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The Morning Risk Report: How Big Brands Combat Online Outrage |
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H&M branch seen in Berlin in 2017. The company has established a new diversity and inclusion team in the U.S. and Europe. PHOTO: FELIPE TRUEBA/EPA/SHUTTERSTOCK
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Hello. Major retailers have almost perfected the art of the corporate apology in recent years, following a string of gaffes over products and ads that stirred uproars online. Managing a controversy, however, is much different than preventing one. On that count, companies might have more work to do to protect their reputations.
H&M is one company that has made strides. A year after the company apologized for releasing a children’s hoodie sporting the phrase “coolest monkey in the jungle” modeled by a black child, it has established a new diversity and inclusion team with members in the U.S. and Europe. Ezinne Kwubiri, the company’s first such executive for North America, said that H&M has reconfigured its quality-control processes, making sure products are reviewed by people in multiple departments.
[Continued below...]
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“Everyone in all industries, especially retail, needs to pause for a second and look at how things are produced,” Ms. Kwubiri said, adding that the Swedish fast-fashion giant still designs most of its products in Europe and Asia. “We need to take a bit more time in how things are designed, if it’s not adding extra eyes to the process, it’s diversifying the eyes looking at the product.”
The pre-emptive approach to avoiding blunders is still relatively new. Mark Palmer, who was senior vice president of public relations at Enron throughout its financial accounting scandal and bankruptcy and is now a partner at Brunswick Group, said he has seen a sharp rise over the past three to four years in corporate boards instituting reputation-risk modeling, particularly for companies that operate outside of heavily regulated industries where the practice is standard.
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| From Risk & Compliance Journal |
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Danske Bank is under investigation in Estonia, Denmark, the U.S., U.K. and France. PHOTO: INTS KALNINS/REUTERS
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Danske Bank is shutting down its operations in Estonia as the fallout continues from a massive money-laundering scandal that has led to investigations in several countries. The bank said it was told to close down its operations in the country by Estonian regulators.
Danske is under investigation in Estonia, Denmark, the U.S., U.K. and France for allegedly facilitating the laundering of about $230 billion by non-Estonians through its branch in Tallinn, Estonia, primarily by Russians, between 2007 and 2015.
Estonian regulators told Danske to close the Tallinn branch within eight months and return, in full, the deposits of its customers. It has to transfer or resell all customer agreements within that time frame or face a fine of about $113,000 per day.
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Illinois Company Responds to German Unit's Cuba Sales |
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Illinois Tool Works Inc. says that a U.S. settlement involving a German subsidiary involved a few employees who willfully violated company policy and went to great lengths to conceal their actions.
The unit, AppliChem GmbH, was fined $5.5 million for selling chemical reagents to Cuba, a violation of U.S. sanctions regulations. Senior AppliChem management conducted training of its staff to help perpetuate the scheme concealing the effort from ITW, the U.S. had said.
The settlement was reported Friday in The Morning Risk Report. ITW, in a statement issued later that day, said the company disclosed the actions to the government upon learning about them. The employees are no longer with the company.
—Samuel Rubenfeld
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SEC Chairman Jay Clayton PHOTO: AARON BERNSTEIN/REUTERS
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Any company exploring whether to go public would get greater leeway to discuss their plans privately with potential investors before announcing an initial public offering, under a proposal that securities regulators released Tuesday. In a bid to boost the number of public companies, the Securities and Exchange Commission proposed letting all companies “test the waters” before deciding whether to seek an IPO. The agency had previously allowed only smaller, emerging companies to talk to investors privately.
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McKinsey & Co. agreed to pay $15 million to settle Justice Department allegations that the large consulting firm failed to make required disclosures of potential conflicts in three chapter 11 cases it had advised on in recent years.
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Airbus has sunk at least $17 billion into the A380 project yet sold fewer than half of the jetliners it promised. An Airbus A380 of Lufthansa. PHOTO: MICHAEL PROBST/ASSOCIATED PRESS
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When Airbus SE launched the A380 superjumbo in 2000, it touted the two-deck plane as “the Eighth Wonder of the World.” Instead, the world’s largest passenger plane exposed dysfunction inside the European aerospace company and now offers a textbook case of a company misjudging its market and losing big.
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Pinterest has stopped returning search results for terms relating to vaccinations, a drastic step aimed at curbing the spread of misinformation but one that also reflects the challenge facing social-media companies in monitoring hot-button health issues.
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British regulators said they were leaning toward blocking a proposed merger between Walmart Inc.’s British grocery unit and rival J. Sainsbury PLC, threatening to scuttle one of the retail giant’s biggest overseas overhauls.
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Southwest Airlines Co. said it would investigate whether a dispute with its mechanics union was causing maintenance delays that have led to grounded planes and canceled flights. The airline said over 40 of its roughly 750 aircraft have been taken out of service in recent days—twice the number of aircraft typically undergoing maintenance at one time.
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Pentagon lawyers filed a new motion in the legal battle over a military cloud-computing contract worth up to $10 billion, marking a tactical shift that could signal more trouble for a procurement process which Amazon.com Inc. has been favored to win.
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Alibaba‘s CICC holding would be valued at about $437 million, based on the closing price of its Hong Kong-listed shares. PHOTO: ALY SONG/REUTERS
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Chinese e-commerce behemoth Alibaba Group Holding Ltd. has joined online rival Tencent Holdings Ltd. as a sizable shareholder in investment bank and broker China International Capital Corp. Hangzhou-based Alibaba said on Tuesday it had accumulated a 4.84% stake in CICC.
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CBRE Group Inc. and other big brokers are trying to muscle their way into the increasingly crowded but lucrative co-working business, aiming to help landlords create their own flex-space companies that cut out middlemen like WeWork Cos.
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Royal Caribbean Cruises Ltd.’s effort to tempt more Chinese vacationers aboard its ships is showing signs of bearing fruit. In the last three years, Royal Caribbean has seen a 75% increase in Chinese guests on cruises outside of China in places such as Europe and Alaska, company executives said.
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New Ford trucks in a parking lot at the company’s factory in São Bernardo do Campo, Brazil, in 2016. PHOTO: PAULO WHITAKER / REUTERS/ZUMA PRESS
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Ford Motor Co. intends to stop making heavy trucks in South America and focus there on the more popular midsize pickup trucks and sport-utility vehicles, the company. Michigan-based Ford is under pressure to improve its international operations after incurring losses at all of the global business units in 2018, including $678 million in South America.
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Glencore PLC plans to curb production at one of its biggest copper and cobalt mining operations, Mutanda Mining Sarl in Congo, according to people familiar with the matter, potentially taking a sizable portion of two important industrial metals out of circulation.
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Glencore also plans to cap its coal output in line with a global transition away from high-carbon-emitting fuels, the company said Wednesday.
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Corporate executives worried about workplace shootings are quietly installing gunfire-detection systems in U.S. offices and factories. Most don’t tell employees what the sensors are, for fear of alarming them. The rapid uptick in adoption of gunshot sensors follows a wave of workplace shootings in the past year
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