Compliance Blog Roundup: AIG Bonuses – Ethics, Rule of Law, and Liddy’s Quandry

It is Tuesday, which means that it is time for another edition of the Compliance Blog Roundup. We will begin this week’s roundup with an addendum to our discussion yesterday, which centered on the much maligned decision of recently bailed out AIG to honor executive bonuses for leaders of the the division that focused on the controversial credit default swaps.

Our first two links today go to the excellent Business Ethics Blog by Chris MacDonald, with other blogs and other topics thereafter. Titles, excerpts, and links below:

What Should AIG’s Liddy Do?

What on earth should Edward Liddy do? Liddy was asked a year ago by the US government to take over as CEO of beleaguered insurance company, A.I.G. I’m not sure why anyone would want such a job. (Liddy is being paid $1/year, plus equity grants which give him a vested interest in seeing the company do well). Anyway, tough job.

Latest challenge on Liddy’s agenda: the recent dustup over $165 million in bonuses scheduled to be paid to executives. Bonuses? To executives? At A.I.G.? Why give bonuses to a bunch of people who so mismanaged their own company, and indeed contributed to destabilizing the entire U.S. economy? How on earth could that be ethical?

>>>read entire post at The Business Ethics Blog by Chris MacDonald

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AIG Bonuses, Ethics, and the Rule of Law

It’s not unethical to pay people money you are contractually obligated to pay them. Even if doing so makes you, or other people, want to pull your hair out. It’s the right thing to do. Not always because the person getting the money deserves it, in some abstract sense, but because you promised.

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You don’t have to like it, any more than you have to like providing state-appointed attorneys to child molesters (not that I’m comparing…well, you know.) Anyway, the point is: there are some things a civilized people governed by laws (rather than by the passions of the moment) have to uphold. The right of the accused to assistance in his defense is one; the right to speak (even if what you say is abhorrent) is a second; and the fulfillment of contracts is another.

>>>read entire post at The Business Ethics Blog by Chris MacDonald

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The Button-Down Mafia: How the Public Accounting Firms Run a Racket on Investors and Thrive While Their Clients Fail

Enron, WorldCom, HealthSouth, Tyco, Parmalat, Adelphia…You would think enough lessons had been learned. The financial markets are a mess and the capitalist system threatened. The systems in place to anticipate and preempt market risk failed completely. Financial firms leveraged their capital to an unprecedented extent with no checks and balances. Companies took on enormous risks with minimal disclosure to their shareholders.

And the largest global public accounting firms — KPMG, PricewaterhouseCoopers, Deloitte, and Ernst & Young — again failed to prevent, warn, or mitigate the desperate financial situation, the national crisis of significant proportions we now find ourselves in.

>>>read the entire post by Francine McKenna at The Huffington Post

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France Decides Not to Criminalize International Bribery

“France has severely restricted its jurisdiction and its ability to prosecute cases with an international dimension, which, given the country’s importance in the international economy and the scale of many of its companies, is very regrettable,” according to a report by GRECO. The Group of States against Corruption (GRECO) was established in 1999 by the Council of Europe to monitor States’ compliance with the organization’s anti-corruption standards.

>>>read the entire post at Compliance Building by Doug Cornelius

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The Case for More Compliance

The pressure these days to comply with the Foreign Corrupt Practices Act and other anti-corruption laws is coming from several directions at once. Last week we mentioned whistleblower hotlines as one example. But there are other reasons why it’s harder than ever for companies to cheat and for bride-taking officials to hide their crimes. Here’s a quick look at some of what’s happening.

>>>read the entire post from the FCPA Blog

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Ultimate 3rd Party/Supply-Chain Risk & Compliance Platform

A chain is only as strong as its weakest link . . . in the case of business relationships this could be an organization’s supply-”chain” or other business relationship such as vendors, outsourcers, and service providers that bring increased risk and exposure to the organization.

Today’s organization is a complex diversity of processes and business relationships that span the globe. Organizations struggle to identify, manage, and control Governance, Risk Management, and Corporate Compliance (GRC) across extended business relationships. Whether it is called 3rd party, vendor, or supply-chain – risk and compliance challenges do not stop at the traditional boundaries of the organization.

>>>read entire post at Corporate Integrity by Michael Rasmussen

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Tags: Accounting, AIG, business ethics, Compliance, Governance, grc, international law, risk management