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Coorporate Compliance Plan for Riordan

In: Business and Management

Submitted By patrina79
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|Corporate Compliance Plan |
|Interoffice Memorandum |
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|Patrina Smith |
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|Business Law 531 |
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|University of Phoenix |
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|October 12,2009 |

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Interoffice memorandum

to: Officers and Directors of Riordan

FROM: PATRINA SMITH, CORPORATE COMPLIANCE OFFICER

SUBJECT: CORPORATE COMPLIANCE PLAN

DATE: OCTOBER 12, 2009

CC: DR. MICHAEL RIORDAN

COMPANY OVERVIEW

Riordan Manufacturing Inc. is a global manufacturer of plastic products. Founded by Dr. Michael Riordan in 1991, its original focal point was on licensing its existing patents, Research and Development. Currently after years of expansion the company has grown to become a Fortune 1000 company with 550 employees and revenues in excess of $1 billion. Our products include plastic beverage containers, fan parts, custom plastic parts, heart valves, and medical stents. Our major customers are the beverage makers and bottlers, Department of Defense, aircraft manufacturers, automotive parts manufacturers, and appliance manufacturers. Riordan is a corporation which provides limited liabilities for our investors. Creditors can only look to the assets of the corporation for payment. As a corporation we file our own tax return and pay taxes on our income. Any dividends distributed to shareholders are not deducted in computing our taxes. The shareholder must pay taxes on the dividends even though we have already paid taxes on those earnings. One of the positive aspects of our corporation is that we have some tax benefits such as deductions of health insurance premiums.
Mission Statement
Our focus is to provide solutions by using polymer materials to solve our customer’s challenges, while maintaining the leader in identifying trends of the industry in our R&D. We will maintain our relationships with our customers with continued innovative solutions, a reliable business attitude, and with consistently fair prices. We will remain centered on our future by attaining and preserving productivity and reasonable profitability to guarantee our capital growth.
Corporate Compliance Overview
Riordan Manufacturing has established this corporate compliance plan to be used as a guideline for maintaining the principles of the laws governing our business both domestically and internationally. Directors and Officers need to exercise high leadership qualities by being a good example in creating and promoting a workplace environment in which compliance and ethical business conduct are expected. Our company faces several liability risks. It is up to our directors and officers to detect prevent and correct legal issues that may occur.
Labor & Employment
Riordan employees’ mission is to maintain an innovative, well informed and properly supported team whose focal point will be to sustain the viability of our company. Riordan fully complies with all pertinent labor laws and statues regarding employee and workplace environment. We employ legal US citizens including permanent residents with a valid Green Cards and individuals with valid work permits. Though we enjoy a good employment record and welcome diversity we are not immune to the liability risks associated with employees. Under Title VII of the Civil Rights Act of 1964, it is illegal to discriminate in any aspect of employment based on race, color, nation origin, age, or disabilities (Jennings,2006). Sexual orientation and sex is also a major factor of discriminatory laws. Officer and Directors needs to pay close attention to these practices to avoid risks that may occur. Hiring should be done on qualifications regardless of who they are. One major risk company’s face is sexual harassment. This is particularly important to discuss as it is serious and occur in a variety of circumstances and forms. The human resources department need to pay special attention to this and is responsible for keeping the Directors and Officers informed about changes and aspects of this risk. All accusations should be taken seriously. Alternative Dispute Resolutions should always be considered as some harassers maybe unaware that his or her behavior is offensive or constitutes as being sexual harassment or that their actions are harmful. Though this is not always an option it is advisable that Lowell Bradford, Chief Legal Counsel, be contacted in the case where an internal investigation has proven an accusation valid. Officers and Directors need to be aware when assessing each case and should be conscious and timely when seeking legal advice. ➢ China
With Chinese labor laws so laxly enforced, Riordan’s Human Resources Department in China has taken an active role in ensuring that the employees’ treatment abroad is equal to the standards set in the US. We promote human welfare by upholding the dignity of our employees with special emphasis on health and safety, labor laws, and fair compensation for work completed.
Corporate Assets ➢ Maintaining Corporate Image
Riordan’s reputation and identity are among its most valuable assets. Employees are expected to conduct themselves in a manner that is reflective of the company’s reputation, identity, and image both internally and externally. Anyone found to be responsible of unfavorably affecting the reputation or image of the company will be terminated. ➢ Intellectual Property
Our patents, trademarks, copyrights and trade secrets are also assets which are high on our list of risk liabilities. Our company logo is a very vital part of our trademark. This is more so because we are located in the United States and China. United States Intellectual property laws guard against the usage of patents and copyright materials without permission. This is highly regulated and actions are taken promptly against violators. China allows foreign companies to copyright, trademarks, and patents for their products. They also afford the same protection to International businesses as they do to Chinese companies. China recently amended their copyright laws to extent to the Internet and has imposed harsh penalties for copyright infringement that includes legal measures not previously listed under China Civil Procedure laws. Anyone found guilty of infringement are required to pay a standard fine of US $60,000 if damages cannot be calculated. China’s copyright holders or other right holders concerned also may apply to a people's court of China to obtain a desist order to alleged copyright violations even before an official hearing begins (Intellectual Property-China, 2001)
Riordan Manufacturing Inc.’s Officers and Directors can protect IP by upholding good record keeping, monitoring patents and trade secrets usage, carefully supervising research and development activities, and by analyzing and tracking competitors. Our contracts, nondisclosure agreements and non-compete agreements are also efficient ways of protecting our IP. Officers and Directors are urged to notify the legal department as soon as IP infringements are detected. ➢ Tangible Property
Tangible property within Riordan is anything the hands can be placed on such as machinery, testing materials, furniture, books, company vehicles, fixtures, leased equipment, products we produce, tools and other equipment used in business or used to earn income. In order to protect our tangible property rights, directors and officers needs to ensure that they have effective plans in place to keep our property as our own, and always ensure the equipment is in proper working order.

Liabilities and Compliance ➢ Enterprise Liability
Enterprise liability is a legal policy where individual entities can be held jointly liable for some actions based on the fact that they are a part of a shared enterprise. Enterprise liability is a form of secondary liability. One of our huge liability is the fact that Michigan had purchased a vendor developed software application and source code for the finance and accounting department but now that company is out of business. This provides a big issue because Riordan did not address the incompatibility in the Finance and Accounting system in Georgia and Michigan. An even bigger problem is that China’s F&A are tied to Michigan. If China is held liable for any situation, Riordan or at least the Michigan branch will also held liable for any recovery because they still manage China’s F&A. To address these issues and form a cohesive F&A at Riordan, we must transition Michigan’s and Georgia’s system into the F&A system used by San Jose. China must also be given their own F&A department and they must also utilize San Jose’s current system in order to minimize the enterprise liability for the company as a whole.

➢ Product Liability
Our products are the most important part of our organization. We take pride in the fact that the products we produce are beneficial to the success of different manufacturers, medical organizations, the government, and others. Our Quality Control department works vehemently to ensure that our products are produced to the highest regulatory standards to maintain our exceptional record of excellence. Due to our exceptional record in product development our marketing department has had no problem in promoting our company for new bids and contracts.
We encourage our employees to be original and creative in ideas that will encourage new business for the company. Directors and Officers need to pay close attention to suggestions made by employees and let it be known that the ideas submitted are considered the property of the company and not the individual. Product liability problems have become increasingly more important to manufacturers and marketing managers. Despite the fact that we strive to maintain good product quality our plants are not impervious to several types of liabilities. • The Albany, Georgia Plant
The Georgia plant manufactures plastic beverage containers for beverage makers and bottling companies. Helping to ensure the safety of consumer food, the United States Food and Drug Administration (FDA) carefully regulates the food and beverage packaging materials, including plastics for beverage bottles, before allowing them on the market. According to Section 102(2) of the Uniform Product Liability Act, product liability includes "all claims or action brought for personal inquiry, death, or property damage caused by the manufacture, design, formula, preparation, assembly, installation, testing, warnings, instructions, marketing, packaging, or labeling of any product (Product Liability, 2007)." We are particularly vulnerable to these regulations if proper manufacturing procedures are not followed by the plant. Officers and Director are urged to maintain accurate procedures set by regulators and the company in the manufacturing of all beverage containers. All product batches are to be tested for quality control and compliance purposes. Paying close attention to the rules and regulations not only protect us as a company but also protects the public at large. It is our responsibility to provide first-rate products that are safe and of the highest standards. If problems are detected during the testing stage, the Plant Directors should be notified and corrective steps are followed immediately to assure product quality. Failure to abide by the rules may result in strict tort liability suits against the company. • The Pontiac, Michigan Plant
The Michigan Plant manufactures custom plastic parts for the Department of Defense, Medical Organizations, Aircraft Manufacturers, and Automotive Parts Manufacturers. These customers as all come with a particular set of liable risks. Officers and Directors need to be particularly aware of the contracts and the requirements listed by these companies. Because these particular products are used as parts of safety mechanisms, live saving and medical procedures and parts for products used in important devices they need to reliable. Good record keeping and communication between the Directors, the plant managers and the clients are essential during the product’s manufacturing stages. These products are custom made to suit the particular company’s needs so making several samples for the client’s approval before it is produced ensures that’s what they want. Doing so help to reduce the product’s liability as suits may be file against the company for product defect. If there are any accusations made against the company concerning product liability, the legal department should be contacted promptly in order for them to assess the situations and recommend legal actions if any. • The Hangzhou, China Plant
The China plant produces plastic fan parts for our appliance manufacturers. Although China is an international subsidiary it adheres to the product requirements of the United States. All fan parts from the China plant is shipped to the U.S. They are required to be in compliance with the U.S. laws as the part is used as a component of a larger product (Completed Fan). Directors and Officers of the China plant need to pay close attention to the manufacturing process as it is very important that products are made with the proper materials and at the compliance levels of the U.S. The company is liable if parts are inconsistent and defective. Communication between the Product Development director and the Plant Manager is key to reducing the liabilities associated with products transported from China. Each shipment should be check by the Quality Control Department and defective batches should be reported and not be distributed to client. If ever a client complains about the product the Legal representative in the United States and China should be notified immediately and steps to rectify the situation should be followed. • Plants’ Liabilities
Directors and Officers of the plants are responsible for the safety of the employees, the plant, everything in it and the community. All plant employees should abide by all safety procedures and rules, anyone in violation of these rules will face disciplinary actions. Employees are urged to notify the plant’s senior officer of personnel who do not comply with the rules. The plant officer should do random checks of the safety procedure to minimize the employee’s risks of getting hurt while at the plant. The plant’s machinery should be checked and serviced on a regular basis to ensure that all equipments are functioning properly. This reduces the risk of employee injury or death, which would leave the company open for negligent tort liability.
All Environmental regulatory laws are to be followed to remain in compliance. The Environmental Protection Agency does random checks to ensure that plants are complying with the laws (See Chart A). All our plants are at risk of liabilities associated with air emissions, water and land pollution. A testing schedule should be made to maintain the required standards of pollutant dispense from the plants into the atmosphere. If the levels are found to be over the regulatory standards then the necessary steps that are required by law should be done in an immediate and effective manner. This would ensure that the company will pass inspections and testing done by the EPA. Storage containers that stores hazardous materials should be checked for leakage regularly to guard against water and land pollution. Necessary steps should be taken to address leaks as the company may face strict tort liabilities. This is important because staying in compliance not only protects the company but also protect the environment and the community. Please note that pollution associated with plants similar to ours causes respiratory, pulmonary and cardiovascular illness in the communities that they are located in. Therefore, we will be vulnerable for class action lawsuits, if safety measures are not pursued and demanded. Lastly, all visitors to any of our sites must be pre-approved; they must also wear proper safety equipment to minimize the risk of getting hurt. Following these simple safety guidelines will minimize our company being sued for preventive injuries. • China’s Regulatory Standards
The Ministry of Environmental Protection of the People's Republic of China is required by law to implement environmental policies and enforce environmental laws and regulations. It regulates water quality, ambient air quality, solid waste, soil, noise, etc. The World Health Organization has found that about 750,000 people die prematurely each year from respiratory problems in China. Our Chinese plant’s Officers and Directors needs to take all necessary steps to stay in compliance with Chinese environmental laws as this an obviously major issue for the Chinese community. Large penalties are given by the Chinese government if regulatory rules are broken; therefore the testing schedule should be followed to remain in compliance with Chinese laws. Riordan Manufacturing can be held liable for strict tort liability if standard levels are not met.

Summary

The Corporate Compliance Plan has been prepared as a guideline for the Directors and Officers of the legal and ethical business conduct. Though we cannot outline all legal and ethical issues that may arise good judgment and common sense are required by all to maintain a successful business. Discussions have already been conducted in the legal department to ensure that we use an alternative dispute resolution process to minimize the time and cost cases take during a litigation process. Mediation is in our favor because it is in fact less expensive and less time consuming. The Legal and Compliance department are always at hand to answer any questions you may have. All assets must be protected by employees and confidentiality is key in protecting our most valued products.

Chart A: The United States Environmental Protection Agency (EPA) uses the following AQI:
|Air Quality Index (AQI) Values |
|Levels of Health Concern |
|Colors |
| |
|0 to 50 |
|Good |
|Green |
| |
|51 to 100 |
|Moderate |
|Yellow |
| |
|101 to 150 |
|Unhealthy for Sensitive Groups |
|Orange |
| |
|151 to 200 |
|Unhealthy |
|Red |
| |
|201 to 300 |
|Very Unhealthy |
|Purple |
| |
|301 to 500 |
|Hazardous |
|Maroon |
| |
| |

Reference

Environmental Protecting Agency. (2009). Retrieved September 19, 2009 from http://www.epa.gov/airnow/aqi_tech_assistance.pdf

Intellectual Property-China. (2001, October 27). Retrieved October 9, 2009, from China Copyright Laws: http://www.wangandwang.com/china_copyrights.htm

Jennings, M. M. (2006). Business: Its legal, ethical, and global environment (7th ed.). . Mason, OH: Thompson.

Product Liability. (2007). Retrieved October 11, 2007, from Encyclopedia of Business, 2nd ed.: http://www.referenceforbusiness.com/encyclopedia/Per-Pro/Product-Liability.html

Riordan Manufacturing. (2004). Retrieved October 7, 2009 from

http://ecampus.phoenix.edu/secure/aapd/cist/VOP/Business/Riordan/Internet/IndexPort.htm…...

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Riordan Corporate Compliance Plan

...Riordan Corporate Compliance Plan Susan Holmes, Marcia Kelly, Peter Flores, Ronald Cox, Celeste Mellett, and Orlinda Watson, LAW/531 April 9, 2012 Instructor Name: Thane Messinger Understanding the position companies must take to protect the interests of investors and employees, the organization must have compliance plan in place. The compliance plan must address every possible liability that can bring financial and physical harm to the company. The organization must work with each department to understand the risks involved with each job. Knowing the risks and working to help the employees understand what those risks are and will help keep the employee minimizing risks of the organization. The compliance plan helps list the goals Riordan Manufacturing established to ensure the employees know the correct steps to comply with the laws and regulations. Legal Risk Exposure and Responses Traditionally, Riordan Manufacturing Company legal counsel interacts primarily with executive management and the board of directors to report on existing, pending, and probable litigation. Although this responsibility continues to be critical, it is imperative that there be an increased presence of legal counsel to the internal organization. It is important for counsel to act as an internal company consultant to help reduce legal risks. Activities include circulating existing legal risks status data, consulting internal management, acting as a sounding board for staff......

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