competitor, every regulator to examine and pass judgment on.

buy actos online metabolicleader.com/p7pmm/img/jpg/actos.html no prescription pharmacy

Risk managers are always looking for emerging risks. And being able to see the threats that lurk beyond the horizon can be what separates the good from the great. A few years ago, it would be hard for anyone to see this peril looming.

But here we are.

For companies, the threat may be even greater than that posed to the government and the military. Those institutions have time-tested procedures of secrecy and multiple levels of confidentiality to ensure everything remains on a need-to-know basis. Sensitive information is obviously getting released by people who think it should be in the public record, but we can probably be pretty sure that there is plenty of even more restricted information known in the halls of the White House, Pentagon and Congress that has not — and will never be — exposed to the masses

Businesses, too, have protections to keep the perhaps-incriminating or at-least-embarrassing details of their operations from seeing the light of day. But the proliferation of digital information — data that can be accessed by both employees and cyber-savvy outsiders — makes everything harder to protect. Most companies don’t have Apache helicopters and M-16-toting soldiers to protect their servers.

So all it would take is one whistle-blower with access to severely damage the reputation of the company — and perhaps imperil the freedom of its less-than-lawful execs.

For what it’s worth, Assange’s freedom is once again being threatened by those he has angered. Attempts to shut down the site in the past have almost all failed, however.

We’ll see if the latest hornet’s nest he has kicked will lead to any different results, but my guess is that the business risk of exposure at the hands of WikiLeaks — and the other imitators that will inevitably surface — will not be dissipating any time soon.

Nike Has Bedbugs — And Is Telling Everyone About It

Posted on by

The above video features an AP news report about how the Niketown store in chic SoHo New York has become infested with bedbugs. Just like a lot of other places in New York. But rather than try to duck the issue, the store let everyone exactly why it is closed, simply by posting a note on the door.

The note reads as follows: “Nike has proactively closed 21 Mercer because of a discovery of bedbugs at the store. Our primary concern is the well being of our consumers and sales associates. We are taking all proper steps to eradicate the problem and we expect the store to reopen shortly. We apologize for any inconvenience and for more information please call 1-888-224-6453.”

According to New York magazine’s Amy Odell, this openness stands in stark contrast to the way other retailers have handled the same issue.

Now this is the proper, good way to handle a bedbug attack on a retail establishment. Unlike Abercrombie and Hollister, who never used signage to inform shoppers of their bedbug problems, and just thrust the half-naked people back into the doorway as soon as they could as though to flaunt their bite-free flesh. Of course Nike’s sign still fails to answer the Big Questions here, such as where their bugs came from. If the vermin are holding court in a Nike warehouse somewhere, that would be a terrifying prospect.

Good on, Nike. But … hmmm … terrifying indeed.

I am actually currently in the market for a new pair of basketball sneakers, too. Maybe I’ll wait another month — just in case it was the source of bedbugs that Mars Blackmon was talking about when he told Michael Jordan that “it’s GOTTA be the shoes.”

NikeLogo