Archive for the ‘governance’ Category

Leadership in Action – The Business of Government Magazine Spring 2014

April 24, 2014 Comments off

Leadership in Action – The Business of Government Magazine Spring 2014
Source: IBM Center for the Business of Government

This edition of The Business of Government magazine underscores the importance of correlating short-term decision-making with long-range consequences. We highlight the latest trends and best practices for improving government effectiveness by introducing you to key government executives, detailing the work of public management practitioners, and offering insights from leading academics.

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Executive Paywatch: High Paid CEOs and the Low-Wage Economy

April 23, 2014 Comments off

Executive Paywatch: High Paid CEOs and the Low-Wage Economy
Source: AFL-CIO

In 2013 the CEO to worker pay ratio was 331:1 and the CEO to minimum wage worker pay ratio was 774:1. America is supposed to be the land of opportunity, a country where hard work and playing by the rules would provide working families a middle-class standard of living. But in recent decades, corporate CEOs have been taking a greater share of the economic pie while wages have stagnated and unemployment remains high.

High-paid CEOs of low-wage employers are fueling this growing economic inequality. In 2013, CEOs of the Standard & Poor’s (S&P) 500 Index companies received, on average, $11.7 million in total compensation, according to the AFL-CIO’s analysis of available data from 350 companies.

Today’s ratio of CEO-to-worker pay is simply unconscionable. While CEO pay remains in the stratosphere, production and nonsupervisory workers took home only $35,239 on average in 2013, and a full-time worker making the federal minimum wage earned only $15,080.

Even as companies argue that they can’t afford to raise wages, the nation’s largest companies are earning higher profits per employee than they did five years ago. In 2013, the S&P 500 Index companies earned $41,249 in profits per employee, a 38% increase.

CRS — Financial Assets and Conflict of Interest Regulation in the Executive Branch

April 3, 2014 Comments off

Financial Assets and Conflict of Interest Regulation in the Executive Branch (PDF)
Source: Congressional Research Service (via University of North Texas Digital Library)

Congressional offices reviewing or conducting oversight concerning the operations of executive agencies and departments, reviewing executive branch nominees for high-level appointments, or responding to constituent inquiries or petitions, may often be confronted with issues and questions of possible “conflicts of interest” of agency officials or nominees. This report summarizes and analyzes the issues of conflicts of interest that are addressed in federal law and regulation regarding officers and employees in the executive branch of the federal government.

Preparing for bigger, bolder shareholder activists

April 3, 2014 Comments off

Preparing for bigger, bolder shareholder activists
Source: McKinsey & Company

Activist investors are getting ever more adventurous. Last year, according to our analysis, the US-listed companies that activists targeted had an average market capitalization of $10 billion—up from $8 billion just a year earlier and less than $2 billion at the end of the last decade. They’ve also been busier, launching an average of 240 campaigns in each of the past three years—more than double the number a decade ago. And even though activists are a relatively small group, with only $75 billion in combined assets under management compared with the $2.5 trillion hedge-fund industry overall, they’ve enjoyed a higher rate of asset growth than hedge funds and attracted new partnerships with traditional investors. As a result, they have both the capital and the leverage to continue engaging largecap companies.

Public Service Delivery: Role of Information and Communication Technology in Improving Governance and Development Impact

March 31, 2014 Comments off

Public Service Delivery: Role of Information and Communication Technology in Improving Governance and Development Impact
Source: Asian Development Bank

The focus of this paper is on improving governance through the use of information and communication technology (ICT) in the delivery of services to the poor, i.e., improving efficiency, accountability, and transparency, and reducing bribery. A number of papers recognize the potential benefits but they also point out that it has not been easy to harness this potential. This paper presents an analysis of effective case studies from developing countries where the benefits have reached a large number of poor citizens. It also identifies the critical success factors for wide-scale deployment.

The paper includes cases on the use of ICTs in the management of delivery of public services in health, education, and provision of subsidized food. Cases on electronic delivery of government services, such as providing certificates and licenses to rural populations, which in turn provide entitlements to the poor for subsidized food, fertilizer, and health services are also included. ICT-enabled provision of information to enhance rural income is also covered.

Companies are missing opportunities to mine big data to reduce fraud risk and improve anti-bribery compliance

March 28, 2014 Comments off

Companies are missing opportunities to mine big data to reduce fraud risk and improve anti-bribery compliance
Source: Ernst & Young

EY’s 2014 global forensic data analytics survey, Big risks require big data thinking, highlights that 63% of senior executives surveyed at leading companies around the world, agree that they need to do more to improve their anti-fraud and anti-bribery procedures, including the use of forensic data analytics (FDA). The survey polled over 450 executives in 11 countries, including finance professionals, heads of internal audit, compliance and legal, about their use of FDA in anti-fraud and anti-bribery compliance programs.

The survey also finds that 87% of respondents indicate that regulatory requirements, including anti-corruption laws and recent enforcement trends, are a driving force behind the design and use of FDA, with almost half indicating that these regulatory developments are a top five factor. Bribery and corruption is reported as the top perceived risk at 65%, which aligns well with the finding that 74% report using FDA to combat bribery and corruption. Other perceived significant fraud risk areas, such as asset misappropriation and financial misstatement, are also priority areas for FDA attention.

The Structural Genomics Consortium: A knowledge platform for drug discovery

March 27, 2014 Comments off

The Structural Genomics Consortium: A knowledge platform for drug discovery
Source: RAND Corporation

The Structural Genomics Consortium (SGC) supports drug discovery efforts through a unique, open access model of public-private collaboration. This report presents the results of an independent evaluation of the Structural Genomics Consortium, conducted by RAND Europe with the Institute on Governance. The evaluation aimed to establish the role of the SGC within the wider drug discovery and public-private partnership (PPP) landscape, assessing the merits of the SGC open access model relative to alternative models of funding R&D in this space, as well as the key trends and opportunities in the external environment that may impact on the future of the SGC. It also established the incentives and disincentives for investment, strengths and weaknesses of the SGC’s model, and the opportunities and threats the SGC will face in the future. This enabled us to assess the most convincing arguments for funding the SGC at present; important trade-offs or limitations that should be addressed in moving towards the next funding phase; and whether funders are anticipating changes either to the SGC or the wider PPP landscape. Finally, we undertook a quantitative analysis to ascertain what judgements can be made about the SGC’s past and current performance track record, before unpacking the role of the external environment and particular actors within the SGC in developing scenarios for the future.

UK — Open Public Services 2014

March 20, 2014 Comments off

Open Public Services 2014
Source: Cabinet Office

The Open Public Services (OPS) White Paper, published in 2011, set out the government’s approach to reforming public services, based on the principles of choice, diversity, accountability, decentralisation and fair access.

This progress report shows how far government has come in reforming public services in line with these principles. It demonstrates how these reforms have improved the quality of our public services and made sure services can respond to individual choices and people’s real life, complex needs.

Are Top Executives Paid Enough? An Evidence-Based Review

March 19, 2014 Comments off

Are Top Executives Paid Enough? An Evidence-Based Review (PDF)
Source: Wharton School, University of Pennsylvania

Our review of the evidence found that the notion that higher pay leads to the selection of better executives is undermined by the prevalence of poor recruiting methods. Moreover, higher pay fails to promote better performance. Instead, it undermines the intrinsic motivation of executives, inhibits their learning, leads them to ignore other stakeholders, and discourages them from considering the long-term effects of their decisions on stakeholders. Relating incentive payments to executives’ actions in an effective manner is not possible. Incentives also encourage unethical behaviour. Organizations would benefit from using validated methods to hire top executives, reducing compensation, eliminating incentive plans, and strengthening stockholder governance related to the hiring and compensation of executives.

Cost of Compliance 2014

March 13, 2014 Comments off

Cost of Compliance 2014 (PDF)
Source: Thomson Reuters (Accelus)

Thomson Reuters Accelus’ annual Cost of Compliance Survey provides an insight into the experiences and expectations of global compliance professionals.

The report is intended to help regulated firms with future planning, resourcing and focus and is driven by the great level of industry participation. Thomson Reuters Accelus is grateful for respondents’ open and candid views. Participants remain anonymous but their views are crucial in helping peers to benchmark their own firms’ practices and experiences and to assess whether their resources, focus and expectations are in line with those in the wider industry.

Risk Intelligent Governance: Lessons from state-of-the-art board practices

March 5, 2014 Comments off

Risk Intelligent Governance: Lessons from state-of-the-art board practices
Source: Deloitte

As a follow-up to our 2009 report, Risk Intelligent governance: A practical guide for boards, we’ve taken a fresh a look at helping board members achieve Risk Intelligent governance. To that end, this paper provides real-world examples and case studies compiled in our work with boards that employ state-of-the-art practices.

These practices focus on six key areas: defining the board’s risk oversight role, fostering a risk intelligent culture, approving the risk appetite, helping management incorporate risk intelligence into strategy, assessing the maturity of the risk governance process and making sure the organization discloses the risk story to stakeholders.

We offer this paper to directors as food for thought and a catalyst for focused action, with the caveat that Risk Intelligent governance is not a one-size-fits-all approach to be adopted by every organization or within each industry.

CRS — Independence of Federal Financial Regulators

March 4, 2014 Comments off

Independence of Federal Financial Regulators (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Conventional wisdom regarding regulators is that the structure and design of the organization matters for policy outcomes. Financial regulators conduct rulemaking and enforcement to implement law and supervise financial institutions. These agencies have been given certain characteristics that enhance their day-to-day independence from the President or Congress, which may make policymaking more technical and less “political” or “partisan,” for better or worse. Independence may also make regulators less accountable to elected officials and can reduce congressional influence, at least in the short term.

Although independent agencies share many characteristics, there are notable differences. Some federal financial regulators are relatively more independent in some areas but relatively less so in others.

VA OIG — Administrative Investigation Failure to Properly Supervise, Misuse of Official Time and Resources, and Prohibited Personnel Practice VA Center for Innovation VA Central Office (redacted)

March 3, 2014 Comments off

Administrative Investigation Failure to Properly Supervise, Misuse of Official Time and Resources, and Prohibited Personnel Practice VA Center for Innovation VA Central Office (PDF)
Source: U.S. Department of Veterans Affairs, Office of Inspector General

The former (resigned) Director of VA’s Center for Innovation did not properly detail and supervise a GS-12 VBA Rating Veterans Service Representative (RVSR), which led to the RVSR misusing official time, unauthorized travel, misusing about $31,000 in travel funds, misusing a VA position and resources, and installing unapproved software to a VA laptop for sexting. The former Director also engaged in a prohibited personnel practice when he pressured VBA officials to create a non-competitive GS-13/14 position to give preference to and promote the RVSR; however, he intentionally did not tell the VBA officials of an ongoing OIG investigation of the RVSR for misconduct so that they could make fully informed decisions. Further, VBA officials engaged in a prohibited personnel practice when they failed to make proper considerations in their personnel decisions and created a position to promote the RVSR without question and solely due to the former Director’s request.

Issa, Grassley Report on FDA Employee Monitoring Finds Agency Still Lacks Adequate Whistleblower Protections

February 26, 2014 Comments off

Issa, Grassley Report on FDA Employee Monitoring Finds Agency Still Lacks Adequate Whistleblower Protections
Source: U.S. House of Representatives, Committee on Oversight and Government Reform

oday, House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., and Senate Judiciary Committee Ranking Member Chuck Grassley, R-Iowa, released a joint report on the U.S. Food and Drug Administration (FDA)’s highly-invasive surveillance program that monitored employees who contacted Congress and the media with concerns about FDA’s medical device approval process.

In April 2010, the FDA initiated a surveillance program of unprecedented scope to monitor employees in the Center for Devices and Radiological Health. The program allowed FDA managers to read communications between FDA employees and Congress, the U.S. Office of Special Counsel (OSC), and their personal attorneys. The Joint Committee report, entitled “Limitless Surveillance at the FDA: Protecting the Rights of Federal Whistleblowers,” found the FDA acted without regard for employees’ whistleblower rights, which protect their communications to Congress and OSC. The joint report also found that FDA conducted the program without adequate guidelines in place and made no effort to limit the scope of the program to exclude protected communications.

2014 Edelman Trust Barometer

February 26, 2014 Comments off

2014 Edelman Trust Barometer
Source: Edelman

We believe that trust is an asset that enterprises must understand and properly manage in order to be successful in today’s complex operating environment. Unlike reputation, which is based on an aggregate of past experiences with a company or brand, trust is a forward facing metric of stakeholder expectation.

The 2014 Edelman Trust Barometer is the firm’s 14th annual exploration of trust. We surveyed 33,000 people (27,000 General Public and 6,000 Informed Public respondents) in 27 markets around the world on their trust in institutions, credible sources/channels and specific issues and perceptions impacting trust in business and government.

CRS — Iraq: Politics, Governance, and Human Rights (updated)

February 25, 2014 Comments off

Iraq: Politics, Governance, and Human Rights (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

More than two years after the 2011 U.S. withdrawal from Iraq, sectarian divisions and the Sunniled uprising in neighboring Syria have fueled a revival of radical Islamist Sunni Muslim insurgent groups that are attempting to undermine Iraq’s stability. Iraq’s Sunni Arab Muslims resent the Shiite political domination and perceived discrimination by the government of Prime Minister Nuri al-Maliki. Iraq’s Kurds are embroiled in separate political disputes with the Baghdad government over territorial, political, and economic issues. The rifts caused a significant uprising led by the Sunni insurgent group Al Qaeda in Iraq, now also known by the name Islamic State of Iraq and the Levant (ISIL), that began December 26, 2013 and gained control of several cities in Anbar Province. Earlier, unrest delayed some provincial elections during April-June 2013 and the latest uprising could affect the legitimacy of national elections for a new parliament and government set for April 30, 2014. Maliki is widely expected to seek to retain his post after that vote.

USPS OIG: Management Alert – Risks Associated With CB Richard Ellis, Inc. Contract

February 24, 2014 Comments off

USPS OIG: Management Alert – Risks Associated With CB Richard Ellis, Inc. Contract (PDF)
Source: U.S. Postal Service, Office of Inspector General

As a result of our audit and ongoing concerns surrounding the CBRE contract, we have identified additional informa tion that increases the financial risks to the Postal Service . Specifically, Postal Service officials modified the contract in June 2012 to allow CBRE to negotiate on behalf of the Postal Service as well as prospective buyers and lessors in the same real estate transaction . Also, CBRE was responsible for soliciting appraisals to determine the fair market value of the properties that it then sells and leases.

The contract modification also requires CBRE to notify the Postal Service of any actual or potential conflicts of interest, such as owning or having an interest in a property that may be part of a Postal Service real estate transaction. To date, CBRE has not notified the Postal Service of any such conflicts. Given the multiple roles CBRE plays within the real estate industry , the Postal Service should take steps to lessen the potential for CBRE to engage in transactions that create conflicts of interest. CBRE conflicts of interest could lead to financial loss to the Postal Service and decrease public tr ust in the Postal Service’s brand.

Management Practices, Relational Contracts, and the Decline of General Motors

February 20, 2014 Comments off

Management Practices, Relational Contracts, and the Decline of General Motors
Source: Harvard Business School Working Paper

General Motors was once regarded as one of the best managed and most successful firms in the world, but between 1980 and 2009 its share of the U.S. market fell from 62.6% to 19.8%, and in 2009 the firm went bankrupt. In this paper we argue that the conventional explanation for this decline-namely high legacy labor and health care costs-is seriously incomplete, and that GM’s share collapsed for many of the same reasons that many of the other highly successful American firms of the 50s, 60s, and 70s were forced from the market, including a failure to understand the nature of the competition they faced and an inability to respond effectively once they did. We focus particularly on the problems GM encountered in developing the relational contracts essential to modern design and manufacturing. We discuss a number of possible causes for these difficulties: including GM’s historical practice of treating both its suppliers and its blue collar workforce as homogeneous, interchangeable entities, and its view that expertise could be partitioned so that there was minimal overlap of knowledge amongst functions or levels in the organizational hierarchy and decisions could be made using well-defined financial criteria. We suggest that this dynamic may have important implications for our understanding of the role of management in the modern, knowledge-based firm, and for the potential revival of manufacturing in the United States.

CRS — Corporate Criminal Liability – An Overview of Federal Law

February 11, 2014 Comments off

Corporate Criminal Liability – An Overview of Federal Law (PDF)
Source: Congressional Research Service (via MSPB Watch)

A corporation is criminally liable for the federal crimes its employees or agents commit in its interest. Corporate officers, employees, and agents are individually liable for the crimes they commit, for the crimes they conspire to commit, for the foreseeable crimes their coconspirators commit, for the crimes whose commission they aid and abet, and for the crimes whose perpetrators they assist after the fact.

The decision whether to prosecute a corporation rests with the Justice Department. Internal guidelines identify the factors that are to be weighed: the strength of the case against the corporation; the extent and history of misconduct; the existence of a compliance program; the corporation’s cooperation with the investigation; the collateral consequences; whether the corporation has made restitution or taken other remedial measures; and the alternatives to federal prosecution. As in the case of individual defendants, corporation prosecutions rarely result in a criminal trial. More often, the corporation pleads guilty or enters into a deferred or delayed prosecution agreement.

The Value Killers Revisited

February 6, 2014 Comments off

The Value Killers Revisited
Source: Deloitte

The last two decades have seen a number of events driving major value losses in individual companies, and collectively in the global economy.

Since Deloitte LLP’s first value killers study in 2005, risk management has grown in importance to corporations worldwide. We find boards, management, and regulators paying increasing attention to risk management and governance. New disclosure requirements seek to help shareholders become more aware of company-specific risks. Yet, many companies experience significant value losses in a short period of time.

“The value killers revisited” reexamines the 2005 study, in which we assessed the drivers of 20 percent or greater value losses in a company within a one-month period relative to a broad market index. Following up on our prior research, this latest study examines the drivers of major value losses from 2003 through 2012. The losses, while distinct, were often driven by similar underlying risks.


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