Running Head: Corporate Compliance PlanCorporate Compliance Plan
November 16, 2010? Introduction
To develop a corporate compliance plan for Riordan Manufacturing six areas of concern will be addressed; Alternative Dispute Resolution (ADR), enterprise and product liability, international law, tangible and intellectual property, legal forms of business, and governance. Also included are the relevant compliance standards and procedures, employee-training programs, monitoring and auditing systems. As well as the enforcement, procedures and responses where there is any breach of the compliance plan, what actions will be taken, and what corrections are needed to be made.
Dr. Riordan, a professor of chemistry, who had obtained several patents relative to processing polymers into high tensile strength plastic substrates, founded Riordan Manufacturing. Sensing the commercial applications for his patents, Dr. Riordan started Riordan Plastics, Inc. in 1991 (University of Phoenix, 2006). Dr. Riordan??™s focus was on research and development (R&D) and the licensing of its existing patents, but in 1992 the company obtained venture capital, which was used to purchase a fan manufacturing plant in Pontiac, MI. At that time, the companys name was changed to “Riordan Manufacturing, Inc.” In 1993, the company expanded into the production of plastic beverage containers when it acquired a manufacturing plant in Albany, GA (University of Phoenix, 2006).?
Alternative Dispute Resolution
All discrepancies, discord and conflict that sometimes occur amongst employees, associates and management at any given time are subject of leadership, and negligence of compliance guidelines set forth shall prompt the use of an alternative dispute resolution (ADR). The ADR clause is non-inclusive of personal conflicts arise within the company unless the productivity is compromised. Employees are encouraged to implement the chain of command by contacting an immediate supervisor as a first attempt to resolve issues. If the immediate supervisor does not resolve issues or if it involves that immediate supervisor the employee is advised to report the issue to the HR department by using the designated compliance hotline available to all employees via the intranet.
Mediation will be used in effort to resolve the issues. The disputing parties are encouraged but not forced to participate in an informal mediation process. The mediator is not responsible for the decision, but to act as a liaison between disputing members to resolve the issue at hand. If resolved by using meditation, and agreement is made it is noted by the mediator and it will be recorded by the CCO and is binding. Upon honest attempts to resolve issues with mediation, unresolved disputes amongst the parties after 48 hours they will then agree to the next step in the ADR clause called arbitration. A neutral party that does not have a stake in the outcome will make the final judgment. Arbitration is used when parties cannot resolve their personal conflicts through negotiation and communication. This could be effective way to solve any personal disagreements aroused in any team. Arbitration is private and confidential. Using ADR will keep the cost down on litigation.
Enterprise and Product Liability
There are liabilities that have been identified, including those under the enterprise umbrella. Enterprise liability Criminal liability imposed on the entire firm for the crime committed by a constituent business, department, or unit. One major method protocol to implement the monitoring of all internal control systems via the Committee of Sponsoring Organizations (COSO) of the Treadway Commission has been put in place. The risk manager is expected to oversee all aspects relating to our enterprise liabilities with support of the COSO. The COSO framework defines internal control as a process, affected by an entity??™s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: Effectiveness and efficiency of Operations, Reliability of Financial Reporting, Compliance with applicable laws and regulations (Committee of Sponsoring Organizations of the Treadway Commission, 2010). The COSO internal control framework encompasses five related components taken from business management. According to COSO, these components provide an effective framework for describing and analyzing the internal control system implemented in an organization as required by financial regulations such as the Securities Exchange Act of 1934. This provides governance of securities transactions on the secondary market (after issue) and regulates the exchanges and broker-dealers in order to protect the investing public (Securities Exchange Act of 1934, n.d.).
Riordan Manufacturing, Inc. will record all reports of design processes, warranties, manufactured defects and product safety features. If a product engineer identifies a possible hazardous feature, the defect must be documented immediately. Failure to document the defect could result into a legal dispute favoring the plaintiff. Proper documentation of all safety features and warnings will aid in avoiding such issues. The design and development will be responsible for testing of the products this to avoid recalls and any legal issues that might arise from this. The legal team will be responsibly for supporting the design and development team of all necessary protocol before releasing items to the public.Tangible and Intellectual Property
The literal definition of tangible property is anything which can be touched, which includes real property, personal property, immovable property and moveable property. All tangible property of Riordan Manufacturing, Inc. will be secured using the following methods:
??? Automatic locking system of all sensitive areas
??? Automatic/timed alarm system
??? Team of security personnel will be selected to monitor the required areas 24 hours a day.
??? Background checks for all employees working in high security areas and those with access to sensitive company data
Any Riordan employee will be subject to immediate termination, if found guilty of the removal of any tangible property without prior approval or taken negligent of company standards of ethics. The manager of the accused may opt to pursue ADR, if reasonable doubt of the accusation occurs. All employees have the right to ADR.
Intellectual property is ownership of ideas. Unlike tangible assets to your business such as computers or your office, intellectual property is a collection of ideas and concepts. There are only three ways to protect intellectual property in the United States: through the use patents, trademarks or copyrights. Riordan Manufacturing, Inc. protects intellectual properties by the use of patents, copyrights and trademarks. Intellectual property is divided into two categories: Industrial property, which includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and copyright, which includes architectural designs. Because Riordan is the innovator among plastic manufacturers, the importance to protect our ideas is vital. Thus stating the necessity of protecting intellectual properties, the following protocol will be put in place to aid in avoiding legal issues: ??? Contracts between Riordan Manufacturer??™s Inc. and architects/product designers in agreement to create products/designs for Riordan Manufacturing, Inc. and under the Riordan brand
??? Research and product development team: responsible for research and benchmarking to protect our innovative efforts
??? Updates of any additional intellectual property updates from the legal team to secure all assets
Legal Forms of Business
Riordan Manufacturing is a US corporation so it subject to the laws associated with a corporation. This compliance plan will focus on the laws associated the liability of the directors and officers of Riordan Manufacturing. Having the ???corporate veil??? will not protect the individual corporate officers of Riordan so this plan is critical to the protection of the board and its members. Since Dr. Michael Riordan is the president and CEO of the corporation, his personal risks are also established.
The Model Business Corporation Act (MBCA) is considered the law of corporations and will be the backbone of this corporate compliance plan. Since the corporate office is in San Jose, California, Riordan Manufacturing is to follow the specific laws associated with the California MBCA. These laws are to be incorporated into the employee handbook and also made available on the company intranet for employees.Governance
Riordan Executive Managers and Directors are involved with the responsibility to insure compliance with the organization strategy, policies, guidelines and accountability to the stakeholders in the organization. The issues that are requiring corporate governance principles include internal controls, oversight and management of risk, oversight of the entity??™s financial statements, and review of the compensation arrangements for the CEO and other executives. Corporate governance must go beyond the duties and responsibilities; it must go beyond the law. It must strive to meet well defined, written objectives that are fair, efficient and transparent. Financial reporting is a vital component necessary for corporate governance to function effectively. Executive Management should expect the financial information to be in compliance with statutory and ethical obligations as prepared by accountants and auditors competence.
Riordan operates as US Corporation however; it is involved in a joint venture with China. There are different laws in China that the company is responsible for upholding. Riordan??™s in China will have to figure out how to deal with the hazardous waste at the Hangzhou plant. As Riordan continues to grow as an international organization, management needs to make sure that all plant operates legally and ethically, and that operations are uniform in all of its location. The Compliance Plan, which includes the written code of ethics that all the employees are held accountable for upholding. The Plan will also make sure that the operation of the company is in accordance with US Treasury Department Office of Foreign Asset Control (OFAC), which enforces compliance with United States sanctions against embargoed countries. The Plan will make sure that the export policy is in accordance with United States export administration regulations. The Plan states that the company is to be in complete compliance with the Foreign Corrupt Practices Act of 1977 (FCPA) that prohibits offering, extending, accepting, requesting bribery in any form. The last thing that the Plan will do is to have an effective internal controls; this will include monitoring, audits, reporting, and strict compliance with the Sarbanes-Oxley Act of 2002.Reference:
University of Phoenix. (2006). Riordan Manufacturing [Computer Software]. Retrieved November 14, 2010 From: University of Phoenix, Simulation, LAW531 website
Committee of Sponsoring Organizations of the Treadway Commission.? (2010).? Committee of Sponsoring Organizations of the Treadway Commission.? Retrieved November 14, 2010 From: http://www.coso.org/guidance.htm
Running Head: Corporate Compliance PlanCorporate Compliance Plan