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Riordan Corporate Compliance Plan

LAW531

Professor John Huschen

May 23, 2011

Riordan Corporate Compliance Plan

Riordan Manufacturing is part of Riordan Industries; the company currently has around 550 employees and is worth $46 billion. “The company was founded by Dr. Riordan, a professor of chemistry, who obtained several patents relative to the processing polymers into high tensile strength plastic substrates” (Apollo Group, 2006). Dr. Riordan’s desire to become a successful business, reached new regions: Michigan, Georgia, and China.

Alternative Dispute Resolution

Alternative dispute resolution is part of Riordan Manufacturing’s new compliance plan and will be the primary method of resolving disputes versus litigation. In the event of problems, conflicts, or unfavorable action that may occur will evoke the need for alternative dispute resolution (ADR) measures. ADR should not be used to resolve personal issues in the workplace, only those that are work related or affect the production of work. In addition, ADR is a last resort measure and problems should be addressed by the immediate supervisor and employees are given avenues to report the dispute, which is by email and the company’s toll-free help line. The primary forms of ADR that Riordan Manufacturing will use are mediation and arbitration.

“Mediation is a form of negotiation in which a neutral third .party assists the disputing parties in reaching a settlement of their dispute” (Cheeseman, 2010, p 45) and arbitration is when “the parties choose an impartial third-party to hear and decide the dispute” (Cheeseman, 2010, p. 44). Employees at Riordan Manufacturing will attempt to mediate the conflict or issue before jumping straight to arbitration, to minimize the effects of arbitration. The mediation will occur with supervisors from different departments that will be able to not show favoritism to the plaintiff and defendant.

During the arbitration process, Riordan Manufacturing will use an arbitrator from the American Arbitration Association, which comprised of qualified individuals to be effective arbitrators. This will eliminate bias or favoritism when decisions cannot be properly made though immediate supervisors. “An arbitration agreement often describes the specific procedures that must be followed for a case to proceed to and through arbitration process. Arbitration is a last resort for any employee to choose and will not be taken lightly. If a decision is not reached through mediate in 48 hours, the employee has the right to start arbitration procedures and guidelines.

Enterprise and Product Liability

“Enterprise liability is a tort doctrine that seeks to hold all individuals or entities engaging in certain unsafe customer liable for any injuries that resulted from the use of that custom (Demand Media, 2011). The Committee of Sponsoring Organizations (COSO) of the Treadway Commission “is dedicated to guiding executive management and governance entities toward the establishment of more effective, efficient, and ethical business operations on a global basis” (Committee of Sponsoring Organizations, 2011). Riordan Manufacturing can use COSO to guide the company in implementing an internal control framework and the risk management team will take on the responsibility of Riordan Manufacturing’s enterprise liability with the assistance of COSO.

Product liability requires for Riordan Manufacturing to keep a log of various information that is no limited to: product warranty, defective issues, safety incidents, and design problems. Keeping a clearly log of this detailed information will come be useful in the event of any action against the company and give Riordan an in a legal dispute by keeping the valuable information. The company must be ready to adjust and update any safety labels and directions which would put the company in an unwanted position. In addition, design problems or inconsistences will be swiftly addressed and corrected before legal action can be taken against Riordan Manufacturing.

International Law

Riordan Manufacturing does fall under different international laws because the company owns a manufacturing plant in China. Majority of the time, many of the laws in the United States apply in an ethical manner. For example, the Fair Labor Standards Act, stops companies for hiring underage workers or what is deem “child labor” and to have a factory in a foreign country and participate in “child labor” is looked down upon and can affect the image of the company. Riordan must take extra precautions and inspect the China factory for poor labor conditions, wages of employees, and treatment of employees. This precaution could be in the form of team created to prevent events that will tarnish the name of the company.

Tangible and Intellectual Property

Tangible property is all the “real property and physically defined personal property such as building, goods, animals, and minerals” (Cheeseman, 2010, p. 739). Riordan Manufacturing takes tangible property very seriously and will go to extensive means to protect the assets of the company. Riordan Manufacturing will change the current controls in place by introducing a new standard and implementing new control measures. For starters, Riordan will require thorough background checks on employees with access to the high profile information and updated background checks performed twice a year. In addition, should an employee be found using the tangible assets of the company for personal reasons, this will lead to disciplinary action and/or termination of employment with the company.

Intellectual property is proportionately important to Riordan Manufacturing because of the company’s many ideas and patents that must be protected. The way that Riordan Manufacturing is protecting intellectual property is through trademarks, patents, and copyrights. This will decrease the likelihood of infringement and allow the company to stay competitive against other companies in the same industry.

Legal Forms of Business

Riordan Manufacturing must comply with various legal bodies to be a successful business and still be competitive. One legal body that Riordan must follow is the Occupational Safety and Health Administration (OSHA) because of the plastics and polymers the company works with in its factories. The company must stay compliant with federal (and state level) laws regarding the safety of the company’s workers and their health. Riordan must be compliant with the Clean Air and Water Act to stay an active business. This act was enacted over 40 years ago and it regulates the emissions of manufacturing plants. In addition, the act ensures that companies are also properly dispensing waste and not dumping the waste in illegal locations. Lastly, Riordan Manufacturing must be held accountable for accurate financial statements, which is regulated by the Security Exchange Commission (SEC).

Governance

Riordan Manufacturing prides itself on following company guidelines and insuring that employees are complying with the company’s guidelines. Governance of Riordan Manufacturing will oversee the company’s financial situation, company risk management, legalities involving Riordan, and governing of employees. Riordan Manufacturing must be willing to update policies and evolve to accommodate an ever-changing business world. Employees can only follow the guidelines and policies set before them. These policies and guidelines must be efficient, clear, concise, comprehensible, and readily available for all employees in paper form and on the company’s intranet.

Enterprise Risk Management

Enterprise risk management (ERM) is the considered to the processes and methods that Riordan will apply to navigate risks and opportunities for achieving company objectives. Riordan can use ERM to actively address the risks of the company and create an active plan to navigate the risk. Through ERM, Riordan can actively take part in understand the company’s risk and follow the progress towards minimizing the risk. In addition, ERM can be used to report activity for action plans and notify management of problems in the company’s ERM guideline.

References

Apollo Group (2006). Riordan Manufacturing Intranet. Retrieved May 23, 2011, from the University of Phoenix, LAW531, Course Materials.

Cheeseman, H.R. (20101). Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues (7th ed). Prentice-Hall: Upper Saddle River

Demand Media (2011). What is Enterprise Liability. Retrieved May 23, 2011, from the internet at http://www.ehow.com/about_6506091_enterprise-liability_.html

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