Later On

A blog written for those whose interests more or less match mine.

Archive for the ‘Business’ Category

White House in turmoil shows why Trump’s no CEO

leave a comment »

Bert Spector, Associate Professor of International Business and Strategy at the D’Amore-McKim School of Business, Northeastern University, writes at The Conversation:

Throughout the 2016 presidential campaign, Donald Trump made much of his business experience, claiming he’s been “creating jobs and rebuilding neighborhoods my entire adult life.”

The fact that he was from the business world rather than a career politician was something that appealed to many of his supporters.

It’s easy to understand the appeal of a president as CEO. The U.S. president is indisputably the chief executive of a massive, complex, global structure known as the federal government. And if the performance of our national economy is vital to the well-being of us all, why not believe that Trump’s experience running a large company equips him to effectively manage a nation?

Instead of a “fine-tuned machine,” however, the opening weeks of the Trump administration have revealed a White House that’s chaotic, disorganized and anything but efficient. Examples include rushed and poorly constructed executive orders, a dysfunctional national security team and unclear and even contradictory messages emanating from multiple administrative spokespeople, which frequently clash with the tweets of the president himself.

Senator John McCain succinctly summed up the growing sentiment even some Republicans are feeling: “Nobody knows who’s in charge.”

So why the seeming contradiction between his businessman credentials and chaotic governing style?

Well for one thing, Trump wasn’t a genuine CEO. That is, he didn’t run a major public corporation with shareholders and a board of directors that could hold him to account. Instead, he was the head of a family-owned, private web of enterprises. Regardless of the title he gave himself, the position arguably ill-equipped him for the demands of the presidency.

Public accountability

Several years ago, I explored the distinction between public and private companies in detail when the American Bar Association invited me to write about what young corporate lawyers needed to understand about how business works. Based on that research, I want to point to an important set of distinctions between public corporations and private businesses, and what it all means for President Trump.

Public corporations are companies that offer their stock to pretty much anyone via organized exchanges or by some over-the-counter mechanism. In order to protect investors, the government created the Securities and Exchange Commission (SEC), which imposes an obligation of transparency on public corporations that does not apply to private businesses like the Trump Organization.

The SEC, for example, requires the CEO of public corporations to make full and public disclosures of their financial position. Annual 10-K reports, quarterly 10-Q’s and occasional special 8-K’s require disclosure of operating expenses, significant partnerships, liabilities, strategies, risks and plans.

Additionally, an independent firm overseen by the Public Company Accounting Oversight Board conducts an audit of these financial statements to ensure thoroughness and accuracy.

Finally, the CEO, along with the chief financial officer, is criminally liable for falsification or manipulation of the company’s reports. Remember the 2001 Enron scandal? CEO Jeffrey Skilling was convicted of conspiracy, fraud and insider trading and initially sentenced to 24 years in prison.

Internal governance

Then there is the matter of internal governance.

The CEO of a public company is subject to an array of constraints and a varying but always substantial degree of oversight. There are boards of directors, of course, that review all major strategic decisions, among other duties. And there are separate committees that assess CEO performance and determine compensation, composed entirely of independent or outside directors without any ongoing involvement in running the business.

Whole categories of CEO decisions, including mergers and acquisitions, changes in the corporation’s charter and executive compensation packages, are subject to the opinion of shareholders and directors.

In addition, the 2010 Dodd-Frank Act requires – for now – regular nonbinding shareholder votes on the compensation packages of top executives.

And then there’s this critical fact: . . .

Continue reading.

Written by LeisureGuy

22 February 2017 at 1:28 pm

The Pruitt Emails: E.P.A. Chief Was Arm in Arm With Industry

leave a comment »

The GOP, for whatever reason, was determined that Pruitt’s confirmation vote be held before his emails were released (which would have involved a wait of less than a week). Now we see why.

Coral Davenport and Eric Lipton report in the NY Times:

During his tenure as attorney general of Oklahoma, Scott Pruitt, now the Environmental Protection Agency administrator, closely coordinated with major oil and gas producers, electric utilities and political groups with ties to the libertarian billionaire brothers Charles G. and David H. Koch to roll back environmental regulations, according to over 6,000 pages of emails made public on Wednesday.

The publication of the correspondence comes just days after Mr. Pruitt was sworn in to run the E.P.A., which is charged with reining in pollution and regulating public health.

“Thank you to your respective bosses and all they are doing to push back against President Obama’s EPA and its axis with liberal environmental groups to increase energy costs for Oklahomans and American families across the states,” said one email sent to Mr. Pruitt and an Oklahoma congressman in August 2013 by Matt Ball, an executive at Americans for Prosperity. That nonprofit group is funded in part by the Kochs, the Kansas business executives who spent much of the last decade combating federal regulations, particularly in the energy sector. “You both work for true champions of freedom and liberty!” the note said.

Mr. Pruitt has been among the most contentious of President Trump’s cabinet nominees. Environmental groups, Democrats in Congress and even current E.P.A. employees have protested his ties to energy companies, his efforts to block and weaken major environmental rules, and his skepticism of the central mission of the federal agency he now leads.

An Oklahoma judge ordered the release of the emails in response to a lawsuit by the Center for Media and Democracy, a liberal watchdog group. Many of the emails are copies of documents previously provided in 2014 to The New York Times, which examined Mr. Pruitt’s interaction with energy industry players that his office also helps regulate.

The companies provided him draft letters to send to federal regulators in an attempt to block federal regulations intended to regulate greenhouse gas emissions from oil and gas wells, ozone air pollution, and chemicals used in fracking, the email correspondence shows.

They held secret meetings to discuss more comprehensive ways to combat the Obama administration’s environmental agenda, and the companies and organizations they funded repeatedly praised Mr. Pruitt and his staff for the assistance he provided in their campaign.

The correspondence points to the tension emerging as Mr. Pruitt is now charged with regulating many of the same companies with which he coordinated closely in his previous position. As attorney general of Oklahoma, Mr. Pruitt took part in 14 lawsuits against major E.P.A. environmental rules, often in coordination with energy companies such as Devon Energy, an Oklahoma oil and gas producer, and American Electric Power, an Ohio-based electric utility.

The emails show that his office corresponded with those companies in efforts to weaken federal environmental regulations — the same rules he will now oversee.

“Please find attached a short white paper with some talking points that you might find useful to cut and paste when encouraging States to file comments on the SSM rule,” wrote Roderick Hastie, a lobbyist at Hunton & Williams, a law firm that represents major utilities, including Southern Company, urging Mr. Pruitt’s office to file comments on a proposed E.P.A. rule related to so-called Startup, Shutdown and Malfunction Emissions.

The most frequent correspondence was with Devon Energy, which has aggressively challenged rules proposed by the E.P.A. and the Department of Interior’s Bureau of Land Management, which controls drilling on federal lands — widespread in the west. In the 2014 election cycle, Devon was one of the top contributors to the Republican Attorneys General Association, which Mr. Pruitt led for two years during that period.

In a March 2013 letter to Mr. Pruitt’s office, William Whitsitt, then an executive vice president of Devon, referred to a letter his company had drafted for Mr. Pruitt to deliver, on Oklahoma state stationery, to Obama administration officials. Mr. Pruitt, meeting with White House officials, made the case that the rule, which would rein in planet-warming methane emissions, would be harmful to his state’s economy. His argument was taken directly from Mr. Whitsitt’s draft language.

“To follow up on my conversations with Attorney General Pruitt and you, I believe that a meeting — or perhaps more efficient, a conference call — with OIRA (the OMB Office of Information and Regulatory Analysis) on the BLM rule should be requested right away,” Mr. Whitsitt wrote. “The attached draft letter (or something like it that Scott is comfortable talking from and sending to the acting director to whom the letter is addressed) could be the basis for the meeting or call.”

The letter referred to . . .

Continue reading.

Written by LeisureGuy

22 February 2017 at 11:00 am

SEC Nominee Has Represented 8 of the 10 Largest Wall Street Banks in Past Three Years

leave a comment »

It should be acknowledged that Barack Obama also went out of his way to pick a Wall Street lawyer, Mary Jo White, to head the SEC. It does seem that whether the president is a Democrat or Republican, Wall Street controls the part of the Executive branch that oversees Wall Street: the corporate takeover of the U.S. Government.

Pam Martens and Russ Martens report in Wall Street on Parade:

President Trump’s nominee to head the Securities and Exchange Commission, Walter J. (Jay) Clayton, a law partner at Sullivan & Cromwell, has represented 8 of the 10 largest Wall Street banks as recently as within the last three years.

Clayton’s current resume at his law firm is somewhat misleading. It lists under “Representative Engagements” in “Capital Markets/Leveraged Finance” the following:

Initial public offering of $25 billion by Alibaba Group Holding Limited;

Initial public offering of $190 million by Moelis & Company;

Initial public offering of $2.375 billion by Ally Financial.

All three of the above IPOs occurred in 2014 – less than three years ago. A quick check of the prospectuses for the IPOs that were filed with the Securities and Exchange Commission shows that Clayton, as a law partner at Sullivan & Cromwell, was representing the underwriters in the offering, which include the largest Wall Street banks. Put the three deals together and you have 8 of the 10 largest banks on Wall Street being represented by the SEC nominee within the past three years. These are the same banks that are serially charged by the SEC for increasingly creative means of fleecing the public.

If that’s not enough to conflict Clayton out of consideration to Chair the SEC post, then conflicts of interest have lost all meaning within the legal lexicon of the United States.

According to the IPO for Alibaba, the underwriters were Credit Suisse, Deutsche Bank, Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Citigroup. The prospectus from Alibaba reads as follows: . ..

Continue reading.

Written by LeisureGuy

22 February 2017 at 10:22 am

Reflecting On One Very, Very Strange Year At Uber

leave a comment »

Susan J. Fowler has a very interesting post in her blog. It begins:

As most of you know, I left Uber in December and joined Stripe in January. I’ve gotten a lot of questions over the past couple of months about why I left and what my time at Uber was like. It’s a strange, fascinating, and slightly horrifying story that deserves to be told while it is still fresh in my mind, so here we go.

I joined Uber as a site reliability engineer (SRE) back in November 2015, and it was a great time to join as an engineer. They were still wrangling microservices out of their monolithic API, and things were just chaotic enough that there was exciting reliability work to be done. The SRE team was still pretty new when I joined, and I had the rare opportunity to choose whichever team was working on something that I wanted to be part of.

After the first couple of weeks of training, I chose to join the team that worked on my area of expertise, and this is where things started getting weird. On my first official day rotating on the team, my new manager sent me a string of messages over company chat. He was in an open relationship, he said, and his girlfriend was having an easy time finding new partners but he wasn’t. He was trying to stay out of trouble at work, he said, but he couldn’t help getting in trouble, because he was looking for women to have sex with. It was clear that he was trying to get me to have sex with him, and it was so clearly out of line that I immediately took screenshots of these chat messages and reported him to HR.

Uber was a pretty good-sized company at that time, and I had pretty standard expectations of how they would handle situations like this. I expected that I would report him to HR, they would handle the situation appropriately, and then life would go on – unfortunately, things played out quite a bit differently. When I reported the situation, I was told by both HR and upper management that even though this was clearly sexual harassment and he was propositioning me, it was this man’s first offense, and that they wouldn’t feel comfortable giving him anything other than a warning and a stern talking-to. Upper management told me that he “was a high performer” (i.e. had stellar performance reviews from his superiors) and they wouldn’t feel comfortable punishing him for what was probably just an innocent mistake on his part.

I was then told that I had to make a choice: (i) I could either go and find another team and then never have to interact with this man again, or (ii) I could stay on the team, but I would have to understand that he would most likely give me a poor performance review when review time came around, and there was nothing they could do about that. I remarked that this didn’t seem like much of a choice, and that I wanted to stay on the team because I had significant expertise in the exact project that the team was struggling to complete (it was genuinely in the company’s best interest to have me on that team), but they told me the same thing again and again. One HR rep even explicitly told me that it wouldn’t be retaliation if I received a negative review later because I had been “given an option”. I tried to escalate the situation but got nowhere with either HR or with my own management chain (who continued to insist that they had given him a stern-talking to and didn’t want to ruin his career over his “first offense”).

So I left that team, and took quite a few weeks learning about other teams before landing anywhere (I desperately wanted to not have to interact with HR ever again). I ended up joining a brand-new SRE team that gave me a lot of autonomy, and I found ways to be happy and do amazing work. In fact, the work I did on this team turned into the production-readiness process which I wrote about in my bestselling (!!!) book Production-Ready Microservices. 

Over the next few months, I began to meet more women engineers in the company. As I got to know them, and heard their stories, I was surprised that some of them had stories similar to my own. Some of the women even had stories about reporting the exact same manager I had reported, and had reported inappropriate interactions with him long before I had even joined the company. It became obvious that both HR and management had been lying about this being “his first offense”, and it certainly wasn’t his last. Within a few months, he was reported once again for inappropriate behavior, and those who reported him were told it was still his “first offense”. The situation was escalated as far up the chain as it could be escalated, and still nothing was done.

Myself and a few of the women who had reported him in the past decided to all schedule meetings with HR to insist that something be done. In my meeting, the rep I spoke with told me that he had never been reported before, he had only ever committed one offense (in his chats with me), and that none of the other women who they met with had anything bad to say about him, so no further action could or would be taken. It was such a blatant lie that there was really nothing I could do. There was nothing any of us could do. We all gave up on Uber HR and our managers after that. Eventually he “left” the company. I don’t know what he did that finally convinced them to fire him.

In the background, there was a game-of-thrones political war raging within the ranks of upper management in the infrastructure engineering organization. It seemed like . . .

Continue reading.

Written by LeisureGuy

21 February 2017 at 5:33 pm

Posted in Business, Daily life, Law

Here’s what’s driving lawmakers working to legalize recreational pot in 17 more states

leave a comment »

Kurtis Lee reports in the LA Times:

When Massachusetts voters overwhelmingly approved a ballot measure in November to legalize recreational marijuana, Josh Miller saw this as a sign that his time had finally arrived.

The Rhode Island state senator has a reputation among colleagues as a cannabis crusader — a battle that, so far, he’s lost. For the last three years, Miller introduced legislation to legalize recreational pot, and for the last three years, his efforts have died in committee hearing rooms.

But now, in a turnaround, some of Miller’s colleagues are signaling an interest in legalized weed — and raking in the tax dollars that come with it.

“We now have the wind at our backs,” said Miller, who introduced his latest pro-pot bill last week. “Seeing our next door neighbor legalize it should help us — a lot.”

In the fall, three other states joined Massachusetts in passing recreational pot ballot measures: California, Maine and Nevada. Four other states — Alaska, Colorado, Oregon and Washington — have legalized marijuana through ballot initiatives as well.

But this year lawmakers in 17 states — Connecticut, Minnesota and Hawaii among them — have become emboldened enough to introduce more than two dozen measures to legalize recreational pot for adults and tax its sale. The experiences of Colorado and Washington state — the first two states to legalize the drug still considered illegal under federal law — drive the trend.

This month, Colorado officials released a report showing the state brought in $200 million in tax revenue last year. Washington raked in even more — about $256 million. Most of the money goes toward public school systems.

“Our focus is on revenue and bringing in cash to the state as legalization becomes more and more widespread,” said Mary Washington, a state delegate from Maryland who introduced a bill recently that would tax marijuana like alcohol. She estimates the state could net $165 million a year.  (California estimates that legalized recreational marijuana will bring in about $1 billion a year in state tax revenue.)

Washington, whose district is in Baltimore, has not sponsored pot legislation in the past, but has been a supporter of legalization. She’s viewed the issue from a criminal justice perspective after witnessing young black men in her community continuously arrested for low-level possession.

Now, with individuals able to carry up to an ounce of marijuana legally in some states, along with the cash generated from sales, she felt that it’s time to join the broader legalization movement. The success of Maryland lawmakers in passing medicinal marijuana legislation in 2014 also makes her optimistic.

“These conversations need to be happening now, in state legislatures,” Washington said, adding that even with voter- approved ballot measures, lawmakers are often tasked with hashing out laws that regulate sales. “Why not get it done now? We’re elected to do a job. More and more states are moving in this direction.”

The legalization of medical marijuana took a similar path.

Six states passed ballot measures approving medicinal pot from the mid-1990s until 2000. It wasn’t until that year when Hawaii became the first to do so through the Legislature. Since 2004, nearly twice as many states have adopted medical laws through legislatures — 13 — compared to seven passed through ballot initiatives.

Mason Tvert, a spokesman for the Washington, D.C.-based Marijuana Policy Project, a group dedicated to ending cannabis prohibition nationwide, said voters led the way on legalizing cannabis for medicinal use before lawmakers woke up.

“Voters saw through the government’s reefer madness and led the way on medical marijuana. Those laws inspired citizens in other states to demand action from their elected officials, who could now see that such laws were not just popular, but possible,” Tvert said. “The same thing is now happening with broader legalization.”

For wary lawmakers, polling is helpful as public approval of legal marijuana is increasing, similar to the country’s quick shift in favor of same-sex marriage over the years.

A Pew Research Center survey from October showed that 57% of Americans believe marijuana should be legalized, compared to 37% who believe it should remain illegal. By contrast, a similar Pew poll in 2006 showed almost the opposite — 60% believed it should be illegal, compared with 32% who supported legalization. . .

Continue reading.

Written by LeisureGuy

21 February 2017 at 3:11 pm

The magnitude of one’s ignorance: How ink is made

leave a comment »

I am constantly being made aware of how much I do not know. Take, for example, this brief video on how ink is made. I had no idea…

Written by LeisureGuy

21 February 2017 at 12:36 am

Tech still does not take discrimination seriously, allowing it to flourish

leave a comment »

Klint Finley writes in Wired:

The tech industry isn’t big on dress codes, employee handbooks, or rules. The Silicon Valley management philosophy is simple: Hire talented coders, give them tools to do their jobs, and get out of their way. The best coders should be rewarded, and those who just can’t hack it should be let go.

The problem is that, all too often, workplace problems boil down to more than just code. Yesterday widely respected programmer Susan J. Fowler revealed in a blog post that she quit her job at the transportation company Uber last year after facing sexual harassment, discrimination, and, perhaps most worryingly, a corporate culture that let all that harassment and discrimination slide.

One of the most striking things about the allegations is how unsurprising they are. Uber has always had a cavalier attitude about rules and regulations, so it’s easy to imagine that attitude extending to sexual harassment and employment laws in general. But the issue goes far beyond Uber. Stories like Fowler’s are common in the tech industry, which has never quite gotten a handle on how to hold employees accountable for anything other than “performance.”

Fowler, a frequent speaker at conferences and author of the book Production-Ready Microservices, claims that shortly after she joined Uber, her manager propositioned her. She reported him to Human Resources, she writes, but was told that because it was the manager’s first offense, no action would be taken. She had the choice between staying on his team, where she was allegedly told that she might receive a poor performance review in retaliation, or transfer to another team. She chose to transfer.

Fowler writes that she later found out it was not this manager’s first offense at all, and that although he eventually left the company, he wasn’t disciplined—even after more women had reported him for sexual harassment.

That was just the beginning. Fowler describes a dysfunctional, Game of Thrones-esque company culture, with management admitting that she was given a bad performance review for non-work related reasons, and, ultimately, a manager threatening to fire her if she continued reporting discrimination to the HR department. A common refrain, each time she complained to HR about a harasser, was that the person in question was a “high performer.”

Uber didn’t respond to our request for comment, but The New York Times reports that CEO Travis Kalanick has promised an investigation. Media mogul and Uber board member Arianna Huffington promised on Twitter that she will work with Uber’s chief of human resources, Liane Hornsey, on the investigation.

Uber has a troubled history on gender relations. In 2014, Kalanick told GQ that he called the company “Boob-er” because it has made him more attractive to women. That same year, the company ran an ad in France promising to pair customers with “hot chick” drivers. When journalist Sarah Lacy suggested that this sort of sexism was a problem, Uber senior vice president Emil Michael suggested digging up dirt on her to ruin her reputation, according to BuzzFeed. Kalanick tweeted that Michael’s comments didn’t represent Uber’s views, but Michael kept his job.

The company isn’t the only tech darling to face these kind of problems, though. Fowler’s story retraces what has become a familiar sequence of events: A female employee complains about sexual harassment and/or discrimination to HR. The company takes no action. The employee takes to the internet to complain. Media attention follows. The company promises to investigate. Sometimes someone resigns in scandal. But the industry itself stays the same.

In 2014, a former employee of the code hosting and collaboration site GitHub claimed one of the company’s programmers sexually harassed her, and that one of the founder’s wives had also repeatedly harassed her—despite multiple reports to the company’s HR department. After a flurry of media coverage, . . .

Continue reading.

Written by LeisureGuy

20 February 2017 at 2:09 pm

%d bloggers like this: