Corporate Compliance Plan Corporate Compliance Plan
Riordan Manufacturing Inc. is an industry leader in the field of plastic injection molding. With facilities is San Jose, California, Albany, Georgia, Pontiac, Michigan, and Hangzhou, China (UOP, 2010). As officers and directors in this corporation you all know that Riordan wants to remain committed to the high standards set forth by founder Dr. Riordan. I have prepared the following corporate compliance plan to ensure that his vision remains alive.
Enterprise Risk Management (ERM)
ERM will be based on the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Using their recommendations ERM will be instituted to mitigate the legal liabilities of directors, officers, and all other employees of Riordan. In reviewing the current policy, Riordan retains the services of an independent law firm to deal with all of its legal issues. However, this company has no alternative dispute resolution (ADR) process in place. According to the website Hg.org, an alternative dispute resolution provides an alternative to going to court to settle disagreements, methods include arbitration, where disagreeing parties agree to be bound by the decisions of an independent third party, and mediation where a third party attempts to arrange a settlement between two sides (Hg.org, 2009). ADR in the form of mediation will be used by Riordan to solve any conflicts internally with employees as well as externally with customers or other business partners. Mediation will save money and avoid long legal battles that could have a negative effect on the company??™s public image. Enterprise Liability
Enterprise liability can be defined as criminal liability imposed on the entire firm for the crime committed by a constituent business, department, or unit (BusinessDictionary.com, 2010). In essence as a manufacturing business with four fully operational facilities including a plant in China, Riordan is an at risk company. Further explained Riordan assumes the majority of any criminal liability for the acts of its agents, departments, and partnerships. In direct response to the aforementioned statement, Riordan has issued a policy manual with a strict disciplinary process. The manual warns workers that all employees are to comply with letter, spirit, and intent of all relevant laws, and to refrain from any illegal, dishonest, or unethical conduct (UOP, 2010). To further ensure that Riordan??™s policies are followed the quality control department will be used to make certain that all products are free from defects and that international laws are respected. This is of vast importance because of the facility in China. Riordan must remain cognizant of Chinese laws and customs.
In its mission Riordan states six sigma, leading edge R&D and exceeding ISO 9000 standards define the attitude and abilities of Riordan Manufacturing. We are industry leaders in using polymer materials to provide solutions to our customers challenges (UOP, 2010). Riordan makes and manufacturers materials that fall under strict rules and regulations. Six sigma is a business strategy that seeks to improve the quality of process outputs by highlighting and removing the causes of defects. The plant in Pontiac, Michigan has alerted management via an internal memo that problems have arisen. They state that recent cost-cutting measures have lowered the quality of products and that the Food and Drug Administration (FDA) may launch an investigation into this situation as well as a wrongful death case. Riordan will be involved in serious litigation if it is proven by the FDA that low quality products with defects or manufactured at Riordan??™s Pontiac plant and that this led to the death of a human-being. In direct response a thorough investigation into the Pontiac plants claims must be conducted and a report disputing the claims should be forwarded to the FDA.
Riordan??™s Chinese counter-parts are totally responsible for dealing with the hazardous waste at the Hangzhou plant. Management must trust that their Chinese partners are abiding by the laws and not placing citizens and fellow employees at risk. It would be in the best interest of management to hire additional legal counsel who is fully versed in any and all laws involving regulatory issues associated with the Chinese government.
Tangible and Intellectual Property
Tangible property is the type of property we can see and touch. Delivery trucks, computers, desks, and the business and land in which the business is located (Jennings, 2006). With four locations, Riordan undoubtedly has an enormous amount of tangible property. Examples include transportation, manufacturing, and office equipment as well as the materials needed to make the actual products themselves. In order to protect all tangible property management would be well advised to create a system in which all computers and other valuable equipment and company documents can be secured and tracked. In addition security officers should be employed to provide 24 hour protection of employees and valuables. Surveillance equipment and alarm systems should also be in place to add further protection.
Intellectual property is any, asset that consist of human knowledge and ideas. Riordan??™s mission states our R&D is, and will remain the industry leader in identifying industry trends (UOP, 2010). Riordan places an emphasis on its research and development department. This means this department deals with a large number businesses, independent researchers and other entities to develop, distribute, and market products. Therefore, protection of Riordan??™s intellectual property rights as well as the entities they conduct business with is important. I recommend that legal counsel, who are experts on this subject be hired. This would allow Riordan to be protected concerning issues of trade secret protection, copyrights, trademarks, patents, and software licensing. They should also provide training to all employees on the laws that constitute product infringement and all other possible violations related to intellectual property.
Legal Forms of Business
In order to continue to be a profitable business Riordan has to abide by several existing laws. Compliance of the requirements set forth by the Occupational Safety and Health Administration (OSHA) will help eliminate work related injuries and lawsuits. It should be mandatory that when an employee feels unsafe or views violations he or she report them to supervisors immediately. Management must investigate all reports made by employees and routinely conduct safety inspections of all equipment and work areas. Because Riordan manufactures plastics, the company must be in full compliance of the Clean Air and Water Act. If any violations are discovered, they need to be corrected and documented immediately. Riordan is committed to providing accurate information regarding its products to ensure customers that federal and state protocol, have been met. All products carry an express warranty for the quality, abilities, or performance of the products as provided in the Uniform Commercial Code (Jennings, 2006). To avoid litigation involving product liability management must adhere to the requirements of the code and the guidelines of the Federal Trade Commission Act.
Riordan manufacturing is a profit corporation with unlimited duration, free transferability of interest, limited liability for shareholders owners??™ continuity and centralized management (Jennings, 2006). In essence the aforementioned quotation means that Riordan will abide by the principles of the Model Business Act and proceed accordingly when it comes to complying by the rules and regulations of the state they are operating in. Other issues involving governance include the obligation of financial reporting. Financial reporting is a critical part of any business and allows for corporate governance to function flawlessly. Riordan management should hire competent auditors to examine all financial records and report any violations. Riordan like all other public companies are bound by the Sarbanes-Oxley requirements that call for ethical conduct and honest open financial reporting. In conclusion management must ensure that all financial records are up to date, accurate, and easy to access
Riordan Manufacturing Incorporated is a profitable business with many assets, to protect these assets a proper compliance plan that minimizes risk has to be utilized The compliance plan I have created with recommendations by COSO, provides Riordan with a blueprint for future success. If this plan is followed any violations of laws involving this company should be drastically reduced. References
BusinessDictionary.com, (2010). Enterprise Liability, Retrieved January 17, 2010,
H.G.org, (2009). Alternative Dispute Resolution, Retrieved January 13, 2010,
Jennings, M.M. (2006). Business: It??™s legal, Ethical and Global (7th ED), Retrieved January 17, 2010, from, http://ecampus.phoenix.edu
University of Phoenix. (2010), Riordan Manufacturing Simulation, Retrieved January 13, 2010, from University of Phoenix, Law/531
Corporate Compliance Plan Corporate Compliance Plan