Cracking the Code of a Good Corporate Code of Conduct

Cracking the Code of a Good Corporate Code of Conduct.

“When former Morgan Stanley employee Garth Peterson pled guilty to violating the Federal Corrupt Practices Act by conspiring with a Chinese official to circumvent his company’s internal controls, the company avoided being penalized because it could provide substantial documentation of a robust compliance system. Had Morgan Stanley not been so committed to the implementation of transparent and thorough internal controls, things might have turned out very differently.”

Developing, implementing, and enforcing appropriate codes of conduct for businesses can be a time-consuming, expensive, and sometimes painful process for businesses. Publicly traded companies are, however, required to implement such codes of conduct under the Sarbanes-Oxley Act. Even for non-publicly traded businesses, such policies, despite the birthing panes associated with their creation, can pay significant dividends on a number of fronts. They provide clear guidelines for both management and employees as to acceptable and ethical behavior in their industry, which reduces potential liability by reducing the likelihood of systemic illegal or unethical conduct.

The article linked to above from law.com talks about some of the benefits and challenges associated with putting codes of conduct in place. Ultimately, putting this kind of policy into place should be strongly considered by any growing company. Even if “now” is not yet the time for it, it should be question of “when” not “if”.

Netflix may have to provide closed captions online – SFGate

A federal judge has taken a step toward requiring Netflix to provide closed-captioning for the deaf on its video-streaming website, ruling that the Americans with Disabilities Act covers businesses that serve their customers online.

via Netflix may have to provide closed captions online – SFGate.

This has potentially wide reaching implications for many businesses with are either based online or which provide content online.  While there are potentially conflicting rulings from other courts, including the U.S. Ninth Circuit Court of Appeals, the ruling issues by U.S. District Court Michael Ponser from the District of Massachusetts opens the door for requiring “reasonable accommodation” for disabled individuals in their use of online resources.

In the suit between Netflix and the National Association for the Deaf, Netflix argued (unsuccessfully) that Federal Communication Commission regulations exempted Netflix from having to meet the standards of the more generally worded ADA.

A 1996 federal law required closed-captioning for television programs but did not address online videos. Federal Communication Commission regulations will require captioning on Internet videos of all U.S.-produced, post-1996 programs by March 2014.

The District Court rejected Netflix’s arguments, stating that the FCC regulations and the associated timeline “reflects only minimum compliance standards” and that a court could invoke the ADA to order closed captioning at an earlier date on all videos.

RI repeals law that made it a crime to fib online – Yahoo! News

RI repeals law that made it a crime to fib online – Yahoo! News.

From the vaults of “They passed a law making it illegal to dowhat?!?!”

Apparently in 1989 the state of Rhode Island passed a law making lying on the internet a misdemeanor crime punishable by fines up to $500 and as much as one year in prison.

Quoting from the Yahoo news article: “If you’ve ever lied to a potential Internet date about your weight, texted your spouse that you were someplace you weren’t or emailed mom to say how much you love that ugly new sweater, you were breaking the law if you did it in Rhode Island.

But state lawmakers have now decided that white lies online should no longer be a crime. The General Assembly voted this month to repeal an obscure 1989 law that made fibbing on the Internet a misdemeanor punishable by fines of up to $500 and as much as a year in prison. Gov. Lincoln Chafee signed the measure.”

Good grief! Reducing fraud online is all well and good. Doing so in ways that impinge upon free speech and criminalize non-fraudulent conduct is another thing altogether.

The good news is, at least they have now repealed the law. This, however, is an object example of well-meaning legislators passing laws without our due regard to the consequences that the law may create.

US patent trolling costs $29B: study – Strategy – Business – News – iTnews.com.au

US patent trolling costs $29b: study – Strategy – Business – News – iTnews.com.au.

A recent study, published by James Bessen and Micahel Meurer of the Boston University School of Law examines the direct costs of patent litigation by “non-practicing entities” (NPEs), more commonly known as “patent trolls”. Their assessment is that the direct costs of patent litigation initiated by NPEs in the U.S. rose from $6.6B in 2005 (encompassing 1,401 claims) to $29B in 2011 (encompassing 5,842 claims). Earlier research from the same authors found that the the annual wealth lost by publicly traded companies in the U.S. was a staggering $80B in 2011.

The authors identify increasing patent litigation as “a significant tax on investment in innovation,” with the the direct result of organizations having less money to invest in their research with increasing resources being bled off into legal defense.

Bessen and Meurer reject the notion put forward by IP rights firms that asserting patents plays a socially valuable role in enabling inventors to realise greater profits from their innovations. Rather, the authors assert that patent lawsuits are a social loss and not a transfer of wealth as rights holders assert.

 

Older means wiser to computer security

Older means wiser to computer security.

This points out some interesting, but not surprising trends in how the different generations view privacy and security on the internet. In a world of increasing cyberattacks and major financial and privacy hacks, this can spell seriously bad news for people who don’t take privacy and security issues seriously!

Security still the ‘No. 1 obstacle’ to cloud adoption — Cloud Computing News

Security still the ‘No. 1 obstacle’ to cloud adoption — Cloud Computing News.

“International companies are still wary of cloud adoption because of concerns over data security and legal exposure, including worries about American government interference.”

A good perspective piece, if a bit short on empirical data. Still worth a read and some subsequent thought about where computing resources are headed over the next few years.

See also: “Why CIOs are learning to stop worrying and love the cloud“

Why Do I Need an Advisory Board and How Do I Build It? – Global Business Hub – Boston.com

Why Do I Need an Advisory Board and How Do I Build It? – Global Business Hub – Boston.com.

Global Business Hub has published a nice piece on Advisory Boards for companies, why they can be useful, and some tips for building out an effective one. For companies considering adding (or improving an existing) Advisory Board, this article is worth a read.

Finding a Knut: Kickstarter advice from an entrepreneur – Global Business Hub – Boston.com

Finding a Knut: Kickstarter advice from an entrepreneur – Global Business Hub – Boston.com.

This article shares valuable insight from an entrepreneur of the challenges of funding a project through Kickstarter. It is by no means a comprehensive examination of the process, but it does share some important lessons regarding the process and what a company can learn from the process as it works its way towards its funding goal.

There are enormous opportunities for companies to leverage Kickstarter as seed funding source, but there are speed-bumps that are likely to come up along the way. Understanding where to look for these speed-bumps and being able to navigate them successfully is vital part of the Kickstarter process. Chad O’Conner’s article presents a great road-map to a few of these speed-bumps. If your company is thinking about using Kickstarter or is looking for funding thorough any outlet, this article is well worth the read. Knowledge is power.

FTC Charges Businesses Exposed Sensitive Information on Peer-to-Peer File-Sharing Networks, Putting Thousands of Consumers at Risk

FTC Charges Businesses Exposed Sensitive Information on Peer-to-Peer File-Sharing Networks, Putting Thousands of Consumers at Risk.

The FTC has announced two recent settlements with companies who are alleged to have illegal exposed sensitive personal information of their customers by allowing peer to peer file-sharing software to be installed on their corporate computer systems.

One of the settlements was with the Georgia automobile dealership Franklin’s Budget Car Sales, Inc., also known as Franklin Toyota/Scion, of Statesboro, Georgia.

The FTC alleged that Franklin failed to implement reasonable security measures to protect consumers’ personal information, and, as a result, information for 95,000 consumers was made available on the P2P network. The information included names, addresses, Social Security Numbers, dates of birth, and driver’s license numbers.

The agency charged that Franklin failed to assess risks to the consumer information it collected and stored online and failed to adopt policies to prevent or limit unauthorized disclosure of information. It also allegedly failed to prevent, detect and investigate unauthorized access to personal information on its networks, failed to adequately train employees and failed to employ reasonable measures to respond to unauthorized access to personal information.

Enforcement actions such as this point up the serious implications of inadequate (or non-existent) data privacy and security policies. This is an area of the law which is drawing ever-increasing scrutiny from regulatory agencies. Businesses need to take the handling of personal information very seriously and ensure that it not only has developed but also implemented appropriate polices and procedures concerning the gathering, storage, protection, and destruction of such information.

LLC: Which Flavor Is Right for Your Company?

LLC: Which Flavor Is Right for Your Company?.

This article from Mashable.com is a good overview of the choices and options facing start-ups in choosing what sort of business entity to form. This particular article focuses on the various flavors of Limited Liability Companies (LLCs) that exist in the U.S.

LLCs are often excellent entity choices for start-ups due to their flexibility, tax treatment, and ease of both set-up and administration.  If you are thinking of starting a new business, this article is a good source of information on LLCs. It will arm you a good basis for discussion with your attorney (you do have a business attorney helping you, right?) about what choice of entity will make the most sense for the company you envision.