Trust Digest 57 (July 17, 2014)


Why GM's Ignition Defects Couldn't `Have Happened To Anyone’
It can happen to anybody. Those words jumped out at me from James Stewart’s New York Times business column Saturday. Stewart was writing about how General Motors [GM -0.03%] has successfully reinvented the Buick line, which has shined despite the black eye GM has received for recalling millions of cars for faulty ignition switches that led to accidents and fatalities.
Key Words: GM, Culture
Trust Issues: Accountability, Integrity, Responsibility


How Seriously Does Your Nonprofit Board Take the Matter of Ethics?
Most board members are aware of their obligation to ensure their nonprofit's compliance with certain standard regulations e.g. making tax payments, submitting IRS Form 990s and/or avoiding potential fraud. But what I have found missing in the nonprofit environment is a sense of director responsibility to provide for and sustain a viable ethics program.
Key Words: Nonprofits, Corporate Governance
Trust Issues: Ethics, Responsibility


Afghan Presidential Candidates Agree Vote Audit
Afghanistan's two presidential election candidates have agreed to an audit in an attempt to resolve a dispute over the result of last month's vote, US Secretary of State John Kerry has said. Both contenders, Abdullah Abdullah and Ashraf Ghani, have agreed to abide by the result. The review of all 8m ballots would begin within 24 hours, Mr Kerry said. Preliminary results suggest Mr Ghani has won, but both candidate accuse the other of electoral fraud.
Key Words: Afghanistan election
Trust Issues: Transparency, Integrity


SEC Charges Ernst & Young With Violating Auditor Independence Rules in Lobbying Activities
The Securities and Exchange Commission today charged Ernst & Young LLP with violations of auditor independence rules that require firms to maintain their objectivity and impartiality with clients. Ernst & Young agreed to pay more than $4 million to settle the charges.
Key Words: EY, SEC action
Trust Issues: Capability, Integrity, Transparency


Is the U.S. as Corrupt as the Third World?
Last week former New Orleans Mayor Ray Nagin became the latest American politician to be sent to jail for abuse of power, following in the footsteps of former Detroit Mayor Kwame Kilpatrick and onetime Illinois Congressman Jesse Jackson Jr. Despite such high-profile convictions, most Americans see political corruption as a problem that plagues the developing world far more than the U.S. The truth is more complex: It’s certainly the case that paying bribes is a lot less common in the U.S. than in Nigeria or Bolivia, for example. But when citizens are asked if corruption is prevalent in their country, they’re thinking about a lot more than bribes. They’re more concerned about whether government and the political system is fair or stacked against them. And on those grounds, there are good reasons to think the difference between the U.S. and developing countries isn’t very big at all.
Key Words: Corruption, Nagin
Trust Issues: Integrity, Transparency, Benevolence


The Trouble With Too Much Board Oversight
The high-profile scandals of the late 1990s have transformed the corporate governance landscape. One of the most notable effects has been increased oversight duties of independent directors. For example, in the United States, under the Sarbanes-Oxley Act of 2002, a public company’s audit committee is now responsible for appointing, compensating and overseeing the work of the external auditors as well as maintaining procedures for whistle-blower protection. The committee itself must be made up entirely of independent directors. Moreover, under rules set by the U.S. stock exchanges, independent directors are supposed to have similar sway over compensation and nominating committees.
Key Words: Corporate Governance, Oversight
Trust Issues: Accountability, Integrity


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