Business and Corporate Compliance Law

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In order to increase its productivity and monitor its progress, Riordan organization needs to devise a compliance plan that is customized to suit the organization’s field of production. Riordan’s vigorous expansion may be attributed to its mission, vision, and value statements. These statements concentrate on four areas namely, customer management, development of long-term relationships with stakeholders, innovative employees, and sustaining of future growth. Innovative employees can devise effective solutions to customer problems while minimizing production line defects if a proper compliance plan is set.

Riordan’s mission statement therefore aligns with its goal of nurturing excellent relationship with employees and customers. To achieve this, the management has to demonstrate leadership and integrity and act as role models for them to be emulated by the employees. This ensures that the organization is able to promote an environment with ethical business practices and compliance to ethical standards. The purpose of this paper is to prepare a corporate compliance plan that will be used to manage the legal liability of Riordan manufacturing. It addresses international law, company assets and intellectual property, governance issues and internal controls.

Overview of the Compliance Plan

Corporate compliance can be defined as the adherence to ethical standards that are set in an organization. The mission behind the establishment of Riordan corporate compliance plan is to ensure that the work force complies with the rules and regulations, including state programs, security requirements, social ethics, and corporate governance. Riordan compliance plan sets the principles to be followed by both the management and workforce in ensuring that high ethical standards are maintained (University of Phoenix, 2003).

These principles also ensure that the company maintains its core values, honesty, and integrity in all its dealings. It is the responsibility of every company to ensure that all the company activities are conducted according to ethical business practices. The first step in achieving this is to understand the compliance plan. Every stake holder at Riordan must carry out his responsibilities and conduct activities in accordance to the principles set in the plan. Similarly, the workforce must carryout their responsibilities according to the ethical standards and it is their responsibility to report any violations of the principles which they may witness. Every employee should understand that failure to comply with this plan attracts a disciplinary action which may include termination of the employment contract. The disciplinary action to be applied depends on the circumstances surrounding a particular situation.

Violations of the Plan

If an employee is accused of violating the plan, he will first be given a chance to prove his innocence and present the events of the case before a disciplinary action is agreed upon. Some of the actions that may be termed as a violation of the plan include but not limited to violation of the company policy, request for others to violate the company’s policy, failure to report a violation of the company policy, and failure to take part in an investigation related to a violation of the company policy. it is worth noting that, violation of any of the company’s policies may not only result in disciplinary actions being taken against the individual, but may also result in civil liabilities for both the company and the individual who violated the policy. This implies that the compliance plan is a very crucial document for Riordan manufacturing and lack of it may result in civil problem.

Certificate of Compliance

The compliance plan will be certified on an annual basis by the financial officers. These officers must be aware of the compliance plan and they must comply with the Riordan’s principles of ethical behavior. Likewise, the employees are expected to certify their knowledge and understanding of the compliance plan regularly. New employees will be introduced to the plan and given a copy of it and will also be warned against any violation to the compliance of the plan, which attracts disciplinary action.

Components of the Plan

Internal Control

According to the Committee of sponsoring Organizations of the Treadway Commission (COSO), most companies rely on the Enterprise Risk Management (ERM) framework to monitor their internal control (Flaherty & Maki, 2004). Internal control covers five main components: risk assessment, control environment, information and communication, control activities, and last but not least monitoring. According to COSO, internal control is a process that is overseen by a company’s board of directors and the management team for the purpose of achieving business objectives in an effective manner. This includes the compliance with set laws, regulations, and state programs (Applegate, 1999). It can also be defined as a means to an end that is affected by people in all departments within an organization.

It is the responsibility of the Corporate Executive Board to ensure that adequate internal risk management systems are established and maintained efficiently. These systems are not intended to eliminate risk but rather to manage risk that is associated with the achievement of goals and objectives (Applegate, 1999).

Examples of risks that pose as a threat to the success of Riordan manufacturing include strategic risks, operational risks, financial risks (for instance foreign currency translation risks and currency transaction risks), and compliance risks. Because Riordan operations are distributed in many countries, it may face tax liabilities resulting from the fact that its income is taxed differently and with different jurisdictions. In order to determine the consolidated income tax, Riordan has to carry out significant judgment. All its affairs have to be organized in a tax efficient manner, not forgetting the jurisdiction in which it operates.

Conflicts Of Interest

Conflict of interest occurs when an employee private interest interferes with the interest of an organization. This is a situation that arises when an employee finds it difficult to carryout his responsibilities in an efficient manner due to his private interests. This situation may also be a result of improper personal benefit to an employee or any of his relation due to the position he holds in an organization (Jennings, 2006).

At Riordan manufacturing, each employee (be it a manager or a support staff) should not involve his private interest in the business affairs. Conflict of private interest with the company’s interest cannot only lead to personal poor performance but may affect the overall performance as well. It is therefore advisable that all employees at Riordan should disclose any transactions that may result in a conflict of interest. They are also advised to keep off from situations or transactions that may give rise to conflict of interest unless they are approved. All cases of conflict of interest should be reported to the supervisor or legal department, which has the mandate of addressing the situation.

Gifts and Gratuities

Employees or third parties are only allowed to take payment that relate to the identifiable services performed by them for Riordan. These payments must be reasonable to the services performed. All employees are not allowed to give, take or promise gifts or payments to third parties with the intention of pacing them under obligation. However, employees are permitted to take or give gifts or payments to or from suppliers or other stake holders only if such consideration is not seen as an inducement for any favors. Even in such a case, all the gifts and payment given should be treated as the company’s expense and all rewards received should be treated as part of income for the company.

Any gift or gratuity should be in line with the business practices and consistent with applicable law. Moreover, there are certain restrictions imposed when it comes to foreign dealings or state officials. For instance, any employee of the United States or local governments is not allowed to receive or give any gifts. In some cases, refusing to accept a gift may look offensive to the person offering it. This is common in foreign dealings especially where the individual offering the valuable gift considers it to be part of a public occasion (Jennings, 2006). In such a case, employees are allowed to accept such gifts and report them to the management who should turn it over to Riordan.

It is the responsibility of every employee to ensure that all Riordan’s assets are protected and used in an efficient manner. The company assets should only be used for business purposes and not for any private benefit. Theft, misuse or damage should be avoided at all costs and any suspected case reported to the relevant authorities. All information received or sent at Riordan should be treated as confidential and kept as so. Riordan’s electronic communication services or the telephone should only be used for legitimate business purposes. The computers and all internet resources form part of the company assets and should be handled with high level of professionalism by all the employees who are approved to do so.

Riordan holds intellectual property as one of the most valuable assets. This includes trademarks, patents, copyrights, trade secrets among other important information. Each employee at Riordan must respect the intellectual property and use it for only commercial purpose that is authorized. This is because if such information is disclosed to third parties, the company’s protection may be at risk. Riordan innovativeness is facilitated by the use of decentralized structures where managers are allowed to experiment new products. An effective procedure is followed in order to establish new and attractive ideas for the success of the organization, at the same time protecting the company’s trademarks and copyrights.

Compliance with Laws and Regulations

It is the obligation of each and every employee to comply with all the laws, rules and regulation applicable to Riordan including but not limited to laws related to kickbacks, trademarks, information privacy, giving or receiving of gifts, and occupational health and safety. All business transactions related to the government should be treated with high standards of business ethics and in compliance with applicable laws and regulations. In the United States, antitrust laws are designed for the purpose of protecting both the consumer and competitor against unfair practices. In order for Riordan to comply with all applicable antitrust laws, it has to compete ethically in all the countries in which it operates from.

Healthy and Safety Standards

One of the commitments of Riordan is to provide a healthy and safe environment for employees and the communities in which it conducts business. To ensure that this is maintained, all Riordan’s employees are expected to comply with the healthy and safety standards as well as environmental regulations. It is the obligation of all employees to ensure that Riordan’s resources are conserved and waste minimized through recycling processes.


Many companies face non-compliance to laws and regulations due to increased legislation. This is even facilitated by the increased supervision and the growing claim culture which result in financial non-compliance and may destroy the reputation of the company. To minimize this, Riordan manufacturing will have to set up a compliance committee consisting of Corporate Executive Board with the responsibility of monitoring the collection and analysis of both financial and non-financial information. The purpose of monitoring this information is to ensure that it is complete and accurate and that it is disclosed on time (Flaherty & Maki, 2004).

The selected committee will review this information before it is included in annual reports and make the necessary amendments. The committee should work together with the Corporate Executive Board in ensuring the Riordan has effective policies and procedures in place to promote compliance with applicable laws and regulations.


All organizations are expected to have a compliance plan that will help them comply with federal laws. COSO recommends a comprehensive framework that can be adopted by Riordan to design its risk management program and maintain its compliance with applicable federal laws. Corporate governance in the form of ethical business practices is important in protecting shareholders, all stakeholders, and the entire organization against fraud. This can be achieved through proper internal control and risk management practices. It is the responsibility of every employee of Riordan manufacturing to follow and maintain this compliance plan.

Reference List

Applegate, D. (1999). Struggling To Incorporate the COSO Recommendations Into Your Audit Process? Here’s One Audit Shop’s Winning Strategy. Web.

Flaherty, J.J., & Maki, T. (2004). Enterprise Risk-Integrated Framework: Executive Summary. Web.

Jennings, Marianne M. (2006). Business: It’s Legal, Ethical, and Global Environment. Phoenix: University of Phoenix.

University of Phoenix. (2003). Riordan Manufacturing [Computer Software]. Retrieved from University of Phoenix, Simulation Law531-Business Law.

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