Economy

Corporate Regulatory Compliance Might Not be Easy But It Is Simple

Published

7 years ago

December 24, 2015

The deliberate deception at Volkswagen along with other events such as the insider trading at ImClone Systems and rogue trading at Bearings Bank all demonstrate that employees will break the law in the course of their employment.

The consequences of criminal acts committed by employees can be very significant indeed. In addition to the legal sanctions levied against the employees themselves, business can be lost through loss of reputation, corporations can face fines running into billions of dollars and senior executives can find themselves being prosecuted because the law was broken on their watch. Given that in many cases the courts are finding that the executive leadership of corporations are also criminally liable how can the executive leadership protect themselves and their companies from being held criminally responsible for the activities of their employees?

The employer-employee relationship is undoubtedly complex. Many employees spend more of their waking hours at work than they do with their families and as such the workplace environment can have a significant effect of employees. Most workplace environments and relationships are positive with employees enjoying social events, making friends and even meeting their spouse at work. Unfortunately some are not so good but whatever the nature of the relationship it will have an influence on the employee that will extend outside of the workplace and reach into many parts of their life.

In fact, it is often said the employer-employee relationship is so complex that the second most significant legal transaction that an individual can complete is to accept a job offer, the most complex being getting married. More complex than buying a house and entering into a mortgage, a binding agreement that can last for 25-30 years. So how can it be that an agreement that can be terminated with two weeks’ notice (or even immediately) is almost as significant as a marriage?

Well, the employer will have a significant degree of control over the employee. In addition to determining where they will be and what they will do for a large amount of their time the employer can control or influence who they spend that time with, the opinions they can share, the clothes they wear and even some of their off duty conduct such as how they present themselves on social media. But most importantly, the reason that the employee accepts this level of control from their employer is the employees need to feed, clothe and provide shelter for themselves and often their family also. They are (in most cases) financially dependent on their employer and therefore the employer will have a very significant influence on the employee.

All business are under pressure. The need to be financially viable, to cover the operating costs, to make the payroll and turn a profit are behind every decision. In a today’s fast moving business world corporations need to be innovative, they need to be efficient and they need to stay ahead of their competition. Add this to the raft of regulatory compliance requirements including employment standards (including Human Rights), Occupational Health and Safety (OHS), consumer protection, financial and environmental codes and regulations we can see that business is complicated and it’s challenging. So, given the complicated nature of the employer-employee relationship and the broad range of regulatory obligations placed on corporations, should the executive leadership be held accountable for the conduct of employees, particularly when the number of employees involved can run into the tens or even hundreds of thousands?

The simple answer is yes they should, and for two reasons. The first is that corporations are in business to make money. Whatever their mission, vision or values, ultimately they are there to make a profit for the owner(s) or shareholders. For this reason they can reasonably be expected to conduct themselves ethically and in accordance with all legal obligations and requirements. To do otherwise would simply be wrong. And the second reason is that as a result of the employees financial dependence on the employer, the employee is, in some respects at least, in a position of weakness. In effect, the employer- employee relationship is not one of peers but is one of servant and master.

As previously stated most employer-employee relationships are positive, but they are still not balanced. The employee has a need to provide food, clothing and shelter for themselves and in many cases their family also. As a result they will be motivated to act in their employers best interest. Their success is mutually dependent upon their employer’s success. The business grows, the employee grows. The business stagnates, the employee stagnates. And if the business fails the employee fails. The employee’s need for the business to succeed will be a significant motivator in determining the employees actions and will influence their decisions considerably.

So how does this make the executive leadership accountable for the conduct of their employee? Aren’t the employees as adults with freedom of choice ultimately responsible for their own actions? For the most part, yes they are. Employees can and will be held legally accountable for their actions which in many cases can result in a criminal prosecution. In recent years there have been a number of high profile (and lesser known) prosecutions where employees have been fined or even incarcerated for criminal acts committed in the course of their employment. But the criminal liability doesn’t end there, and for one very important reason.

In addition to being financially dependent upon their employer, all of the employees actions at work will be conducted in an environment and a culture that is created by and is the responsibility of the corporation’s executive leadership and management. That environment and culture will shape every decision that they make to the extent that on occasion they will act in manner that may be contrary to their own values.

In the course of their employment the employee will be required to perform a number of task throughout the day. That’s life, that’s what they’re there for and it’s a perfectly reasonable expectation for the employer to have. But what happens when the employee cannot complete those tasks despite their best efforts? The likelihood is that they will cut corners, bend rules and even break rules, which could include laws, to get the job done because they are motivated to do so as a result of the need to see the business succeed. At one end of the spectrum this could mean minor infractions. Perhaps they will not follow all of the safety rules, they run in the workshop, they don’t put their safety glasses on or they don’t put their seat belt on between deliveries. No harm, no foul, right? Well, no, that’s never the case, but more importantly at the other end of the spectrum we can and do find employees breaking laws relating to matters as serious as insider trader and large scale regulatory non compliance as a result of needing to see the business succeed and to achieve the objectives required as part of their employment.

So how can the executive leadership protect themselves from being held criminally liable for the ac tions of their employees? This certainly isn’t easy given the number of employees involved, all of whom are free thinking adults with the ability to make their own decisions, but it is simple with just a few simple steps. The first is to never overtly ask an employee to commit an illegal act. It’s that simple. The second is to make it clear that no illegal activity will be tolerated by employees in the course of their employment. And to do this all the employer has to do to do this is to clearly and overtly state in their corporate values that they will conduct all of their business operations in accordance with all legal and regulatory obligations and requirements for all jurisdictions within which they conduct business. By making the statement clearly and overtly no one can hide from the requirement of the statement whatever level that they are at in the company. It’s that simple. The third is to make it acceptable for an employee to say ‘I can’t do that,’ to their supervisor or manager when they are faced with the requirement to do something that they cannot do whilst complying with all necessary legal and regulatory requirements. Whether the task at hand would require the employee to cut a corner by failing to wear their personal protective equipment or to deceive a regulatory body the corporate culture must be such that the employee is able to say ‘I can’t do that,’ without fear or recrimination and the supervisors, managers and executive leaders must accept that and be able pass the message up the chain in the same light because if the business goal cannot be achieved within the law, it is not worth achieving. It’s that simple.

Economy

Brick By Brick, BRICS Now a New Bridge for a New World

Published

2 days ago

May 30, 2023

Naseem Javed

Measuring BRICS in single decades, in 2001, BRIC started as an acronym for Brazil, Russia, India, and China; Goldman Sachs economist Jim O’Neill claimed that by 2050 the four BRIC economies would come to dominate the global economy. So South Africa was added to BRIC in 2010. The following countries are now expressing interest in joining: Afghanistan, Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Saudi Arabia, Senegal, Sudan, Syria, the United Arab Emirates, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe. Is this now the awakening of BRICS+ or BRICS power?

BRICS+ by 2030 will add dozen new members and carve new indices, and by 2040, it will lead to new intellectualism on geopolitics and socio-economies for the super complex 2050 age of smart living.

Historically, BRICS nations pushed on their people-power agenda over super-power titles. They made extreme value-creation economic models over focusing on powerful military-industrial complexes. They focused on nation-building and avoided special mandates to manage global affairs. They have been on a quest to upgrade them. They were feeding hungry mouths, as they were population rich, constantly up-skilling, and improving value creation as they were SME rich. They kept a steady watch to create multilateralism to uplift humankind.

They, too, made mistakes, as did the rest of the world

In the third decade of the third millennium, come 2020, three transformations erupted. First, futurism changed the rules on the ‘physicality of work’ and created a new imbalance with the ‘mentality of performance’; this has divided the workforce of world; the old system of over a billion commuting daily to the center of a complex maze to arrive daily at the sanctum of the company and create climate change. So now, in response, some 50% of the world’s workforce has chosen to stay away and work remotely in the surroundings of wide-open choices. Furthermore, technology uplifted micro-power-nations and exposed Western economies now stripped naked in bubble baths on slippery floors, they tippy-toe practicing conga-lines

Newly magnified economy: Behold, what microscopes exposed the magnified inner workings of the body. Similarly, the integrated networks have exposed the digital connectivity and working of millions of villages, cities, and nations with additional billions of people to interact, trade, improve grassroots prosperity and create a well-informed and opinionated citizenry. Some 100 years ago, if only 1% of the world’s population knew what was happening, today it is a dozen times more, and by 2030 double again. Why would these numbers change the global economic matrix when translated into micro-trading, micro-manufacturing, and micro-exporting? International opinion today is already strong enough to crush any national opinion of any nation still lingering under the illusion of a self-promoted victory.

When the SME sector already exists within each nation, the global markets are always hungry for good quality goods and services, and the rains of almost free digital technologies make such transformation a quick turnaround. Therefore, mindsets are critically essential; the need to define the difference between the job seeker mindset that builds the organizations and the job creator mindset that originates and creates that organization in the first place.

So what are the lessons, key features, and blueprints in sight?

Mistakes and new lessons: Last many decades, as the new world was rising, Western citizens felt like China experts, and their regular visits to local China towns restaurants in each city misguided them that Laundromat trained Chinese could only produce some chicken fried rice. Ever since the advent of the camera, the East was always projected as poor and dysfunctional; mesmerized by the media coverage during the last many decades, the West was equally convinced that India, a land of only snake charmers and fakirs, finally someday speak better English. The general perceptions about Asia, besides eating rice, if they could ever make cheaper products for the West. The rest is history, mistakes, and lessons.

After the big ding-dong nights of 2000 New Year’s Eve, today’s new story starts from the 20th chapter. Now China and India alone have created some 500 million new entrepreneurs, not by a magic pill or meta-crypto-wand but by National Mobilization of Entrepreneurialism, a slow, painful deployment of SMEs across the nation, and by creating mobilization protocols to identify, classify, and digitizing based on multiple factors from type and size to the evaluation of their “respectable” role in future communities and economic factors. This methodology was far more advanced in strategy and stern management over the globalization frenzy from the West, where sudden exporting of manufacturing of the industrial plants to kill manufacturing and destroying the middle class out of the West already declared globalization a great success.

The other mistake is to assume this is an economic or an academic study, at best, like an Oscar Slap on sleepy rotundas occupied with endless printing of money across the Western economies. Instead, this is an entrepreneurial response for the entrepreneurial nations to awaken hidden entrepreneurial talents in up-skilling SMEs and re-skilling manufacturers at national levels.

Recommendations and warnings: No airline can survive with only Flight Engineers and Frequent Flyers stuffed inside the cockpits; that space is only reserved for highly trained pilots. Henceforth, across the world, any economic development of any size, shape, or authority may find other more suitable alternate paths of occupation if they still cannot demonstrate any levels of understanding, applicable skills, or mobilization mastery on the National Mobilization of Entrepreneurialism to up-skill exporters and re-skill manufactures and uplift national SME sector as the most prominent economic contributor of the nation. Study the biggest error of economic thinking

Underestimating the hidden powers of early thinking and starting a tiny unknown SME is a mistake of mindsets; here, entrepreneurialism like a saga unfolds, like a voluminous piece of literature but demanding literacy, understanding the job seeker mindsets and the ability to differentiate with entrepreneurial job creator mindset is already winning half the battle. Study the Mindset Hypotheses

Nations failing to realize the power of the billion SME rising in Asia and still unable to declare a national agenda of national mobilization of SMEs now must acquire an understanding of the 4B Factor: a billion displaced due to the pandemic, a billion replaced due to technology, a billion misplaced in wrong jobs now a billion on starvation watch. Furthermore, this 4 billion ever digitally connected mass of people ever in the history of humankind is now the most significant force of global opinion. Notice nations are already intoxicated with joy over the popularity of their national public opinion while having just an opposite international opinion on the world stage.

Recommendation; everyone is born an entrepreneur; our system chips away at this talent. Nevertheless, 10% to 50% high potential SMEs of any nation once are identified, classified, and digitized within 100 days. The uplifting digital platforms of up-skilling exporters and re-skilling manufacturers will result in 10% to 50% quadrupling their performance, productivity, and profitability. Imagine how much-regimented efforts will activate a positive national economic revolution based on real value creation, uplifting grassroots prosperity. How soon is a nation ready for a significant change? The rest is easy.

Economy

Promoting Economic Security: Enhancing Stability and Well-being

Published

6 days ago

May 27, 2023

Ayesha Binat-E-Umar

The stability and well-being of people, communities, and countries are critically dependent on economic security. It covers a range of topics, such as access to necessities, work opportunities, stable incomes, and defense against economic shocks. The need of guaranteeing economic security has increased significantly in the modern world, which is characterized by technical developments, geopolitical shifts, and unexpected disasters. The importance of economic security is examined in this article, along with important tactics for promoting adaptability and preserving people’s quality of life.

The value of economic security to individuals, communities, and countries cannot be overstated. By fostering an atmosphere where people and families can achieve their basic needs without suffering undue stress, it promotes stability. Because of this stability, people can recuperate and start over after severe shocks like economic downturns, natural disasters, or health crises.

Furthermore, economic security contributes to social cohesion by reducing inequality and fostering inclusivity. When individuals feel economically secure, they are more likely to actively participate in society, contribute to their communities, and engage in productive endeavors. This sense of security leads to greater social harmony and a collective feeling of prosperity.

Moreover, economic security is vital for long-term sustainable development. It enables individuals and societies to invest in education, healthcare, infrastructure, and innovation. These investments drive economic growth, improve overall well-being, and create the foundation for a prosperous future. By ensuring economic security, countries can build resilient and sustainable economies that benefit their citizens and contribute to global progress.

To enhance economic security, several key strategies can be implemented. Firstly, governments and businesses should prioritize diversifying their economies by promoting sectors with growth potential and resilience. By reducing reliance on a single industry or market, countries can mitigate the impact of economic downturns and build a more robust and diversified economy.

Investing in education and skills development is another crucial strategy. Governments and organizations must focus on providing quality education, vocational training, and lifelong learning opportunities. Equipping individuals with the necessary tools and knowledge enables them to adapt to changing economic landscapes and remain competitive in the job market.

Strong social safety nets are necessary to protect people during times of economic upheaval. The most disadvantaged populations should be given priority in the design and implementation of comprehensive social welfare systems by the government. Creating a safety net for all citizens entails implementing programs for income support, healthcare coverage, and unemployment benefits.

Promoting entrepreneurship and innovation can create new opportunities for economic growth and job creation. Governments can support aspiring entrepreneurs by providing access to capital, mentorship programs, and favorable regulatory environments. Embracing technological advancements and fostering a culture of innovation further enhances economic security, particularly in an increasingly digital world.

International cooperation is essential since economic security is a global issue. Cooperation between nations is necessary to advance ethical business practices, lessen economic inequality, and improve financial stability. Initiating discourse, coordinating policy, and assisting nations in economic crises are all important functions of multilateral organizations.

Societies can improve their economic security and create a more secure and prosperous future by putting these strategies into practice: diversifying the economy, investing in education and skills, creating social safety nets, encouraging entrepreneurship and innovation, and fostering international cooperation.

Having economic security is crucial in a world that is uncertain and changing quickly. Governments, corporations, and individuals may all work together to create an environment that promotes economic security by putting a priority on stability, resilience, and inclusivity. We can create a more resilient and prosperous future for everybody through diversity, education, social safety nets, entrepreneurship, and international cooperation. By making investments in financial stability, we build a more just and sustainable world.

Economy

The Impact of Globalization on the South Asian Economy

Published

6 days ago

May 26, 2023

Karar Ali Shah

Globalization refers to the process by which economies, societies, and cultures from different countries become integrated with one another. The economies of the countries that make up South-East Asia, which include India, Pakistan, Bangladesh, Nepal, and Sri Lanka, have been significantly impacted by the spread of globalization in recent decades. The effects of globalization on the economies of South Asian countries have been mixed, with some positive and some negative results.

Positive Impacts of Globalization on the South Asian Economy

The expansion of South-East Asia’s trade and investment opportunities is one of the aspects of globalization that has had the most positive impact on the region’s economy. Because of its large consumer base, low labor costs, and strategic location, the region has become an attractive destination for foreign investors. As a consequence of this, the level of foreign direct investment (FDI) in South Asia has significantly increased, which has led to the development of new industries and the production of new jobs.

The expansion of the service industry in Sout-East Asia can also be attributed to the effects of globalization. South Asian countries have emerged as a hub for the outsourcing of services such as information technology (IT) and business process outsourcing as a result of the emergence of new technologies and the increased availability of skilled labor (BPO). As a direct consequence of this, the area has benefited from an increase in both the number of available jobs and the amount of money it brings.

Last but not least, globalization has facilitated greater cultural interaction and integration throughout South-East Asia. The region possesses a significant cultural legacy, and the advent of globalization has made it possible for South Asian music, films, and cuisine to become popular all over the world. This has not only contributed to a greater awareness of the region’s cultural heritage, but it has also opened up new doors for the travel and hospitality industry.

Negative Impacts of Globalization on the South-East Asian Economy

Even though there have been some positive effects, there have also been some negative effects that globalization has had on the South Asian economy. The widening gap between rich and poor is one of the most pressing problems that we face today. The advantages brought about by globalization have accrued almost entirely to a relatively small number of people, which has contributed to a widening income gap. As a consequence of this, social unrest and a wider gap in incomes have emerged.

Another significant obstacle that has been presented is the displacement of workers and traditional industries. Due to the effects of globalization, many smaller businesses have been forced to shut down, and their employees have been relocated to larger companies that are more productive. As a consequence of this, there has been an increase in unemployment as well as social unrest, particularly in rural areas.

Globalization has contributed to the deterioration of the environment in South Asia. The region has seen a growth in industries such as the textile industry, both of which have had a significant impact on the environment as a result of their expansion. The population’s health and well-being have suffered as a direct result of environmental degradation, which can be traced back to the increased consumption of natural resources and the improper disposal of waste produced by industrial processes.

Conclusion

The economy of the South-East Asian region has been affected in both positive and negative ways by the phenomenon of globalization. While it has resulted in the growth of industries and increased cultural exchange, it has also resulted in the displacement of workers and the widening of income inequality. While it has contributed to the growth of industries and increased cultural exchange, it has also resulted in the displacement of workers. In order to address these challenges, policy interventions that foster inclusive growth, protect the environment, and create new opportunities for the population will be required. By acting in this manner, countries in South Asia will be able to take advantage of globalization’s positive aspects while mitigating some of its more damaging effects.