Riordan Manufacturing - Essay Example

RIORDAN MANUFACTURING 2009 Corporate Compliance Plan Effective January 2009 TABLE OF CONTENTS I INTRODUCTION II COMPLIANCE PROGRAM A COMPLIANCE OFFICER III ALTERNATIVE DISPUTE RESOLUTION (ADR) IV CORPORATE CRIMES AND LIABILITIES OF OFFICERS AND DIRECTORS A FRAUD B REGULATORY OFFENSES Internal Revenue Code Sherman Act Sarbanes-Oxley Act of 2002 Securities and Exchange Act of 1934 C ENVIRONMENTAL OFFENSES Clean Air Act Clean Water Act. D OTHER BUSINESS CRIMES Extortion, Bribery Theft, Embezzlement V TANGIBLE AND INTELLECTUAL PROPERTY VI THE NATURE OF THE LEGAL PERSONALITY OF RIORDAN MANUFACTURING VIII CONCLUSION I INTRODUCTION The RIORDAN MANUFACTURING, engaged in the manufacture of global plastics and wholly owned by Riordan Industries, a Fortune 500 enterprise, is committed to the promotion of an organizational structure that stringently follows corporate ethical and legal standards. With this in mind, the company developed this Corporate Compliance Plan to set a standard and provide a guideline to overall corporate conduct to prevent instances of infringement of the corporate norm of sound ethical standards and violation of state and federal laws relative to corporate practices; to detect such infringement and violation, and; to correct corporate conduct in the event of such infringement and violation. This Corporate Compliance Plan version is particularly developed for the officers and directors of Riordan Manufacturing to make them aware of the existence of laws that regulate certain acts and that violation thereof not only exposes the company to fines and penalties but makes them liable for fines and/or imprisonment as well. In addition, any violation of these laws will also merit them severe sanction by the company like termination, depending on the severity of the act. This Compliance Plan also reminds the officers and directors that it is the company policy to abide by the laws of the land. II COMPLIANCE PROGRAM A Compliance Officer (CO) A Compliance Officer is designated by the company for the purpose of ensuring that all the provisions of this Compliance Plan are implemented and supervised efficiently and rigorously. The Compliance Officer shall have the following duties and functions: Periodically review the efficacy and efficiency of this Compliance Plan and proposes changes, amendments and new measures that will enhance, improve and ensure that Riordan Manufacturing maintains corporate policies that are ethically and legally sound and correct; Familiarize himself with all the laws - local, state, federal and international - and ethical practices pertinent to the Plan and the conduct of business; Apprise the officers and directors of the company of the existence of this Compliance Plan and ensure that they understand the terms and provisions thereof; Accept complaints from internal and external sources regarding the conduct of any officer or director that violate common ethical and legal practices; Investigate the veracity of such complaints; Conduct appropriate hearing, formal or informal, and assess the extent and severity of such violation or infringement; Report periodically to senior management and the Board of Directors as to the status of any pending complaints and investigations, and any other non-compliance by directors or officers of the company; To perform such other duties necessary and relevant to the implementation and supervision of the Compliance Plan and for such purpose, engage the aid of subordinates, if necessary, to facilitate such implementation and supervision. III ALTERNATIVE DISPUTE RESOLUTION (ADR) An ALTERNATIVE DISPUTE RESOLUTION is any means of settling differences extra-judicially – that is without or before resorting to court actions. The term can include within its ambit anything and everything that seeks to settle conflicts between parties like negotiation, mediation, conciliation, arbitration or even mini-trials approximating that of formal judicial court trials. In the hope of resolving intra-agency and inter-agency between and among officers or directors of Riordan Manufacturing quietly, amicably and without resorting to full-blown, adversarial judicial actions, this Compliance Plan hereby establishes an in-house Corporate ADR Program. The following steps will be forthwith undertaken by the company to ensure that an effective, efficient and working in-house Corporate ADR Program will be implemented in the next months or so: All management officers of Riordan Manufacturing will undergo an extensive conflict resolution training beginning from the upper level management to middle and finally the lower level management where they will be taught the basic tools of resolving conflicts; An in-house mediation program will then be established initially by a careful selection of company employees taken from every employee and management level on the basis of the employee and manager good records; Such carefully chosen company people will then serve on a confidential basis and as neutral parties for every mediation or conciliation proceeding for any employee(s) or officer(s) engaged in a conflict with another Riordan employee or officer or with the company itself; In the event that the in-house ADR Committee fails to settle a dispute, the case will be referred to Lowell Bradford, Chief Legal Counsel of Riordan Manufacturing for legal advice. IV CORPORATE CRIMES AND LIABILITY OF OFFICERS/DIRECTORS A FRAUD Riordan Manufacturing is aware that many companies – Enron, WorldCom, Adelphia - in the past have fallen on charges of fraud instigated by their officers and directors and Riordan is committed to ensuring that its own officers and directors strictly comply with laws regarding fraud and refrain from resorting to and involving in fraudulent acts including but not limited to filing of false tax returns, fraudulent schemes designed to defraud the government, the company, investors and shareholders of money and income owing to them. It is the policy of the company that its officers and directors refrain from engaging in acts that are fraudulent which can impose the company to criminal and civil sanctions and is ready to impose the harshest measures against any officer or director that will attempt to engage in such acts. B REGULATORY OFFENSES Regulatory offenses, which are the third most prosecuted corporate crimes in the US today, after fraud and extortion and bribery, are those acts which are designated as crimes simply because statutes have so classified them and therefore do not require proof of the element of mens rea. Riordan Manufacturing is likewise committed that its officers and directors are aware that certain corporate acts are punishable by law and that they and the company are liable for the violation of laws prohibiting them: Internal Revenue Code, 26 USC 7201. This law prohibits tax evasion or any deliberate acts which have the purpose to escape the payment of local, state or federal taxes, the violation thereof which carries a maximum fine of $500,000 for corporations and jail terms for the officers involved in it. It has always been the company policy of Riordan Manufacturing, and will always be, to honestly make a full and honest disclosure of all assets, liabilities, income and losses and let it reflect on all its corporate tax returns. Falsifying records is not sanctioned and tolerated by the company and any employee or officer of the Riordan who engages in the falsification of company records and data shall face loss of employment or criminal and civil prosecution. It is a violation of company rules, in addition to it being against the law, for any officer or director of Riordan to personally engage in, influence, or coerce an employee to fraudulently enter incorrect or misleading data into company records. Riordan has likewise engaged the services of competent external auditing firm whose reputation in the industry is solid and untarnished to ensure that company records, books and accounts are well-kept and accurately reflect the true financial state of the company. Sherman Act. The officers and directors of Riordan Manufacturing are likewise prohibited from engaging in any act, combination of trade or conspiracy which has the effect of restraining trade and commerce because the same is punishable under the Sherman Act and carries with it the penalties of fine, divestiture and injunctions not only for such officers and directors but for the company as well. Sarbanes-Oxley Act of 2002, 15 USC §512. Otherwise known as the Public Company Accounting Reform and Investor Protection Act, the law was enacted in response to the corporate scandals which have emerged in early 2000. Violation of this law includes vital document destruction to conceal fraudulent acts, concealment, alteration, mutilation of documents during pending civil or criminal investigation, among others. It likewise carries penalties of fines and imprisonment as well as the forfeiture by corporate officers of any gain acquired on account of the falsified statements. Riordan Manufacturing is committed to keeping all its records accurate and true and all its employees and officers are enjoined to observe strict compliance with this company rule, and any hint of deviation from this particular company rule will earn the full-force company sanction. Securities and Exchange Act of 1934. All officers and directors of Riordan are strictly prohibited from disclosing information regarding the company that has not yet been disclosed to the public as the same will violate the Securities and Exchange Act of 1934, which regulates the secondary trading of stocks, debentures and bonds after the initial issuance of securities to a primary market and which, secondary trades are often done by persons unrelated to the original issuers. Officers and directors are likewise prohibited, under the same law, to buy, sell and trade stocks of Riordan or stocks of other publicly-traded securities until data, known only to the company and are relevant to decision-making in the trade of such stocks, because the same are within the ambit of ‘insider-trading’, which violates the Securities and Exchange rules and regulations. The data or information referred to are those which if known to others would alter or affect the stock price of Riordan Manufacturing. C ENVIRONMENTAL OFFENSES. Clean Air Act. Riordan is intent on keeping its share of making the environment a clean place to live in. In this respect, the company is strictly imposing measures to keep all its plants utilize to the newest state-of- the-art machinery that conform to the latest federal requirements of toxic emissions in keeping with the Clean Air Act, the environmental law that regulates and pertains to the emission of gases and other pollutants into the earth’s atmosphere which imposes a penalty of a hefty $1,000,000 and imprisonment. All officers and employees of the company are therefore enjoined to abide with the enforcement of all measures to ensure that all plants of the company operate within the ambit of this particular law. Clean Water Act. Likewise, the company is painstakingly taking all measures that it does not become a contributor to water pollution that endangers the lives not only of ocean and sea life but of human life as well. Towards this end, the company, together with its officers and directors, have imposed measures that will diminish if not totally eliminate the release of its plants of toxic substances that can jeopardize the lives of living things on the planet. This is in keeping with the US federal law Clean Water Act which regulates the releases of toxic substances into water surfaces, the violation of which can result in a penalty that starts at $10,000 a day and/or imprisonment. All employees and management are therefore strictly mandated to observe company rules and policies for the safe release of toxic substances outside its plant sites. Occupational Health Safety Act. The officers and directors of Riordan are enjoined to take note of the Occupational Health Safety Act which regulates the safety, sanitary and healthy conditions of workers and workplaces and strictly comply with the provisions of the said law. Company policies regarding the strict observance of safety measures to ensure the protection of workers from dangers of workplaces especially at plant sites must be strictly obeyed, bearing in mind that the health, safety and protection of workers in workplaces are of paramount importance. In plant sites, for example, where machinery, equipment and appliances can pose hazard to human life, management and other employees concerned are strictly mandated to impose safety measures and precautions, like periodic assessment and inspection of these machineries, impose the use of precautionary gadgets and equipment in hazardous areas and impose disciplinary actions against employees who violate these measures. D PRODUCT LIABILITY Consumer Product Safety Act. Since Riordan Manufacturing is involved with the manufacture of global plastics, the Consumer Product Safety Act is one of the laws that the company is acutely aware of and therefore painstakingly makes sure that all its products are not made of substandard materials and do not pose hazard to the consumers in general. Enacted in 1972, this law regulates the manufacture of products which may pose risk to the consumers in general. It gives the appropriate US agency the right to ban a product from the market if it poses health hazards to the consuming public. Penalties for violation of this Act can fetch as much as $500,000 of tampering is involves and/or imprisonment. All company officers and directors are not spared in the event that the company is prosecuted for violation of this law and are therefore enjoined to ensure that the company E OTHER BUSINESS CRIMES. Extortion, Bribery. The officers and directors are likewise strictly prohibited from engaging in acts that would amount to extortion and bribery for the purpose of acquiring advantages over other competitors in the business arena, to prevent harassment or embarrassment of the company, and to gain the influence of certain political parties or figures anticipating that they could provide help in the future to enact laws or act favorably to company positions. Such acts as illegal political contributions, domestic commercial bribery and foreign pay-offs have, in the past, hounded and tarnished the corporate image of many firms. It is the policy of Riordan Manufacturing to completely disengage itself from political parties and figures, abide by all the laws of the land and run the company on a strictly business and legal basis only. It therefore expects all its officers and directors to follow the same, the violation of which will be completely sanctioned by the company. Theft, Embezzlement. Theft and embezzlement are two crimes against the company, which if committed by any officer or director of the company, will merit disassociation from it, in addition to criminal and civil prosecution. VII TANGIBLE AND INTELLECTUAL PROPERTY For the information of all officers and directors, it is herewith define and distinguish the meaning of tangible and intellectual property. Tangible property in reference to corporate property, includes assets of the company that are perceptible, possess form and to a certain extent, have a degree of physicality. Examples of these are plant machineries, equipment, appliances as well as the different office machines and apparatuses. On the other hand, intellectual property as opposed to corporate tangible property assets, are those which are not possess of any physical form but are nevertheless of value to the company. Examples are corporate trademarks and trade names. IX THE NATURE OF THE LEGAL PERSONALITY OF RIORDAN MANUFACTURING Riordan Manufacturing is a multinational for-profit corporation incorporated in accordance with the Model Business Corporation Act of the USA, where its main office is located. As a corporation, it has a personality distinct and separate from that of its officers, directors and shareholders. However, this corporate veil will not act to shield officers and directors who acted either deliberately or negligently in violation of a law. In such a case, the officers and directors will be subject to penalties, fines or worse, imprisonment. XI CONCLUSION Any report of violation of this Compliance shall be made to the Compliance Officer designated by the company, who shall forthwith pursue an investigation as to the veracity of the report. If true, the CO shall decide whether to pursue further hearings or refer the same to the in-house ADR, depending on the nature of the offense committed. All of the steps taken by the CO however shall be written in detail in a CO log and shall be reported to a senior officer designated and to the Board of Directors. However, any significant violation of existing laws shall be forthwith reported to proper authorities. Read More