Running head: CORPORATE COMPLIANCE PLAN – RIORDANCorporate Compliance Plan – Riordan
University of PhoenixCorporate Compliance Plan ??“ Riordan MEMORANDUM
To: Corporate Officers, Directors
From: Dr. Michael Riordan
Cc: Lowell Bradford
Re: Corporate Compliance Officer Since its conception Riordan has taken all the necessary precautions to ensure that our organization complies with all legal matters as it concerns to our organization. As our business requirements change it is imperative that our organization remains focused and ensures that all departments are in compliant within the laws that govern our business. At the suggestion of our corporation??™s legal counsel Litteral & Finkel, we will be establishing a new position Corporate Compliance Officer (CCO) to our team who will report directly to Lowell Bradford, Chief Legal Counsel (CLC).
Good corporate governance practices lead to better compliance, but more importantly these behaviors lead to better organizational operation and increased shareholder and stakeholder confidence because of the increased visibility and monitoring that is put in place. Corporate governance is a term that embodies all of the process, policies, procedures and records that an organization uses to make decisions and carry those decisions out.(yahoo groups, 2009, p. 1). The CCO will work directly with the Litteral & Finkel to establish a Corporate Compliance Plan that will address key legal liability areas using the following as a guideline.Alternative Dispute Resolution
Alternative dispute resolution (ADR) offers parties alternative means of resolving their differences outside actual courtroom litigation and the costly aspects of preparation for it. ADR ranges from very informal options, such as a negotiated settlement between the CEOs of companies, to the formal, written processes of the American Arbitration Association. These processes may be used along with litigation or in lieu of litigation. (Jennings, 2006, p. 111)
In the event that a dispute should arise either internally or externally Riordan will rely on the recommendations of the Litteral & Finkel to determine what will be the most beneficial and cost effective approach when determining the method of ADR that will be applied. The types Riordan will utilize with a brief description will be as follows.
??? Arbitration, hearing with relaxed rules of evidence.
??? Mediation, third party acts as go-between. We will utilize the American Arbitration Association.
??? Medarb, combination of mediation and arbitration.
??? Minitrial, private judge and courtroom.
??? Peer Review, will only be used to resolve employee/employer issues when applicable.Enterprise Liability
Our business management style has adopted the Six Sigma model which seeks to improve the quality of process outputs by identifying and removing the causes of defects and variation in manufacturing and business processes. Our goal is to exceed ISO 9000 standards, maintaining rigorous quality controls and innovative solutions. It is critical that each corporate officer and director at Riordan fully understand the principle-agent relationship that we all abide by. Part of our newly established corporate compliance plan will include mandatory training for all officers and directors to reinforce the definitions as to each persons authority as it relates to making decisions on behalf of the organization. In addition training you will also receive information to review on tort laws as it relates to employees, OSHA standards, product liability and international laws in order to help prevent and limit enterprise liability. Specifically for officers and directors we will be adding a section to our employee handbook, definitions of authority each level of officer and directors have on behalf of Riordan. The following will be defined in detail:
Expressed authority, Implied authority, Apparent authority, Lingering apparent authority, Actual notice, Constructive notice, Ratification, Disclosed principle, Undisclosed principle, Master-servant relationships, Independent contractor relationships, Scope of employment, Inherently dangerous activities, Duties and obligations for both employers and employees, Employment at will, Expressed contracts, Implied contracts, public policy and whistle blower policies. (Jennings, 2006, p. 737)Product Liability
The financial strength of our business and our ethical and moral obligations relies on our abilities to ensure our products are safe and that we use every precaution in the manufacturing, delivery and disposal of harmful waste to keep our customers, employees and our environment safe. We will continue to make sure we exceed ISO 9000 standards, abide by Uniform Commercial Code (UCC) is the form of an express promise (oral or written) by the seller as to the quality, abilities, or performance of a product (UCC ?§ 2??“313). The seller need not use the words promise or guarantee to make an express warranty.(Jennings, 2006, p. 410) We will continue to abide the 1914 Federal Trade Commission Act and the Wheeler-Lea Act of 1938. We will continue to ensure that each of our products is free of any design defects. Since our products are made up of chemicals we will also continue to comply with OSHA standards to ensure our employees safety. For each of our deliverable products we will ensure that labels with proper warnings in order to reduce product liability torts because of misuse, contributory negligence or assumption of risks. We will continue to comply with the Consumer Product Safety Commission (CPSC) and International Standards Organization??™s 9000 Guidelines for Quality Assurance and Quality Management.
We will continue to abide and revise our Sustainability Study that outlines the process for designs and test new products, designs and test new production processes and evaluates new chemicals, polymers and dyes used in the manufacturing process.International Law
Riordan will continue to use the services of law firm of Litteral & Finkel since they are a large international law firm that has expertise in all areas of the law. In the event that they do not have the expertise in a particular matter they will outsource to a firm with the specialization acting as a third party contractor. The firm has offices in a number of cities world wide and a representative can be dispatched if needed to anywhere in the world should the need arise. With manufacturing in China and products shipped world wide it is important that we observe the laws of various countries, international trade customs and international agreements. Article 38(1) of the Statute of the International Court of Justice (a court of the United Nations that countries consent to have resolve disputes) is a widely recognized statement of the sources of international law: The Court, whose function is to decide in accordance with international law such disputes as are submitted to it, shall apply:
(a) international conventions, whether general or particular, establishing rules expressly
recognized by the contesting states;
(b) international custom as evidence of a general practice accepted as law;
(Jennings, 2006, p. 26)
Other areas of consideration for international issues to observe and abide by are:
??? Treaties??”agreements between and among nations regarding their political and commercial relationships.
??? Act of state doctrine??”immunity of governmental action from discipline by other countries; sanctity of government??™s right to govern.
??? European Union??”group of twenty-five nations working collectively for uniform laws and barrier free trade.
??? Uniform laws??”Contracts for the International Sale of Goods (CISG).Tangible and Intellectual Property
Riordan??™s tangible assets are in excess of 19 million which is comprised up of our property, buildings and equipment. In order to protect our assets we must ensure that all proper documents are in order such as documents of title, bills of sales so that we may provide proof of ownership if the need should arise. As we expand our organization and when decide to purchase more tangible property we should determine if leasing would be in our best interest. A lease is a right of use and possession of property for a fixed or open ended period of time. (Jennings, 2006, p. 620) In the event we need to secure a loans to purchase tangibles we will ensure that we conform under Article 9 of the Uniform Commercial Code (UCC). Riordan will also ensure that all of our tangible property has the proper and adequate insurance in order to cover theft and accidents.
The foundation that Riordan was built on is its patents and ideas of Dr. Riordan. The corporate compliance plan will include annual reviews to ensure that our federal protections for intellectual properties are protected. Riordan??™s patents are protected under Article 1, Section 8, of the U.S. Constitution. The review will ensure that are patents are properly registered and renewed with the U.S. Patent and Trademark office. To ensure Riordan??™s intellectual property is protected in foreign countries we will rely on protection from the World Trade Organization (WTO) which was modified in 1986 to include protections and extensions of intellectual property rights. This will help ensure that our patents and manufacturing ideas are not copied in foreign countries. In the event that our intellectual property is compromised, we will use rely on the International Chamber of Commerce (ICC), which is a private organization that handles arbitration cases from parties in 123 countries. The ICC also provides mediation, referred to as conciliation, services. In conciliation, the court assigns an expert to work with the parties to try to achieve a settlement of the case. Internally we will also ensure that all Riordan employees sign confidentiality agreements to protect ourselves from employees who leave the company and use our ideas.Legal Forms of Business
Riordan Manufacturing Inc. was established in 1993 and does have formal filings of articles of incorporation. Our business model is based on the Model Business Corporation Act (MBCA),as drafted and revised by the Corporate, Banking and Business Section of the American Bar Association, is the uniform law on corporations. (Jennings, 2006, p. 856) Of most importance each officer and director must be aware of and know the consequences of the Sarbanes-Oxley Act (SOX). Riordan will strictly abide by these rules. On July 30, 2002, the Sarbanes-Oxley Act (SOX), which establishes a new system of checks and balances for public corporations, was signed into law. Sarbanes-Oxley redefines the duties and relationships among corporate executives, directors, audit committees, in-house and outside counsel, independent auditors, insurers, securities exchanges, and government regulatory agencies. These laws and related regulations promise to spawn both private litigation and administrative enforcement actions involving civil penalties and criminal sanctions against corporations and those fiduciaries responsible for guiding their activities. SOX legislation affects CEOs and CFOs directly, increasing their certification responsibility and reporting requirements. The Act creates a federal system of checks and balances within public companies, effectively creating independent duties of Audit Committees and other parts of corporations. CEOs, CFOs and Audit Committees will increasingly want advice separate from company counsel when issues arise. With the creation of whistleblower rights within companies and expanded shareholder rights, companies, their executives and directors face heightened scrutiny and increased exposure to criminal and civil penalties for wrongdoing. (In F. B. Todd (Ed.),, 2009) We will ensure that proper auditing will be conducted quarterly from reputable audit firms to ensure we are compliant with state, federal and international laws to ensure our shareholders and employees that our financial statements are accurate and factual.Governance
Corporate governance is the set of practices that best provides for the effective, open, and visible management of an organization. The comprehensive study of corporate governance is an acknowledged necessity for good performance in business, but this type of governance is still new to many organizations. Corporate governance involves detailed understanding of communication and involvement, policy and procedure, and performance management. It also includes codes of conduct and ethics, leadership, human resources management, and corporate compliance.(wiki, 2003, p. 1) The corporate compliance plan will include audit and ethic committes to oversee business practices, officers and directors will be required to have ongoing and continuous education on ethics and moral obligations. Riordam will comply will all Antitrust Laws, Foreign Corrupt Practices Act of 1977, Export Control and Import Laws and Environmental Protection Laws. Furthermore officers and directors will be held accountable and approriate disciplinary action taken including termination or criminal charges for any violations to Riordans goveranance policies.Conclusion
Riordan??™s new Corporate Compliance Plan is being adopted in accordance to industry standards and will not only meet but exceed industry standards. Our Corporate Compliance Officer will be responsible for ensuring that all areas on our organization are compliant as outlined in our plan by the use of written policies and procures, auditing and monitoring, training and education, enforecment of standards, regulatory and compliance oversight and ethical and moral responsibilities. Other areas to be addressed will be reevaluated our employee handbook making revisions where needed, auditing all of our contracts and all legal business forms.References
(2009, ). Corporate Governance. Message posted to Vhttp://groups.yahoo.com/phrase/corporate-governance-and-compliance, archived at
Corporate Governance. (2003). Retrieved May 10, 2009, from Corporate Governance Definition: http://en.wikipedia.org/wiki/Corporate_governance
Jennings, M. M. (2006). Business Its Legal, Ethical, and Global Environment (7th ed.). : Thomson.
Sarbanes-Oxley Act. (2009). In F. B. Todd (Ed.), . Retrieved , from http://www.frostbrowntodd.com/practice/servicedetail.aspxservice=180
Running head: CORPORATE COMPLIANCE PLAN – RIORDANCorporate Compliance Plan – Riordan