Law531_Riordan_Corporate_Finance_Plan

Riordan Corporate Compliance Plan Riordan Manufacturing is a company that is dedicated to providing the highest quality of plastic injection molding that is available in the industry. To continue this competitive advantage in the years to come, it is imperative that the Riordan leadership have a company compliance plan that specifically outlines the legal aspects and liabilities, as well as how to effectively handle any situations that may arise. This compliance plan shall address the prevention and management guidelines concerning alternative dispute resolutions, enterprise liability, product liability, international law, tangible and intellectual property, legal forms of business, and governance. As a corporation, it is the responsibility of the board of directors and the executive officers to make profitable decisions based off of adequate knowledge and carefully assessed risks within the enterprise. Alternative Dispute Resolution Riordan Manufacturing is focused on providing quality service to its customers and employees. If an employee or customer has a problem that could result in a legal matter, the company will diligently seek to resolve the matter as quickly as possible. To be proactive about maintaining the highest legal and ethical standards, Riordan will keep the independent law firm, Litteral & Finkel on a retainer for legal counsel. In effort to keep the costs to a minimum and maintain a sense of company flexibility and privacy, Riordan will require employees and vendors to sign contracts requiring the party to seek arbitration or mediation to settle the matter first. The employee or vendor must contact Riordan’s Chief Legal Counsel to file their complaint and then the company will contact the American Arbitration Association (AAA) for an arbitrator. If mediation is used, an agreed upon third party will be contacted. Mediation will be the preferred method to use for disputes between other businesses. Seeking alternative resolutions will save the company money in litigation costs, allow creative remedies, remain private, and be settled faster. Both parties will also be able to keep open lines of communication which may assist in Riordan keeping the customer’s business or the employee retained. Enterprise Liability The company produces products that impact many people and businesses. With various sites throughout the nation and in China, Riordan places itself in a position for enterprise liability in actions performed between them and their vendors and suppliers. Riordan strives to only conduct business with companies that hold themselves to high ethical and fiduciary standards. It is important that contracts are written to clearly state all expectations between Riordan and the other companies. Any breaches of contract or problems between other companies shall follow the guidelines based on the Uniform Commercial Code (UCC). There are prevention measures in place that protect the company against possible liabilities. The first measure comes from Riordan taking a proactive responsibility of itself. All Riordan employees are to acknowledge reading the employee handbook by signing and submitting the acknowledgement form to human resources upon hiring. This handbook gives an outline of the company policies and procedures that are designed to produce quality products. The company also provides mandatory training that consists of an orientation and Six Sigma guideline procedures that must be performed within 90 days of being hired. All supervisors and employees are expected to complete equal employment opportunity and sexual harassment workshops. Workshops on interviewing and conducting performance reviews will be given to management to ensure that they are able to lead employees efficiently and minimize the risk of legal torts. Negligence is a result of carelessness of the company and will not be tolerated. Quarterly performance appraisals will be given to employees within the manufacturing plants. The company is also concerned about the plastic production and disposal and its effect on the environment. To ensure compliance and show a sense of corporate responsibility, Riordan will conduct yearly audits of the plants to keep within the standards of the Clean Water Act. It is imperative that executive leadership assess the possible risk of harmful chemicals within Riordan’s waste disposal and hold the company to an ethical standard of ensuring that manufacturing processes are safe and within guidelines. Waiting until this becomes a legal matter contradicts the company’s mission and creates a negative view of the company which could result in lost profits. Product Liability A major concern for Riordan is the possibility of harmful chemicals getting into drinking water and harming the public. This particular matter is a current problem in China and the executive officers must rectify any possible liabilities before lawsuits occur. If Riordan were to be liable for the harm of others due to chemical exposure, there would be major consequences including costly international lawsuits. Utilizing the Six Sigma standard for production, shipping, and quality control helps alleviate the possibility of producing defective items or releasing harmful waste. If there are any problems that arise, particuraliy in China, all production at that plant will be halted until the harmful chemicals are alleviated and the matter is solved. If there are any product defects from any of the Riordan companies, the affected porducts will be recalled and replaced within a speedy time period. Riordan will conduct two yearly chemical and manufacturing audits to ensure that all working environments and processes meet the standards based on the Occupational Safety and Health Act (OSHA). This is important because if any federal laws of waste disposal or working conditions are violated the company will be held strictly liable. International Law It is important to not only maintain high standards in the United States, but also overseas. The China plant is subject to inspection for harmful chemical disposal and the company needs to have a proactive plan to minimize the possible liabilities. The company law firm Litteral & Finkel has practices across the globe, including on nearby China in Tokyo, Japan. Riordan will request that the firm send legal counsel to the plant for security measures just in case the Chinese Center of Disease Control (CCDC) inspects the facility. In the event that Riordan has a dispute with an overseas company concerning intellectual property, contracts, or trade transactions the company will seek arbitration through the International Chamber of Commerce (ICC) to assist in settling the dispute. Tangible Property Riordan maintains a number of tangible property including raw materials, computer equipment, plastics technology, office supplies, and transportation vehicles. All of these items are eligible for company compensation if stolen, damaged or destroyed. The items are recorded using a computer inventory system upon the company gaining its possession. Two separate inventories will take place throughout the year to keep track of the property and its relation to the output and profits. To protect the property, particularly the research and development technology, the company will require employees to sign nondisclosure agreements and have copies of copyrights and patents readily available to any outside businesses. Intellectual Property Riordan’s intellectual property consists of patented trade secrets developed by the research and development team in San Jose, California. To protect the company’s property, all employees must undergo a criminal background check and sign nondisclosures and covenant-not-to-compete clauses within the contracts upon being hired with Riordan. Independent contractors, such as engineers, must also sign nondisclosure agreements. It is also necessary for the executive board to retain legal counsel to ensure that all patents and trademarks, such as the Riordan logo, stay up-to-date. This is to protect the company from any other businesses attempting to profit from the good name and reputation of Riordan. Legal Forms of Business As a profit corporation, Riordan is a legal entity in itself and can sue or be sued under the company name as well as hold titles to property. The corporation possesses limited liability for shareholders, continuity, unlimited duration, and centralized management. The company adheres to business practices based on the Model Business Corporation Act (MBCA) because of its liberal and management latitude for corporations. Riordan is incorporated in San Jose, California and consists of shareholders that elect the Board of Directors (BOD). The BOD selects chief executives to manage the operations of the company. The executive officers will be held to a fiduciary responsibility of conducting business. They are required to run the company with best intentions and not for personal gain at the company’s expense. Under Sarbanes-Oxley Act (SOX), the penalties for violating truthful financial audit reporting and business practices can include between one to five million dollars in penalties and require ten to twenty years in prison. The Chief Executive Officer must review and certify that the reports are accurate. Any information that is falsely certified will result in the penalties determined by SOX. There is a limited liability attached to shareholders as well. If shares are not paid for, the company has legal rights to obtain creditors to redeem personal assets for payment of the shares. Riordan must also adhere to all tax laws according the specific states that the manufacturing plants reside. The corporation must pay taxes on the net earnings and the shareholders must pay taxes on dividends if they are paid out. Governance Governance is defined as a guidance or control of an activity to meet a specific objective (Fox, 2008). Corporate governance is necessary to run Riordan effectively and to make a profit. It keeps employees and officers from engaging in activities that may bring harm to the company. The CEO is responsible for ensuring that all employees are knowledgeable of and practice acceptable standards and procedures within the work environment. The employee handbook serves as one type of governance that provides written guidelines for reference. More importantly, the company’ s enterprise risk management process calculates potential risks that may effect the company and determines to what extent the risk will be taken. The underlying goal is to make a profit for the shareholders and the careful steps planned for liabilities and risks will greatly determine the future and profit of the company. As long as Riordan adheres to SOX guidelines regarding financial and auditing practices along with the Generally Accepted Accounting Principles (GAAP), the company should be able to realize a substantial profit, competitive advantage, and longevity. Conclusion The executive management's identification and assessment of possible risks and liabilities show that the company is committed to the Riordan mission that sets it apart from other companies. Maintaining an ethical and fiduciary responsibility of leadership will keep the company in a positive standing with customers worldwide. A proactive and careful consideration of all management situations and liabilities will result in continued profits and shareholder satisfaction. Reference Fox, N., & Ward, K. (2008). What governs governance, and how does it evolve' The sociology of governance-in-action. The British Journal Of Sociology, 59(3), 519-538. Retrieved from MEDLINE with Full Text database. Jennings, M.M. (2006). Business: Its Legal, Ethical, and Global Environment. Retrieved from University of Phoenix eBook Collection database. University of Phoenix. (2010). Virtual Organization: Riordan Manufacturing. Retrieved January 21, 2010 from https://ecampus.phoenix.edu/secure/aapd/cist/VOP/Busin ess/Riordan/Internet/IndexPort.htm