Trust Digest November 24, 2012


Stanford accountants guilty of hiding fraud

Two former accounting executives were convicted Monday of helping Houston financier R. Allen Stanford hide a Ponzi scheme that bilked investors of $7 billion at Antigua-based Stanford International Bank Ltd. “They knew the bank was doing one thing and promising investors another, and they helped hide it,” prosecutor Jason Varnado told jurors during closing arguments last week.

Key Words: Fraud, Organizational Processes, Integrity
Trust Issues: System Trust, Weak Controls

 

Remaining with a vendor out of loyalty despite continued disappointments: My Biggest Mistake

Loyalty can be as important in business as it is in friendships and other personal relationships. But when things change -- one business grows faster than the other -- loyalty starts feeling more like a stranglehold. My biggest mistake was remaining with a primary vendor out of loyalty and expecting different results after continued disappointments.

Key Words: Loyalty, Trust

Trust issue: When does a lack of competence require us to choose trust over loyalty?


New corruption scandal rocks Brazilian government

Brazilian President Dilma Rousseff, moving quickly to nip a new scandal in the bud, ordered the

dismissal on Saturday of government officials allegedly involved in a bribery ring, including the

country’s deputy attorney general.

Key Words: Leadership, Reputation, Management, Whistleblowers

Trust issue:  A government’s trust increases when it proactively works to neutralize scandal.

 

Wal-Mart suspends India staff in corruption probe

Wal-Mart’s Indian joint venture said Friday that it had suspended several employees as part of an internal corruption investigation, another blow to the U.S. company’s plans for aggressive expansion in a giant market that is largely untapped by foreign retailers.

Key Words: Foreign Corrupt Practices, Trust across Cultures

Trust Issues: When pressures for growth cause trust violations, how to sustain trust when operating in global markets

 

Former Russian Defense Ministry official charged with fraud

A former bureaucrat was charged with fraud on Friday in a $100 million embezzlement case that

has cost the defense minister his job and shone a spotlight on corruption in President Vladimir Putin’s administration.

Key Words: Corruption, Government, Global Issues

Trust Issues: Corruption Reduces Trust and Perceived Legitimacy of Government, Integrity Violations in Leadership,
Power and Corruption


Bank seeks women to rebuild its reputation

Deutsche Bank is on the lookout for mature, tech-savvy women who it thinks will be better team

players to help change its corporate culture and rebuild its reputation after the financial crisis. “You could say having trustworthy bankers is enough to rebuild trust in the banking industry,” said Stephan Leithner, the head of human resources and compliance at Germany’s flagship lender. “It is not enough. In future, you need to have other qualities. “Let me be provocative: the banker of the future will be more female, more international, older, more team oriented and more mobile, and needs to enjoy working with technology,” Mr. Leithner told a seminar for young high-potential bankers in Frankfurt this week.

Key Words: Gender and Trust, Leadership, Financial Services

Trust Issue: Developing Trustworthy Leaders


Advertising a booming business despite economic crisis

Millions of euros are spent on public relations and marketing in Kosovo -- particularly by political parties -- and experts and citizens question the effectiveness and transparency of these high-cost efforts. Parties spent more than 3 million euros during the 2010 general election. Prime Minister Hashim Thaci’s Democratic Party spent 1.04 million euros. “The parties always spend a lot, they have donors, there are people, businessmen, who are connected to them and feed them,” said Pristina resident Arta Begu. “Political parties do not feel the crisis, people do.” Issues of transparency in marketing aren’t limited to politics.

Key Words: Transparency, Appearing Trustworthy, Media

Trust Issue: The Difference Between being Trustworthy and Appearing Trustworthy

 

Century Bank officers sued by feds for negligence

The Federal Deposit Insurance Corp. has sued the former CEO and directors of the failed Century Bank of Sarasota, accusing them of gross negligence in the bank’s $357 million demise. This lawsuit marks the first “professional liability” litigation filed by regulators against officers and directors of one of Southwest Florida’s nine community banks that failed during the recession.

Key Words: Negligence, Professional Liability, Fraud, Organizational Process

Trust Issues: System Trust, Integrity


Dealpolitik: BP’s SEC settlement over Deepwater Horizon is lesson in crisis management

BP is paying a $525 million penalty to the SEC to settle allegations that the statements BP made in the midst of the crisis on the magnitude of the 2010 Deepwater Horizon oil spill disaster were fraudulent. There are lessons from BP’s story on how to handle the uncertainty of estimates in a crisis.

Key Words: SEC Penalties, Corporate Communications

Trust Issues: Strategic Crisis Communications, Transparency, Rebuilding Trust


South Korea urged to restore trust in nuclear power

South Korea needs to rebuild public trust in nuclear power by boosting transparency and improving regulation, the International Energy Agency (IEA) said on Friday, after safety scares have closed reactors and threaten to trigger blackouts over winter.

Key Words: Trust in Government

Trust Issues: Rebuilding Public Trust


The cost of pipeline secrecy is distrust

Transparency and openness should be the price of doing business for controversy-causing enterprises such as oil pipelines. There is nothing positive in the unnecessary and inflammatory threat undefined and, make no mistake, it is a threat undefined of violence by Six Nations activists if Enbridge Pipelines proceeds with its plan to pipe western-Canada-produced raw oil product through Flamborough. But the company does itself no favours by keeping a lid of secrecy on its “integrity digs” undefined pipeline safety and condition checks undefined along its major pipelines, including Line 9 that passes through the hamlet of Westover in Flamborough. The company says the documentation contains proprietary information and the reports are not available for public viewing.

Key Words: Safety and Secrecy

Trust Issues: Transparency


BBC can ‘rebuild trust’ but Lord Patten has no relevant experience says former director-general

Former BBC director-general Greg Dyke has attacked Lord Patten over the ongoing management

crisis at the corporation. Mr. Dyke has said that Lord Patten, chairman of the BBC Trust, has no

relevant experience for the job and was simply working out how he could become an ‘all-powerful BBC chairman’. He suggested that former director-general George Entwistle, who resigned 54 days into the job over the Jimmy Savile and Newsnight scandals, had been ‘manoeuvred’ into the position but was given no support from management when he needed it.

Key Words: Sexual Scandal/Abuse

Trust Issues: Rebuilding Trust, Competence, Leadership


Ethics verdict coming soon for scandal-ridden British press

After nearly 18 months of damaging revelations about widespread media misconduct, the senior judge tapped to investigate the ethics and practices of some of the English-speaking world’s most powerful newspapers will deliver his verdict next Thursday. Lord Justice Brian Leveson’s inquiry was launched in response to the phone hacking scandal at Rupert Murdoch’s News of the World where journalists routinely intercepted phone messages to obtain sensational stories and allegedly engaged in computer hacking and bribery, too.

Key Words: Media, Unethical Practices

Trust Issues: Trust Repair, Rebuilding Public Trust


Prominent Trinidad lawyers claim reputation affected by AG statements

Three prominent lawyers, including a former temporary judge, say their reputations have been

affected by “inaccurate” statements made in the Senate by Attorney General Anand Ramlogan.

“This inaccurate statement...has caused me to be held in public contempt and it also has the tendency to mislead as it suggests that I received unreasonable and excessive fees. The statements also misrepresent 30 years of a hard-earned reputation as an independent attorney, since I have received expressions of concern that my representation of clients might now be viewed as having a particular political agenda,” Armour said in his letter.

Key Word: Libel

Trust Issue: Reputational Trust Management


Trust as currency

Trust, not money, is the currency of business and life. In a climate of trust, people are more creative, motivated, productive, and willing to sacrifice for the team. What happens when a business gains the trust edge? Every aspect of business becomes more profitable.

Key Words: Economics of Trust, Trust as Currency, Trust as a Business Model

Trust issues: Congruency in Trust, Voluntary Virtue


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