Trust Digest 54 (June 24, 2014)


Building a Culture of Continuous Improvement in an Age of Disruption
Building an effective continuous improvement culture is not just about executing a handful of process improvement projects. That's a good place to start — and companies may reap tangible rewards from those projects. But more is required to drive sustainable results over time and embed continuous improvement into the very fabric of the organization. That's when the kind of real, transformational changes take place that can generate hundreds of millions of dollars of opportunities.
Key Words: Change Management, Continuous Improvement, Culture
Trust Issues: Capability, Sustainability


Justices, With Limits, Let E.P.A. Curb Power-Plant Gases
The Supreme Court on Monday handed President Obama’s Environmental Protection Agency a victory in its efforts to regulate greenhouse gas emissions from stationary sources like power plants. “E.P.A. is getting almost everything it wanted in this case,” Justice Antonin Scalia said in summarizing the decision from the bench. “It sought to regulate sources it said were responsible for 86 percent of all the greenhouse gases emitted from stationary sources nationwide. Under our holdings, E.P.A. will be able to regulate sources responsible for 83 percent of those emissions.”
Key Words: Supreme Court, EPA
Trust Issues: Regulation, Sustainability


SEC 'Pay-to-Play' Penalty for TL Ventures Could Signal More to Come in VC
The Securities and Exchange Commission for the first time has charged an investment adviser for violating three-year-old "pay-to-play" rules around political contributions, but the agency said it may not be the last. Pennsylvania-based TL Ventures agreed to pay a nearly $300,000 settlement to the agency for collecting management fees from several pension funds after an associate at the firm made campaign contributions to political candidates who have influence or potential influence over those funds, the agency said. It was the first such action since new pay-to-play regulations went into effect in 2011, the SEC said.
Key Words: Pay to Play, SEC, TL Ventures
Trust Issues: Integrity, Transparency, Accountability


Egypt Court Sentences Al Jazeera Journalists
Two Al Jazeera English journalists have been sentenced to seven years in jail and one to 10 years by an Egyptian court on charges including aiding the Muslim Brotherhood and reporting false news. The guilty verdicts were announced by a judge on Monday against Peter Greste, Mohamed Fahmy, and Baher Mohamed. Greste and Fahmy were sentenced to seven years in prison, while Baher Mohamed was sentenced to an additional three years for possession of ammunition. Mohamed was in possession of a spent bullet casing he had found on the ground during a protest.
Key Words: Egypt, Al Jazeera
Trust Issues: Communication, Transparency, Benevolence


How Congress Brought the Measles Back
In 2000, the Centers for Disease Control and Prevention made a stunning declaration: Measles — a disease that once infected 3 million to 4 million Americans each year, and killed 500 of them — had been eliminated in the United States. It was a victory decades in the making, the product of a highly effective vaccine and a strong public health system. But today, measles is back. Just this month, the CDC reported more cases in the country in the first six months of 2014 — 477 — than during that same period in any year since 1994.
Key Words: Congress, Vaccination, Measles
Trust Issues: Capability, Regulation


U.S. Supreme Court Reins in Shareholder Litigation, to a Degree
The U.S. Supreme issued a highly anticipated ruling today in Halliburton v. Erica P. John Fund, giving companies an early opportunity to challenge class-action securities lawsuits but declining to reverse a quarter-century-old ruling that encouraged investors to sue companies based on the "fraud of the market presumption."
Key Words: Supreme Court, Class Action, Fraud
Trust Issues: Accountability, Responsibility, Stakeholders


U.S. Steps Up Probes of Deals to Block Generic Drugs
U.S. regulators, armed with a year-old Supreme Court decision, are stepping up probes of pharmaceutical deals that delay the sale of generic drugs, arrangements they view as illegally hurting competition. The Federal Trade Commission has opened new investigations into agreements between generic and brand-name drugmakers that may lead the agency to sue for disgorgement of revenues, said Markus Meier, head of the agency’s health-care division. Companies under scrutiny include Forest Laboratories Inc. (FRX) and Endo International Plc (ENDP), according to regulatory filings this year.
Key Words: Pharmaceutical Companies, FTC, Competition
Trust Issues: Regulation, Transparency, Integrity


The Credit Suisse Case: Did the Justice Department Lose its Nerve?
With trumpets and fanfare, the Department of Justice announced the Credit Suisse guilty plea for criminal tax evasion. Puff pieces were circulating in the press announcing the $2.6 billion criminal fine paid by Credit Suisse. Negotiation details were leaked out about last minute brinkmanship resulting in the Attorney General’s rejection of Credit Suisse’s request to avoid a criminal plea. A closer look at the circumstances reveals that the Justice Department gave away most of its leverage in exchange for an empty “criminal” plea. It is hard to justify what the Justice Department did in this case, and I suspect in years to come, future Administrations will take a different tack.
Key Words: DOJ, Credit Suisse, Tax Evasion
Trust Issues: Capability, Accountability, Integrity


Corporate Governance: The Resurgent Activist
The US Chamber of Commerce calls it “minoritarianism, the tyranny of a minority”. Dan Gallagher of the Securities and Exchange Commission says annual meetings have been “hijacked” by “corporate gadflies”. Leo Strine, the chief justice of Delaware, where most big US companies are registered, says shareholder democracy has wrought a “constant ‘model UN’ where managers are repeatedly distracted by referendums on a variety of topics proposed by investors with trifling stakes”.
Key Words: Annual Meeting, Shareholder Democracy, Governance
Trust Issues: Transparency, Stakeholders, Alignment of Interests


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