“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”.
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.
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.
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.
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.
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!
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.