The top ten customers totalling some 40% of the revenue did not have a contract, neither any basic terms and conditions and the prices in the system were input based on what the SVP sales said….troubled waters, fisherman’s gain.
Some people believe that shareholders do not care what happens internally in the company provided they get benefits. Volkswagen shareholders are not thinking the same. The share price fell 46% at the onset of the scandal and nearly a year later has only recovered a 20%
Once the contracts were in place…..Prices were updated in the system so invoices were accurate and there were no delays in their payment. This boosted the cash flow and ultimately benefited shareholders. Operations could plan in advance the service and quality levels required for these customers, so they were able to respond efficiently. This meant no more extra hours, no more bottlenecks or emergencies in operations. This ultimately benefited shareholders.
There are still some people that believe there is nothing wrong with no having any contracts in place. Maybe because they are the only fishermen?
they are going to send all the money to one of the PA’s personal bank account, for her to take the money in cash from her bank account and bring it to the office to put it in the red envelopes.
We are giving one employee an additional full bonus, and then we expect that this person will take all that money in cash to do what? I do not think this is something so small, it sounds so dodgy that it can be perceived as something illegal, even if this money is fully used on the red envelopes, Caesar’s wife principle should apply.an email should be sent by the CEO, informing all employees, that they will get a red envelope the following day.
With all this, we have evidence of the payment approved by the CEO, the money been retrieved from the company bank by a person with legal powers to do so in presence of HR and another email informing the employees about the red envelope
The lesson from this real example is that, even a good gesture can be completely undermined and bring a company into trouble, if the way of doing it looks suspicious and dodgy. Since the recent bribery and corruption scandals (e.g.: GSK China, FIFA, etc) companies should pay more attention to cash payments. Doing the right thing in the right way it may take some effort. In this real experience this involved drafting official emails, the Finance Director appointment with the company bank, etc. This effort should be compared to the effort deployed explaining cash payments without much evidence on top of any reputational impact (regardless of whether the cash payment was for valid reasons or not).
how it would look like if it was to appear in a global newspaper and you had to provide an explanation to the media. I am still trying to find ways to explain the sizeable payment to the PA’s personal bank account for her to retrieve the money in cash….
It is critical that the set of activities decided to execute the strategy take the company in a consistent direction.I agree that when the senior executives have stretched profit targets compatibility problems appear in areas involving costs (e.g.: maintenance). If the company is one whose assets are key to deliver the activity (e.g.: airlines, car rental, lifts rental…) there will clearly be a compatibility problem between the senior executives targets on profits and the company’s activity via its assets. By establishing short-term performance measures that are not linked to value creation (increasing profits does not necessarily means creating value) the ground for compatibility problems is set.senior executives focus on short-term measures to get their bonuses. Complacency and lack of ethics are at the very bottom of many scandals and compatibility problems. I hope that Mrs May words (“get tough on irresponsible behaviour in big business” do end up in clear actions.
Despite their incompetence, their six-seven figures salaries keep on growing.
I do no think an incompetent senior executive is kept on the role in a simplistic way. The senior executive is kept in his/her role because he/she is of some interest to the company. His/her incompetence may not be the reason why….so? what is it? I have seen cases where the senior executive was covering up a company’s wrongdoing.
Many corporate scandals have been unveiled by whistleblowers
Many of them suffered retaliation. Few of them were properly rewarded…..a smear campaign against the whistleblower starts as soon as the whistleblower uncovers any wrongdoing
Société Générale was ordered to pay unfair dismissal award to his former employee, Jérôme Kerviel, who caused the French bank significant losses in trading.
The Tribunal agreed with Mr. Kerviel’s argument that his risky trades were accepted, tolerated and even “tacitly” encouraged by his managers provided they were profitable.
Mr. Kerviel was not alone on this, so all the additional parties involved (i.e.: his line managers, the internal auditors and compliance department) should be brought in front of Justice and compensate the bank and its shareholders.
Regulators are also benefited, as this judgment opens the scope of the fraud and corruption cases, due to lack of controls or control weaknesses, to senior management, in particular when the lack of controls has been due to a corporate decision.
Moreover, politicians should think twice who in the corporate world they deal with, as campaigning for good governance and dealing with senior executives linked directly or indirectly to fraud or corruption (or just conscious poor governance) may* be perceived as antagonistic.
Ten biggest banks scandals have costed £53bn in fines, FT 11 April 2016. Apparently Internal Audit and Compliance teams did not see any of the issues that caused the scandals, neither the financial crisis…Can you imagine the VW Internal Audit team being told that they had style of writing issues as soon as they raised the emissions problem? The way some companies reward an internal auditor or compliance person highlighting serious issues is by campaigning against, raising negative feedback against and putting him/her under huge stress.