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Riordan Manufacturing, Inc. Corporate Compliance Plan

Law 531

January 24, 2012
Prof. Dunn MBA, JD

Riordan Manufacturing, Inc. Corporate Compliance Plan

Compliance Recently under the “Responsible Officer Doctrine”, the law has reacted against unethical officers and directors by making them potentially liable for their decisions. Implementing a Corporate Compliance plan will protect the company as it complies with federal law in an effort to monitor its commitment to upholding values and mission statements. The management team will also promote ethical commitment throughout management and operations. Since Riordan may be affected by government contracts law, participation in the Medicare and Medicaid program, and environmental law, Baker states that it is imperative to implement such plan immediately. Although unlikely, the company also faces threats from changes in intentional violation of copyright law and RICO claims rooted on espionage (p. 1).
Riordan Manufacturing As Fortune 1000 international industry leaders in plastic manufacturing, Riordan must implement a plan that will protect help protect its assets and investments. With an impeccable research and development team consistently exceeding expectations the company has managed to use its patented polymer material technique to help customers solve evolving needs for innovative products. With rigorous controls and reasonable pricing the company has had success in manufacturing plastic bottles, fans, heart valves, medical stens and custom plastic parts. Fundamentals of Riordan quality management systems have exceeded ISO 9000 standards which lends the company $46 million of projected annual revenue. Success of the company will consequently lead to the industry benchmarking its effective complex processes (Apollo Group, Inc., 2004). Wholly owned by Riordan Industries, Riordan Manufacturing has facilities on every coast in the US with recent expansion to China to help fulfill international orders that meets their high standards and attitudes to providing outstanding customer service that lead to long-term relationships (Apollo Group, Inc., 2004). The plastic fan parts facility in Michigan moved to China and was retooled for the manufacture of custom plastic parts. Discussion regarding the anticipated new facility in Shanghai replacing the China operation in five years should remain until due diligence is done. Alternative dispute resolution is the best form to resolve legal issues. Since Riordan is a Fortune 1000 company it is smart to stay away from formal trials or any part of litigation. Negative coverage in the media would abolish the communities’ positive image of the company that they have worked so hard to earn and maintain as stated in the mission and values statements. Integrity of management is imperative to Riordan’s immense success. It is important to hold directors accountable through this plan. According to Muschette, “The proper management of a company’s business is the responsibility of the directors and officers of the company” (p.1). In earlier times the courts were reluctant to impose onerous standards of care and skill on directors and were willing to impose liability only when directors had been grossly negligent. However, due to the fact that directors are increasingly professionals with a wider array of resources available to them the courts have begun to reassess the standard of care expected of a director” (Muschette 1). The Companies Act inducted in 2004 amongst concerns regarding accountability and transparency outlines the following: to act honestly and in good faith with a view to the best interest of the company and to exercise the care diligence and skill that a reasonably prudent person would exercise in comparable circumstances, including but not limited to the general knowledge, skill and experience of the director or officer (2). There are however defenses available for executives should they face any personal liability. Legally Riordan is required to produce quality products that respect the environmental protection laws. The company faces many regulations that are necessary to continue earning profit including but limited to relying on the Chemical Inspection & Regulation Service. According to CLP, Advice for EU Manufactures and Importers of Chemicals and Preparations doing business in China are as follows: • Prior to manufacture/import, M/I shall pre-register/register substances manufactured /imported over 1 ton per year with the European Chemical Agency (ECHA); • Companies who import/manufacture substances exceeding 1t per year for the first time after 1st December 2008 can complete a 'late pre-registration'; • EU importers will be exempt from REACH registration if their non-EU suppliers have registered by appointing REACH Only Representative(OR); however, importers need to confirm with their suppliers' OR that they are on the inventory of importers and their tonnage and uses are covered by the registrations of OR. This can be done by asking for REACH Certificate of Compliance from the only representative. Click here to find more REACH compliance tips for EU importers; • EU importers shall ask for or prepare the latest Safety Data Sheets according to REACH and CLP regulation if the substances or preparations meet the criteria for classification as hazardous; • M/I shall communicate information about the safe use of chemicals (risk management measures) along the supply chain in the format of SDS/exposure scenario; M/I may fulfill more obligations such as authorization and restriction under REACH. Recently there has been increased pressure to produce more green products. This is a current trend in the plastic industry that Riordan will continue to invest research and development funding. Staying current with environmental law legislation is integral to the companies’ ability to continue to have a profitable business. Strict guidelines are set to ensure management and employees understand and obey the laws. First, we will implement compliance standards and procedures effective receipt of the plan. The program will then be executed with an in depth understanding of the compliance program as a whole. Authority will be delegated by each level of management with standards and methods being driven by c-level executives. Effective immediately training programs will be implemented to help all employees stay up to date with policy changes. Systems will have scheduled monitoring and will be auditing thoroughly by management. This plan is strictly enforced and all necessary disciplinary actions will be followed. Responding to company issues will be regulated according to the employee handbook which references the companies’ corrective actions. The Employee Handbook holds all employees responsible for carrying out the policies set forth in this compliance policy. In conclusion, this compliance policy is ultimately best for the legal and financial health of this company that benefits all of its stakeholders. Policy changes and strict enforcement to follow all environmental regulation legislation upholding Riordan’s mission and value statements is imperious. With all this compliance policy instated, the company has a bright future ahead following through on their promise to deliver quality products, a big promise.
References
Apollo Group, Inc.. (2004). Riordan Manufacturing [Multimedia]. Retrieved from Apollo Group, Inc., LAW531 website.
CIRS-REACH Compliance. (2011). Retrieved from http://www.cirs-reach.com/CLP/CLP_Compliance.html
PROTECTING OUTSIDE DIRECTORS. (2009). Retrieved from http://www.troutmansanders.com/files/FileControl/8c65f8dc-a20f-43ec-87c1-93a599185d07/7483b893-e478-44a4-8fed-f49aa917d8cf/Presentation/File/hc-pro.pdf

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