by Micheal Delamere | May 22, 2014 | Crime
Forget everything you think you know about crime. In the next 20 years, “traditional” crime as we know it today will be largely replaced by cyber-crime. In fact, this is already happening. Take bank robberies: According to the American Bankers Association, bank robberies are being steadily replaced by ATM-skimming and other ‘cyber-heists.’ FBI statistics show bank robberies are down 60% since their peak in 1991, and they plummeted another 23% just between 2011 and 2012. Other crimes are also following suit. Car thieves around the country are now using ‘mysterious gadgets’ to remotely unlock car doors without having to jimmy the lock or smash the window. Burglars have been robbing hotel rooms using a keyless door hacking tool that was first revealed at the Black Hat hacking conference. It’s time for people to stop thinking of cyber-crime as something that only happens on a computer. With the rise of ‘smart’ devices and the Internet of Things (IoT), the maturation of the online black market as a multi-billion dollar industry and the widespread commercial and recreational markets for do-it-yourself hacking tools, cyber attacks will become far more invasive, dangerous and even physical.
by Micheal Delamere | May 12, 2014 | Security for Employees, Surveillance & Security
Of the various and sundry perks commonly afforded executives, none seems to draw the ire of some, or appear any more ostentatious to others, than the executive driver. We need only look back to 2009 when former U.S. Senator Tom Daschle was forced to withdraw his name from consideration for the cabinet-level post of Secretary of Health and Human Services to find an example of this. Forced to withdraw from the process when it came to light that he had failed to properly report taxable income, the alleged oversight was viewed by many as particularly egregious once it became clear that the lion’s share of the unpaid taxes was related to a car and driver provided by a private equity fund that he was acting as a consultant to. Failing to pay taxes on such a luxurious perk was simply too large a hurdle for the former Senator to overcome.
While the executive driver may be a symbol of corporate excess to some, from a business perspective it may be more practical than most other forms of non-wage compensation. In fact, when viewed through the lens of corporate governance, providing an appropriately trained executive driver may just be elevated from something that is an attractive perk to a prerequisite for decreasing risk, increasing efficiency, fulfilling fiduciary responsibilities, and addressing the duty of care issues.
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by Micheal Delamere | May 12, 2014 | Data Breaches
Consumers rank data breaches and poor customer service high in their effects on brand perception.
Data breaches can have as much impact as poor customer service in their effects on brand reputation, according to a study published Wednesday.
The new survey, “The Aftermath of a Mega Data Breach: Consumer Sentiment,” was conducted by the Ponemon Institute and sponsored by Experian’s Data Breach Resolution unit. It asked more than 700 consumers about their attitudes toward a company’s brand, and their willingness to buy in the wake of specific events.
According to the study, the three occurrences that have the greatest impact on brand reputation are data breaches, poor customer service, and environmental disasters. These incidents were selected ahead of publicized lawsuits, government fines, and labor or union disputes.
Breaches also have a major impact on customer fears about identity theft, the survey says. Prior to having their personal information lost or stolen, 24 percent of respondents said they were extremely or very concerned about becoming a victim of identity theft. Following the data breach, this concern increased to 45 percent, Ponemon says. Almost half of the respondents feel their identity is at risk for years or forever.
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by Micheal Delamere | Apr 20, 2014 | Foreign Bribery
WASHINGTON (Reuters) – U.S. government agencies that have been probing banks’ hiring of children of powerful Chinese officials are expanding existing investigations in other industries across Asia to include hiring practices, four people familiar with the matter said.
The Justice Department and the Securities and Exchange Commission have been asking global companies in a range of industries including oil and gas, telecommunications, and consumer products for information about their hiring practices to determine if they could amount to bribery, these people said.
On Wednesday, mobile chipmaker Qualcomm Inc said it could face civil action from U.S. authorities over alleged bribery of officials associated with state-owned companies in China. It also said it found instances in which “special hiring consideration” was given to people associated with state-owned companies or agencies in China.
Qualcomm declined to comment on Friday. The Justice Department and SEC declined to comment on whether they have expanded their probes.
Some of the new inquiries have zeroed in on hires in China, South Korea and southeast Asia, including Singapore, two of the people familiar with the probes said.
It was not clear how many companies were involved in the expanded probes and the people, who declined to be named because details of the investigations are not public, did not name specific firms.
Hiring issues have become a focus in bribery probes as a matter of course, sources said. That reflects a change in the wake of the investigation into whether JPMorgan hired children of China’s state-owned company executives with the express purpose of winning underwriting and other business, they added.
If employees were hired at the direction of an official at a state-run company who was in a position to grant a U.S.-linked company business, the American firm could run afoul of the Foreign Corrupt Practices Act (FCPA), a 1970s law that bars bribes to officials of foreign governments, for instance.
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by Micheal Delamere | Apr 13, 2014 | Risk Management
Islamic banks face a greater number of risks compared to conventional banks. These additional risks arise for various reasons, including the specific nature of financing contracts and legal requirements to ensure compliance with Shariah principles.
In order to manage and mitigate these greater risks, an Islamic bank needs to allocate more resources than what a conventional bank would need to do for the same purpose.
A recent study of risk management practices of Islamic banks in Pakistan, undertaken by the authors, reveals that the strength of risk management practices has a negative relationship with profitability. The study examined the risk management practices of all five full fledged Islamic banks operating in the country.
However, it is thought that while Islamic banks would need a relatively higher commitment of resources for their risk management function and thereby adversely affect profitability, it is crucial for their sustenance in the long run.
Islamic banks need to arm themselves with management skills and operational systems to cope with this environment in the face of rapid growth. A weak risk culture has been identified as a hindrance to sustainable growth of Islamic banks by EY World Competitiveness Report 2013.
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by Micheal Delamere | Apr 10, 2014 | News
NEW YORK and WASHINGTON, April 22, 2014 (GLOBE NEWSWIRE) — Corruption concerns are increasingly impacting companies’ decisions about forming or expanding partner relationships and conducting business in emerging markets, according to this year’s Dow Jones State of Anti-Corruption Compliance Survey.
The results of the fifth annual survey will be launched today at Dow Jones’ Global Compliance Symposium being held in Washington, DC. This year’s survey interviewed compliance professionals from more than 380 companies worldwide.
Of the companies represented, 67% stopped or delayed working with a business partner due to concerns about violating anti-corruption regulations. More than 50% of respondents said they had stopped or delayed a venture into emerging markets for the same reason. These trends have remained steady over the past three years.
“With fines by the SEC related to the Foreign Corrupt Practices Act exceeding $1.5B since 2010, Anti-Bribery and Corruption legislation is front of mind for global corporations. This is our 5th year publishing the Anti-Corruption Compliance Survey,” said Joel Lange, managing director of Risk & Compliance, Dow Jones & Company. “The results deliver interesting insights into the challenges global corporations face seeking to toe the line between effectiveness and efficiency of their compliance programs.”
by Micheal Delamere | Mar 25, 2014 | Surveillance & Security
Companies have been slashing almost every cost imaginable to survive the recession, yet they are spending more than ever to calm CEOs who fear for their personal safety.
Starbucks, which has laid off workers, closed stores and switched from whole to 2% milk to save pennies a gallon, bumped its spending to $511,079 last year on the personal and home security of CEO Howard Schultz. FedEx, which quit matching employee 401(k) contributions, spent $595,875 on the security of CEO Fred Smith. Walt Disney spent $645,368 for CEO Robert Iger; Occidental Petroleum spent $575,407 for Ray Irani; and McKesson spent $401,706 for John Hammergren.
Be it paranoia or prudence, corporate spending on CEO safekeeping is escalating in the face of painful cutbacks, and not by a little. The median spending on personal and home security for CEOs at the 100 largest publicly traded companies was $65,348 in 2008, up 123% from $29,291 in 2007, according to executive compensation research firm Equilar. Ten companies alone spent a total of $4.6 million on CEO security in 2008, 40% more than the 10 biggest spenders of 2007.
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