Corporate Riordan Compliance Plan 1 Running head: RIORDAN CORPORATE COMPLIANCE PLAN
Riordan Corporate Compliance Plan Christopher Wall LAW/531 Bernard Cookson, Jr. University of Phoenix May 25, 2009
Riordan Corporate Compliance Plan 2 Date: May xx, 2009 Subject: Riordan Corporate Compliance Plan To: Riordan Executive Officers and Directors I. Organization Overview In 1991, after obtaining several patents from processing polymers into high tensile strength plastic substrates, Dr. Riordan founded Riordan Manufacturing (University of Phoenix, 2003). In 1993, Riordan Manufacturing, Inc expanded into the production of plastic beverage containers at the organizations first manufacturing plant in Albany, GA. Today, Riordan Manufacturing has custom plastic parts produced in Pontiac, Michigan and plastic fan parts in Hangzhou, China in addition to the Albany, GA plant. Riordans customers include automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufacturers (University of Phoenix, 2003). II. Corporate Compliance Overview Riordan Manufacturing has created a Corporate Compliance Plan customized to the organizations specialized field of plastic designs. Riordan is committed to managing and operating the organization programs with the utmost degree of business, ethical and moral principals. Employee expectations are to contribute to the business functions of the organization with integrity and ethical standards. Management contributes to achieve these standards by demonstrating leadership, integrity and being a role model to employees to promote an environment which compliance and ethical business practices are expected. Compliance is adhering to established standards that are set forth within the organization. The mission of the corporate compliance plan for Riordan is to insure awareness and compliance
Riordan Corporate Compliance Plan 3 with applicable laws, rules and regulations to the workforce, that include federal and state programs, fraud, waste and abuse, ethics, privacy and security requirements and corporate governance. The corporate compliance plan purpose is to detail the importance of internal controls and submit a proposal to minimize enterprise risks by applying the principles or recommendations of the Committee of Sponsoring Organization of the Treadway Commission (COSO). III. Code of Business Conduct and Ethics A. Overview The Code of Business Conduct and Ethics presents Riordan employees, directors, executive officers, and employees with the necessary information to adhere to the ethical expectation of the organization. Riordan is accountable for all laws and regulations related to the organizations business. B. Honesty and Integrity Honesty and Integrity is how Riordan defines the organizations relationship with all business transactions. Riordan is committed to maintaining corporate integrity through open, honest and fair transaction to insure the required trust is earned from the consumers that goods and services are provided too. C. Standards of Conduct Riordan Manufacturing expectations: 1. Business Principles a. Confidentiality of Riordan Records Riordan employees are responsible to insure the integrity and accountability protection of the organization business documents. All documentation is considered property of Riordan
Riordan Corporate Compliance Plan 4 Manufacturing and is considered confidential, unless provided by law or regulation. Riordan employees is responsible to report any violation of this policy of compromise of confidential information to his or her immediate supervisor. b. Unauthorized Use of Riordan Assets Employees of Riordan are required to protect the assets of the organization. Company assets include stationery products, office equipment, and property not for personal use (Community Services, 2007). Misuse of organization funds, information, equipment, or other assets can result in appropriate legal action. All employees are responsible to insure that the organization assets are used for official business and any misuse of the organization property is the employees responsibility to notify his or her immediate supervisor. c. The Corporate Image Employees are expected to conduct business transaction in a fair and honest manner with the companys customers, suppliers and competitors. There should be no deceitful business dealings taking place that would be an unfair advantage to the consumer by concealing or manipulating facts of the transaction. 2. Legal Obligations and Compliance a. Market Share Liability Also referred to as enterprise liability whereas Riordan Manufacturing parent organization is Riordan Industries can be held jointly liable for action on the basis on being a part of a shared enterprise. b. Product liability
Riordan Corporate Compliance Plan 5 Riordan Manufacturing will insure products is free from design and manufacturing defect and each product provide the necessary warranty and consumer protection requirements as determine by state or federal guidelines. c. International Law Riordan Manufacturing will adhere to the rules and principles of the host country that business is conducted in accordance with the International Law and laws of the land. IV. Enterprise Risk Management Enterprise risk management is an approach to assist management to identify and manage uncertainties to obtain positive risk objectives. The ERM framework focuses on the development of a strategy that contains the importance of a risk and internal control consciousness throughout the organization. COSCO intended this framework to be an effective tool for keeping executive officers and directors informed about the organizational procedures and processes and assists to respond to uncertainties that will assist management to measure how the organization is managing its own risks (Applegate, 1999). V. Prevention Management The COSCO enterprise risk management structure recognizes an organization to connect risk management into strategic objectives and organizational culture. To protect against the event of a risk situation, all layers of Riordan must determine how its actions will respond and protect the organization. Organizations that fail to comply with local, state or federal governmental regulations will exposed the organization to regulatory risks that will impact the organization existing assets, earnings, and most often the reputation in the media. Organization preventive measures provide the internal controls of the day to day business operations that reduce, limit and eliminate the organizations exposure to tort liability, fines and criminal penalties (Limtiaco,
Riordan Corporate Compliance Plan 6 2009). With this in mind, Riordan Executives and Directors will take the necessary steps to implement ERM to include: development of an organization strategy to include risk management; determination of corporate philosophy and the delegation of risk controls; performance of risk assessments and determining how much risk Riordan is willing to undertake to generate value; identifying risk responses, communicating and analyzing risk results; and continued review and oversight to ensure compliance from management (Applegate, 1999). What this means is that Executives and Directors of Riordan Manufacturing must overlap their interests and align corporate governance with risk management. 1. Clean Air and Water Act a. Plastics are so varied and are used in so many industries and types of products; they are affected by many regulations across the world (Murner, 2009). Riordan manufacturing plants located within the United States and in China is susceptible to review. All inquires must be directed to through the Corporate Compliance Officer to the Chief Legal Counsel for further guidance. b. Riordan responsibility is to insure full compliance of the Clean Air and Water Act by responding immediately to violation(s) addressed and monitor progress of the violation to insure no future violations. c. The responsible Director must review, update and follow-up on the issue to insure full compliance of the law to prevent repeat findings or negative public media attention that may reflect on the organization. 2. Occupational Safety and Health Administration a. Compliance of OSHA regulations will reduce work-related injuries, illnesses and death through proper annual workplace safety inspection and review.
Riordan Compliance Corporate Plan 7 b. Reported violations must be addressed immediately by the responsible management official by taking appropriate action to insure the safety and health of the employees and insure the findings are corrected. c. OSHA information is required to be posted on all employee bulletin boards to be available for all employees to access and provide information concerning the workplace and his or her rights under OSHA. 3. Disputes a. Disputes can arise from employer-employee or the organization and the consumer concerning his or her differences that cannot be resolved. b. ADR or arbitration dispute resolution provides the parties an opportunity to resolve his or her issue to minimize the possibility of litigation. Mediation is another option or a peer review, if the dispute is with the employer and employee. c. Employees can contact the human resource manager for further direction if the dispute cannot be resolved within the employee immediate supervisor or second-line supervisor. d. Consumer disputes will be resolved through the Product Support Division and elevated through the appropriate chain of command to the Chief Legal Counsel for final review. The course of action will be to minimize the impact of the dispute to the lowest level and resolve the consumer dispute with little financial hardship as necessary. 4. Federal Trade Commission Act a. Riordan is committed to providing accurate information on all products sold to a consumer that meets with state and federal guidelines. b. All products carry an express warranty for the quality, abilities, or performance of the product as provided in the Uniform Commercial Code (Jennings, 2006).
Riordan Corporate Compliance Plan 8 c. Executive management must insure full compliance of the act to avoid any product liability issues and reduce the possibility of negligence, intentional tort or strict tort liability. d. Report any legal actions through the Corporate Compliance Officer to the Chief Legal Counsel who overseas all legal matters for Riordan Manufacturing. 5. Intellectual Property Rights a. Intellectual property consists of Riordan Manufacturing trademarks, copyrights, patents, and trade secrets. b. Trademarks are defined under the Lanham Act of 1976 and are defined as a word, name, symbol or other designation that is representative of the organization from others (Jennings, 2006). c. Trademark or patent infringement is likely to occur abroad, presumably in China where our manufacturing plant is operating. The VP International Operations and Director Plan Operations management must be aware of the competitors in the area to alert Senior Executives of potential competitors infringement of Riordan Manufacturing. Report any instances of intellectual property violations to the Chief Legal Counsel for further review. Executive management will review the case and proceed with appropriate direction. 6. Management and Control a. Riordan Manufacturing is a profit corporation with unlimited duration, free transferability of interest, limited liability for shareholders/owners, continuity, and centralized management (Jennings, 2006). b. In accordance with the Model Business Corporation Act, Riordan Manufacturing will abide by the principles of corporate law within the states where Riordan Manufacturing plants are established.
Riordan Corporate Compliance Plan 9 c. Riordan Manufacturing will comply with the state and federal guidelines as established for the organization. 7. Corporate Governance a. Riordan Executive Managers and Directors are involved with the responsibility to insure compliance with the organization strategy, policies and guidelines and accountability to the stakeholders in the organization. b. Issues requiring corporate governance principles include: Internal controls, oversight and management of risk, oversight of the entitys financial statements, and review of the compensation arrangements for the CEO and other executives. c. 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. d. 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. VI. Compliance Officer The Corporate Compliance Officer will be responsible to oversee and direct the Compliance Plan. The Corporate Compliance Officer will report to the President/CEO and Chief Operating Officer. The Corporate Compliance Officer is responsible to report significant and pertinent information through the appropriate executive channels for review and final resolution. VII. Reporting Suspected or Known Violations All Riordan Manufacturers employees are responsible to report immediately any infringement of the Code of Business Conduct and Ethics. Riordans Corporate Compliance Plan is developed to allow the employee the opportunity and responsibility to report any activity by
Riordan Corporate Compliance Plan 10 division representative that convincingly show to go against applicable laws, regulations, and policy or Corporate Compliance requirements. Notice concerning possible litigation against Riordan or alleged violations of law by Riordan is required to report to the senior leadership. Riordan encourages employees to share his or her questions, complaints, suggestions or recommendations to the organizational leaders within the division. VIII. Investigations and Corrective Action Any and all alleged violations are to be investigated immediately or the Corporate Compliance Officer will administer the action to be taken. Investigations will be treated in confidence to the level that is consistent with Riordan interests and legal requirement (Community Services, 2007). Suspected violations will be investigated and documented for submission to the President/CEO and Chief Operating Officer for review (Community Services, 2007). If the investigation indicates from the results that corrective action is required, Riordan will make a decision on a suitable course of action to acquire, to include: discipline, dismissal and possible lawful measures. The investigation may require an outside source to assist in the inquiry of the inquisition, if deemed necessary. IX. Conclusion The recommendations by COSO provide a comprehensive framework for Riordan to develop an effective ERM program with strong internal controls to maintain compliance and establish adequate checks and balances. Riordan Manufacturing will take a proactive approach in Corporate Compliance by acquiring the enterprise risk management approach not only to comply with state and federal mandates but to insure Riordan establish measures and internal controls to prevent, identify, and management risks, exposures and incidents. Being a productive and responsible organization will reflect a positive image to the public that will bring credit to the
Riordan Corporate Compliance Plan 11 contribution of the goods and services provided by the organization as a whole (Limtiaco, 2009). The continued commitment and dedication of the senior executives are necessary for the success of the corporate compliance plan.
Riordan Corporate Compliance Plan 12 References Applegate, Dennis. (1999). Struggling to incorporate the COSO recommendations into your audit process? Here's one audit shop's winning strategy... COSO. Retrieved May 23, 2009, from http://www.coso.org/audit_shop.htm Community Services (2007). Corporate Compliance Plan. Retrieved May 23, 2009, from http://www.csdd.info/ Institute of Business Ethics (2003). Developing a code of business ethics. Retrieved May 23, 2009, from http://www.ibe.org.uk/developingsumm.htm Jennings, M.M., (2006). Business its legal, ethical, and global environment. Managing disputes. Available from the University of Phoenix eBook Collection database. Murner, Christine. (2009). Plastics, Electronics and the Environment: How New Global Regulations Affect Materials Choices. Plastics Technology. Retrieved May 23, 2009, from http://www.ptonline.com/articles/200610fa2.html University of Phoenix. (2003). Riordan Manufacturing [Computer Software]. Retrieved May 23, 2009, from University of Phoenix, Simulation, Law531-Business Law.