Trust Digest 51 (June 3, 2014) 

     

Unveiling New Carbon Plan, E.P.A. Focuses on Flexibility
The Obama administration on Monday announced one of the strongest actions ever taken by the United States government to fight climate change, a proposed Environmental Protection Agency regulation to cut carbon pollution from the nation’s power plants 30 percent from 2005 levels by 2030.
Key Words: EPA, Emissions, Climate Change
Trust Issues: Sustainability, Responsibility, Regulation


Health-Care Fraud in America: That’s Where the Money Is
MEDICAL science is hazy about many things, but doctors agree that if a patient is losing pints of blood all over the carpet, it is a good idea to stanch his wounds. The same is true of a health-care system. If crooks are bleeding it of vast quantities of cash, it is time to tighten the safeguards.
Key Words: Health Care, Embezzlement
Trust Issues: Integrity, Responsibility


GlaxoSmithKline is Facing More Than Double Jeopardy
GlaxoSmithKline’s problems are multiplying fast. In China authorities have identified 46 individuals connected to the company they claim were involved in “massive and systemic bribery”. In the UK the Serious Fraud Office (SFO) marked out its pitch this week, revealing it has opened an official investigation into allegations of bribery; and an internal GSK probe is looking at potential wrongdoing in Jordan and Lebanon.
Key Words: Corruption, GSK
Trust Issues: Integrity, Accountability


Capitalism for Everyone or No One                       
The Inclusive Capitalism movement is one of a number of laudatory initiatives in response to the “serious dislocations caused by developments in the capitalism of the last 30 years” (for more, see www.inclusivecapitalism.org), including increases in income inequality, financial scandals, historically high unemployment, and short-term approaches to managing companies. The conference’s central question revolves around the growing recognition that the free enterprise system does not operate in a vacuum, and that it thus must be animated by a conscious regard for all its present and future stakeholders.
Key Words: Inclusive Capitalism
Trust Issues: Sustainability, Benevolence


Mark Carney Slams 'Market Fundamentalism' At Inclusive Capitalism Conference
Free-market “radicalism” has taken control of the world’s economies, spurring greater inequality and threatening the legitimacy of capitalism itself, Bank of England Governor Mark Carney warned this week. The former Bank of Canada governor told an audience at the Conference on Inclusive Capitalism that the world’s business leaders and policymakers need to rebuild the “social capital” on which capitalism is based, by ending the phenomenon of “too big to fail,” reforming CEO pay, strengthening financial market oversight and “building a sense of vocation and responsibility.”
Key Words: Inclusive Capitalism, Mark Carney
Trust Issues: Responsibility, Sustainability, Stakeholders


Message to President Clinton, Prince Charles and Mark Carney: People Don't Trust Leaders Who Say 'Trust Me'
Business isn’t trusted anymore. After mis-selling scandals, the Libor-fixing racket and wayward lending in the boom that led to the financial crisis, trust in banks and bankers seems at or near all-time lows. Food producers and retailers are distrusted over contamination scares, industry is suspected of carbon emissions and other environmental crimes and the brave young world of technology too is tarnished by privacy and data security scares that threaten to restrict its ambitions to hold and transact ever more valuable information in the age of big data. In pretty much every sector, consumer and business trust equals some sort of licence to operate. So what are companies to do when such a licence has been abandoned or mislaid? Time to send in the ‘A’ Team?
Key Words: Inclusive Capitalism
Trust Issues: Reputation, Sustainability, Integrity


Why Food, Apparel, Banks, Energy & Technology Face Significant Reputation Threats in 2014-2015
Companies in four sectors – banks, food and beverage, apparel, and technology brands – are among the most at-risk for reputation damage from stakeholder activism in 2014, based on Future 500’s analysis of top stakeholder issues for 2014-2015. One key driver of risk is the extraordinary growth of social media in recent years. Until recently, details about a company’s social and environmental performance were rarely known beyond a small circle of activists. Now, those impacts can be quickly conveyed to thousands or millions using digital vehicles like Facebook and Change.org.
Key Words: Social Media, Activism
Trust Issues: Reputation, Communication, Transparency


How the VA Developed its Culture of Coverups
About two years ago, Brian Turner took a job as a scheduling clerk at a Veterans Affairs health clinic in Austin. A few weeks later, he said, a supervisor came by to instruct him how to cook the books. “The first time I heard it was actually at my desk. They said, ‘You gotta zero out the date. The wait time has to be zeroed out,’ ” Turner recalled in a phone interview. He said “zeroing out” was a trick to fool the VA’s own accountability system, which the bosses up in Washington used to monitor how long patients waited to see the doctor.
Key Words: Eric Shinseki, Veterans’ Affairs
Trust Issues: Accountability, Competence, Transparency


13 Deaths, Untold Heartache, From G.M. Defect
For most of the last decade, Candice Anderson has carried unspeakable guilt over the death of her boyfriend. He was killed in 2004 in a car accident here, and she was at the wheel. At one point, Ms. Anderson, who had a trace of Xanax in her blood, even faced a manslaughter charge. She was 21. “It’s torn me up,” Ms. Anderson said of the death of Gene Mikale Erickson. “I’ve always wondered, was it really my fault?” Last week, she learned it was not. Mr. Erickson, 25, was one of the 13 victims whose deaths General Motors has linked to an ignition switch defect that can cause a loss of power in cars, according to an email that Mr. Erickson’s mother, Rhonda, received from the National Highway Traffic Safety Administration.
Key Words: GM, Auto Defects
Trust Issues: Transparency, Benevolence, Accountability


US Investors Should Beware Chinese IPOs
What is happening to investors’ risk appetite? The continuing downward pressure on US Treasury bond yields indicates a degree of caution in the air. For their part equity investors have been retreating into size and quality. There has also been a global sell-off in technology stocks after a period in which demand in the IPO market for shares in companies that made no money knew no bounds.
Key Words: China, Risk, Technology
Trust Issues: Competence, Governance


Behind Major US Case Against Shareholder Suits, a Tale of Two Professors
For two months last summer, Stanford Law School professor Joseph Grundfest locked himself away in his home office in California's Portola Valley. When he emerged in August, Grundfest - an influential former Commissioner at the U.S. Securities and Exchange Commission who now sits on the board of the private equity firm KKR & Co - had in hand a 78-page paper larded with more than 400 footnotes. His aim was nothing less than to destroy securities fraud class action lawsuits by shareholders, which have been the bane of many businesses in the U.S. since the Supreme Court endorsed the cases 26 years ago.
Key Words: Supreme Court, Securities Fraud
Trust Issues: Integrity, Transparency, Accountability


PwC Creates the Most Sustainable Building in the World
The UK's first "air rights" building – constructed on top of an existing structure – 1 Embankment Place was built over Charing Cross Station in the early 1990s. This 40,000 sq ft (3,716 sq m) floor space has since been occupied by PwC, whose office is on the ground floor below the busy station and floors one to nine above. After receiving the UK's first BREEAM Outstanding award for its new-build riverside offices near Tower Bridge, the company had a decision to make: with just four years to run on the lease, should it replace its leaky old building further upstream with a more sustainable new-build?
Key Words: PwC, Green Architecture
Trust Issues: Sustainability, Stakeholders


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