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The Morning Risk Report: COSO Plans More Detailed Guidance in 2021
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Risk advisory group COSO has issued guidance on cybersecurity and other areas of risk management. PHOTO: NICOLAS ASFOURI/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Good morning. The Committee of Sponsoring Organizations of the Treadway Commission—known for its influential, albeit somewhat abstract, risk management guidelines—is looking to provide more practicable advice on managing emerging risks.
COSO, whose guidelines are closely followed by public companies and government agencies, has spent recent months publishing more prescriptive advice meant to supplement broad-stroke suggestions in its most-recognized documents, one on internal controls and another on enterprise risk management. “We want to make sure that these very broad, principle-based frameworks can be effectively applied in the real world,” COSO Chairman Paul Sobel tells Risk & Compliance Journal.
[Continued below…]
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In the year ahead, the group plans to issue detailed recommendations on how organizations can better manage risks related to cloud computing, artificial intelligence and outside contractors, among other topics. The reports would follow a series of similar ones issued over the past two years on topics such as cyberattacks, blockchain and compliance risks.
“This deeper guidance will help companies better customize those frameworks, so that they can truly be useful and meaningful for them and their unique strategies and business objectives,” Mr. Sobel said.
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President Nicolás Maduro, shown last month, sought to diversify Venezuela’s revenue sources. PHOTO: MANAURE QUINTERO/REUTERS
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Alex Saab, a Colombian businessman who had been Venezuelan President Nicolás Maduro’s deal maker, can be extradited to the U.S., where he was indicted on charges of laundering money for the authoritarian regime, a court in the African country of Cape Verde ruled.
An appeals court issued the decision, rejecting claims by Mr. Saab’s attorneys that their client wouldn’t get a fair trial in the U.S. and that the case against him was politically motivated. Mr. Saab emerged in recent years as a key financier for Mr. Maduro’s government, proving to be a vital broker as U.S. sanctions were leveled at the country’s oil industry to buckle the regime. Mr. Saab’s lawyers have argued that he had been on a commercial mission for the regime and had diplomatic immunity.
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China sentenced the former chairman of one of the country’s biggest state-owned asset-management companies to death on bribery and corruption charges, a striking signal in Beijing’s campaign to rein in financial risk-taking.
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Lai Xiaomin, chairman of China Huarong Asset Management Co. from 2012 to 2018 when he was fired for graft, was accused by a local Chinese court in the northern city of Tianjin of taking bribes totaling a record high of more than 1.79 billion yuan, equivalent to $277 million. The court characterized his actions as “endangering the nation’s financial security and financial stability.”
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The New York Stock Exchange is in the hot seat after a baffling flip-flop in which it first said it would delist three Chinese companies to comply with an executive order from President Trump, only to reverse itself four days later. The NYSE’s U-turn drew criticism from the administration of President Trump, who signed the order in November ordering a ban on the trading of securities of companies U.S. officials say have links to the Chinese military.
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The Environmental Protection Agency is issuing new rules that will give preference in future decisions about public health to scientific studies that disclose their underlying data. Administrator Andrew Wheeler said the changes are aimed at increasing transparency so that the public has a chance to scrutinize findings that underlie major regulations.
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Alipay is a payment and lifestyle app with more than 1 billion users. PHOTO: QILAI SHEN/BLOOMBERG NEWS
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President Trump signed an executive order banning transactions with eight Chinese-connected apps, including the Alipay payment platform owned by Chinese billionaire Jack Ma’s Ant Group Co. The order also bans transactions with the WeChat Pay app owned by Chinese tech giant Tencent Holdings Ltd., along with six other apps.
Mr. Trump, in the order, said the apps can access private information from their users. That information could be used by the Chinese government to “track the locations of Federal employees and contractors, and build dossiers of personal information,” Mr. Trump said.
Separately, China’s regulators are trying to get Mr. Ma to share the troves of consumer-credit data collected by his financial-technology behemoth.
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Russia is likely behind a massive, continuing hack discovered last month that has ripped through various federal government agencies and an unknown number of private organizations, the Trump administration formally said Tuesday.
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Jeff Immelt in 2016. He left GE the following year. PHOTO: CHRISTOPHE MORIN/BLOOMBERG NEWS
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General Electric Co.’s board won’t claw back compensation from former CEO Jeff Immelt and other executives over GE’s accounting issues or Mr. Immelt’s use of a backup corporate jet, ending a three-year probe into allegations of misconduct at the conglomerate. The investigation didn’t find evidence to support shareholders’ claims of fraud and abuse, and pursuing litigation against former leaders wasn’t in the company’s interest, according to the law firm that GE’s board hired to run the process.
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A labor union representing newsroom employees at seven of Tribune Publishing Co.’s nine newspapers is demanding the removal from the board of three representatives of a hedge fund that has offered to buy the company and take it private.
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The World Bank said the global economy is expected to grow 4% this year after contracting 4.3% in 2020. The U.K. Port of Felixstowe. PHOTO: CHRIS RATCLIFFE/BLOOMBERG NEWS
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The coronavirus pandemic is raising the prospect of a “lost decade” ahead, the World Bank said Tuesday, as it also cut its global economic growth forecasts for the coming year. The bank’s semiannual Global Economic Prospects report attributes its long-term outlook to lower trade and investment caused by uncertainty over the pandemic, along with disruptions in education that will hamper gains in labor productivity.
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The eurozone economy likely contracted in the final three months of last year, according to surveys of purchasing managers, as rising coronavirus cases and government restrictions weighed on activity in the dominant services sector. With infection rates still high, there appears to be little prospect of a strong rebound in the early months of this year, and a risk that the currency area will fall back into recession.
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The World Health Organization took the rare step of criticizing China on Tuesday, using its first press conference of the new year to express disappointment that Beijing has still not given permission to United Nations investigators to probe the origins of the coronavirus pandemic.
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In the U.S., opioid use has made workers in the construction industry less productive, according to a 2019 report by Barclays Research. PHOTO: JUSTIN MERRIMAN FOR THE WALL STREET JOURNAL
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The construction industry, already facing a shortage of manual labor, has been hit hard by opioid use and abuse. Bricklayers, carpenters and laborers carry heavy loads and perform the same tasks day in and day out, leading to injuries like carpal tunnel syndrome, strained shoulders and bad backs. Seeking relief, workers can get hooked on strong prescription drugs such as fentanyl, oxycodone and morphine, and street drugs like heroin.
Construction workers are roughly six times more likely than workers in other manufacturing, industrial and service industries to become addicted to opioids, according to a 2019 Barclays Research report.
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