Compliance, governance and risk management - Web 2.0 challenge

My.ComMetrics.com
ComMetrics

Session 9: Governance, risk and compliance

http://www.slideshare.net/ComMetricsUniversity
Latest version can be found here just before class
Presented by

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http://info.cytrap.eu/?p=134
social media trends 2011

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Urs E. Gattiker , Ph.D.

2008_06_16

ComMetrics
_Wrap up from last session

3 critical things learned – why changing a company logo may be for the birds

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_Introduction >Purpose >HowTo >Tools & Tips >Decision >Conclusions

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_SM can mean that a few people can make a lot of noise
– sometimes even a small group can convince
management to change brand logo, etc.

#1 Does logo still represent what we sell
Challenge today

Strategy: Adjust the logo and/or strategy
PS. Sirens – the creatures in Greek mythodology who lured sailors to
their death.
http://www.youtube.com/watch?v=W4eWHWZ3JZY

Only an MBA can come with such an idea

http://www.bnet.com/blog/salesmachine/why-starbucks-new-logo-is-a-dumb-idea/13950

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>Introduction _Purpose >How to >Decision >Conclusions >Tools & Tips

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_Starbucks logo.

Solution: Starbucks' revised, streamlined logo removes the
outer green circle that bares the Starbucks Coffee name, enlarging
the inner siren, sometimes referred to as a sea nymph, in the
company's signature green hue.
Read – Oct/Nov. 2010 – GAP logo change http://commetrics.com/?p=10899

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_Example from a client

How can we make these things work

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_Restaurant - lunch hour rush

#1 12:15 – everybody wants to sit = 15 minute wait
Challenge & kitchen being under pressure

Strategy: Getting regulars to come before or after rush hour

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_Restaurant lunch hour rush: Exceeding com-
pliance & food/customer service standards

#1 12:15 – everybody wants to sit = 15 minute wait
Challenge & kitchen being under pressure

Strategy: Getting regulars to come before or after rush hour

Solution Seasonal ingredients, watch price – 15% discount
must order < 11:30 or after 13:30 hours
LA lunch truck – tweet daily special to followers
See also: http://www.ft.com/cms/s/2/70fab5a8-f762-11df-8b42-00144feab49a.html

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_3 Why it matters – today„s 2 nuggets

1 What is compliance, governance and best practice?

2 How can one be compliant while still not follow the check-box
mentality?

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_Purpose

What is this all about?

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>Introduction _Purpose >HowTo >Tools & Tips >Decision >Conclusions

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_What is governance and compliance?

Definition in textbook?
Does you textbook define governance, regulation & compliance?
How were compliance/governance or regulation defined in other
MBA courses/modules?

How does governance and compliance / regulation relate to
innovation?

What is your company„s compliance policy?
(please bring document to class)

::::::::::::::::::::::::::::::::::::::
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What is the governance approach your company uses...

How does compliance, regulation and governance affect your
company„s outsourcing relationships (e.g., suppliers, sub-contracting,
etc.)?

::::::::::::::::::::::::::::::::::::::

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CyTRAP Labs - risk

-

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Piracy, copyright, etc.

300, 000 applications and 50,000 book apps on Apple„s App Store.
2010-12-14 a group of 4 Japanese publishers has accused Apple of
‚illegal„ behavior for allowing pirated versions of Japanase novels to
be sold on its popular App store.
For instance, complete works of Haruki Muakami, the author of
Norwegian Wood, The Wind-Up Bird Chronicle and other famous
books is available in Chinese for $1.99

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Piracy, copyright, etc.

Publishes complained about apps allowing users to view
unauthorized scans of Japanese manga, or comics.

This seems to be a scalability problem but not a willingness one on
Apple„s part.
„Apple is yet to clearly specify a contact point for removal requests or
the procedures for removal, and even for the content that has been
removed, it is unclear who removed the content and how the
dtermination for removal was made,“ they said.
Neither has WordPress.com a proper process: http://commetrics.com/?p=11715

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_From Purpose to HowTo

How do we put this into practice?

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>Introduction >Purpose _HowTo >Tools & Tips >Decision >Conclusions

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_Margin of Error

50 year maturity bonds as an example

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_Flawed maths a factor in financial mayhem

50 year maturity bonds serves as an example

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_Guidelines CyTRAP

Finally, regarding these guidelines:
“… their spirit must be observed as well as their letter.”

http://info.cytrap.eu/terms-privacy/sm-policy

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_Why is governance so difficult to grasp

http://www.youtube.com/watch?v=1jV0AUjx6Ik 7 min

How do you get independent directors?
What has it to do with better governance

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ComMetrics
_3 assigned readings – Topic 9

- we choose a student to moderate the discussion – you can
volunteer yourself for today or for tomorrow

- please have your notes ready – all students

- Chosen reading is:

- Could your risk management approach regarding IT, data,
marketing strategy, R&D fail?
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ComMetrics

- The study, presented recently at the annual meeting of the American
Accounting Association, examined 296 major financial institutions
around the world with assets exceeding $10 billion over the seven
quarters from January 2007 through September 2008. The sample
consisted of banks, brokerages, and insurance companies in 30
countries, including 125 in the U.S. and 131 in Europe.

-What did make a significant difference, though, was the amount of
company stock owned by institutional investors, with greater
institutional ownership translating into poorer stock performance.
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- “...our findings cast doubt on whether regulatory changes that
increase shareholder activism and monitoring by outside directors will
be effective in reducing the consequences of future economic crises.“

- Corporate insiders want to protect their jobs (hide the bad news)
while “... independent directors have an incentive to avoid the
reputational cost of a bankruptcy by pressuring firms to raise equity
capital.” (raise equity in markets).
See also: http://www.accountingtoday.com/news/Independent-Board-Members-Played-Role-Financial-Woes-
55972-1.html

Your instructor has the complete research paper for you – http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1397685
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_Tools & Tips – passwords

- What can we do to manage that risk.... ?

- What type of risks are we talking about?

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>Introduction >Purpose >HowTo _Tools & Tips >Decision >Conclusions

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_Tools & Tips - passwords

- Risks and compliance – managing your passwords – how you can
do it best?

- all 3 months XYZ234_fm (password, can you remember?)

- 19822003@cytrap.eu 19822003weburs@gmail.com
- password: 20Cynthia03

Best, use ou team member„s tool on your PC to store your
passwords:
Rony Shapiro – PasswordSafe is his gift to the world it works http://passwordsafe.sourceforge.net/

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_Decision time – enforcements, audits and fall-outs

- What can an organization do?

- What can the regulator do?

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_Student Case – Strategy – Distributor – Managing Data

- student presents – price increases by suppliers

- How does this affect your stategy

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>Introduction >Purpose >HowTo >Tools & Tips _Decision >Conclusions

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_Student Case

- student presents – class discusses

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_Innovation – do compliance and governance guide us?

http://www.youtube.com/watch?v=EBnBybyr-Jw 6 min – showing compliance to the company that outsourced IT

and data services into the cloud

What about Apple and its election process of board members?

===>http://online.wsj.com/article/SB10001424052748704118504576034020847007238.html?mod=wsj_share_twitte

r

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_HSBC
‚had
Madoff
warning„

The complaint alleges that: ‚The fees they received for their various roles
were nothing more than kickbacks paid for looking the other way.„

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_Compliance and enforcement Source: FT 2010-12-07, p. 17

Allegations that HSBC served as a
major conduit for funding Bernard
Madoff„s huge Ponzi scheme

This investigation will fuel concerns
about HSBC„s compliance and
oversight functions.

Ireland – many „feeder“ funds for Madoff,
investigation ongoing for more than 1 yr.

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>Introduction >Purpose _How to >Decision >Conclusions >Tools & Tips

ComMetrics
_Compliance and enforcement Source: FT 2010-12-07, p. 17

Several investor lawsuits are already
pending in Ireland and France
HBSC lost more than 1bn of its
own money thanks to Madoff
US courts an be dangerous for
European banks.
1998 UBS and Credit Suisse
agreed to pay 1.25bn after a deluge of
negative publicity about their
treatment of Holocaust survivors

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_Compliance and enforcement

2009-03-09 - Union Bancaire Privée (UBP), the second-biggest
investor in hedge funds, on Thursday offered partial compensation to
clients hit by $700m of losses from the Bernard Madoff fraud – as
long as they waive the right to sue. Allegations that HSBC served as
a major conduit for funding

2010-12-07- UBP agrees for a settlment of a lawsuit by mostly
European clients that lost $400mio agreeing to pay up to US$500mio
to Irving Picard the manager of bankruptcy proceedings for clients
that lost in the Madoff ponzi scheme.

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ComMetrics
_3 Why it matters – today„s 2 nuggets

1 What is compliance, governance and best practice?

2 How can one be compliant while still not follow the check-box
mentality?

2011_01_18

>Introduction >Purpose >HowTo >Tools & Tips >Decision _Conclusions

ComMetrics
_One more thing

3 most critical things we learned today

3 things I love to get more infos about

2011_01_18

>Introduction >Purpose >HowTo >Tools & Tips >Decision _Conclusions

My.ComMetrics.com
ComMetrics

Session 9: Governance, risk and compliance

Presented by http://My.ComMetrics.com (free registration)
http://ComMetrics.com (blog)

Roentgenstrasse 49 Street
social media trends 2011 CH-8005 Zuerich Zip Code

Switzerland Country
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+41(0)44 272 1876 Voice

+41(0)76 200 7778 Cell
info@CyTRAP.eu Google Talk
Urs E. Gattiker , Ph.D.
www.ComMetrics.com URL
2008_06_16

Compliance, governance and risk management - Web 2.0 challenge

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