Trust Digest 50 (May 20, 2014)

What is the Reciprocity Ring?
What do Bristol-Myers Squibb, IBM, Boeing, Citigroup, Estee Lauder, UPS, Novartis, and GM have in common? They’ve all used the Reciprocity Ring. The method was developed by University of Michigan sociologist Wayne Baker and his wife Cheryl at Humax. A group is gathered for the purpose of members asking for something important for them in their personal or professional lives. It typically takes about two and a half hours and the results can be very powerful.
Key Words: CSR, Leadership
Trust Issues: Benevolence, Responsibility

U.S. Charges Five Chinese Military Hackers for Cyber Espionage Against U.S. Corporations and a Labor Organization for Commercial Advantage
A grand jury in the Western District of Pennsylvania (WDPA) indicted five Chinese military hackers for computer hacking, economic espionage and other offenses directed at six American victims in the U.S. nuclear power, metals and solar products industries.
Key Words: China, Espionage, Hacking
Trust Issues: Integrity, Accountability

AstraZeneca Chair: Shareholders Can 'Vote Me Away'
As AstraZeneca's shares tumbled following its rejection of Pfizer's increased bid, the company's chairman told CNBC that shareholders had the right to "vote me away" if they were unhappy. Leif Johansson said that AstraZeneca had engaged with shareholders over the bid and was happy that the decision to reject the deal was the right one.
Key Words: AstraZeneca, Pfizer, Mergers
Trust Issues: Responsibility, Accountability, Stakeholders

Recruiting For Good: How LinkedIn Sees Its Role In Effecting Social Change
Since its founding eleven years ago LinkedIn [LNKD +2.84%] has connected the world’s professionals to make them more productive and successful. LinkedIn’s Bob Spoer shares how their platform is currently being used to connect people who are driving social change through volunteerism and philanthropy, and how millions of users can collectively facilitate collaboration and movement-building.
Key Words: CSR, LinkedIn
Trust Issues: Benevolence

Student Debt Grows Faster at Universities With Highest-Paid Leaders, Study Finds
At the 25 public universities with the highest-paid presidents, both student debt and the use of part-time adjunct faculty grew far faster than at the average state university from 2005 to 2012, according to a new study by the Institute for Policy Studies, a left-leaning Washington research group. The study, “The One Percent at State U: How University Presidents Profit from Rising Student Debt and Low-Wage Faculty Labor,” examined the relationship between executive pay, student debt and low-wage faculty labor at the 25 top-paying public universities.
Key Words: Education, Executive Pay, Student Debt
Trust Issues: Integrity, Competence

Credit Suisse Pleads Guilty to U.S. Criminal Charge in Tax Probe
(Reuters) - Swiss bank Credit Suisse on Monday pleaded guilty to a criminal charge for its role in helping Americans dodge taxes, U.S. Attorney General Eric Holder said, and will pay more than $2.5 billion as part of an agreement with U.S. authorities. Separately, the New York Department of Financial Services said it had determined not to revoke the bank's license in the state.
Key Words: Credit Suisse, Regulation
Trust Issues: Integrity, Accountability

‘Dark Money’ Floods in to US Election
Long used to opposing candidates bitterly facing off in elections, US voters are being offered a different choice for this year’s congressional polls – the spectacle of billionaires battling each other head on. Tom Steyer, a billionaire Democrat-aligned investor who is deploying his fortune to highlight the threat of climate change, is airing TV advertisements attacking not the Republicans but fellow billionaires Charles and David Koch.
Key Words: Politics, Campaign Finance
Trust Issues: Transparency, Accountability

What Boards Should Ask About Risk Management
Let’s say that you have taken your car in to your dealer for a routine service and check-up. How would you feel if the mechanic came back and gave you this report? “Your speedometer registers zero, which is correct because the car is not moving. The compass is pointing due north, which is also correct. The engine oil is full and the tires are at the correct pressure.” Would you prefer this report? “The speedometer and compass are working well. The engine oil is full and there is no leak. We took the car for a test drive and checked for leaks and also for any issues with the tires, which remained at the correct pressure.”
Key Words: Boards, Risk, Leadership
Trust Issues: Capability, Sustainability

SEC Faces Latest Test in Insider-Trading Case Involving GE Capital Tip
Securities and Exchange Commission Chairman Mary Jo White has pledged to toughen enforcement and take more difficult cases to trial. On Monday, that effort will be put to a test as the trial in a long-running insider trading case kicks off in federal court in Manhattan.
Key Words: GE Capital, Insider Trading, SEC
Trust Issues: Regulation, Capability

Defining An “Ethical” Leader
The most effective ethics and compliance program starts with a CEO. But that is not the end of the story. Life is easier with a CEO who understands the importance of ethics and compliance, promotes it as a financial driver for profitability and sustainability, and protects a company’s ethical reputation.
Key Words: Ethics, Leadership
Trust Issues: Responsibility, Integrity

Target Cut Former CEO’s Pay Package by 37%, Confirms His ‘Involuntary Termination’
After seeing its per-share profit fall for the first time in at least five years, Target Corp. cut its former Chief Executive Gregg Steinhafel’s total compensation by about two-fifths and gave no bonuses to most of its top executives, a new filing shows. The total compensation package for Steinhafel, who left his role earlier this month, declined to $13 million for fiscal-year 2013 from $20.6 million a year before. His salary stood at $1.5 million and he received no bonus for a second straight year. He didn’t receive any option awards and nonequity incentive plan compensation, versus a combined $8.13 million in the prior year. His other compensation, which includes personal use of company-owned aircraft, fell 90% to about $509,000. His stock awards, however, just about doubled to $10.2 million.
Key Words: Executive Pay, Security
Trust Issues: Accountability, Capability

The GlobalEthicist – Do Banks Care About Reputation Risk?
Financial institutions are yet to address properly reputational risk, despite all the fall out from the crash in 2008, says Andrea Bonime-Blanc. We’ve all heard about, read about and maybe even personally experienced the parade of risk, legal and compliance horrors that have plagued the financial sector since the meltdown of 2008. And the parade has continued fast and furious since then. Despite copious investigations, settlements, prosecutions, probes, fines and castigations by a broad cross-section of local, state, federal, national and international regulators and agencies, the financial sector continues to get into trouble. Witness the continuing fallout from the Libor scandal, with lawsuits and criminal charges yet to unfold.
Key Words: Ethics, Banks, Financial Crisis
Trust Issues: Reputation, Accountability, Responsibility

Cisco Boss Calls on Obama to Rein in Surveillance
Cisco’s chief executive has written to President Barack Obama warning of a collapse of trust in US technology after evidence emerged showing the National Security Agency breaking into his company’s equipment. In a letter seen by the Financial Times, John Chambers called for “standards of conduct” to rein in government surveillance so that national security objectives do not interfere with the US’s leading position in the global technology market. The letter was dated the day after pictures circulated on the internet showing NSA staff opening boxes of Cisco gear so that the US security agency can monitor internet traffic after the equipment has been shipped to customers.
Key Words: Cisco, NSA
Trust Issues: Transparency, Responsibility, Integrity

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