Legislation and Regulation, and Regulatory Compliance
1. Describe one or more situations that you have encountered thus far in your career in which deeper understanding of lawmaking by legislatures, agencies, or courts would have made you more effective. Be as specific as possible. HOWEVER, DO NOT REVEAL ANY CONFIDENTIAL ORSENSITIVE INFORMATION THAT YOUR CURRENT OR PAST EMPLOYERS OR COLLEAGUES WOULD NOT WISH TO BE DISCLOSED. THIS PROHIBITION APPLIES TO THIS ASSIGNMENT AND TO ALL OTHER WORK IN THIS COURSE.
2. Assume that your company has a problem, call it Problem X. Problem X has been a burr under your company’s saddle for many years. It is not a “life or death” matter, but over time it has involved substantial (and, in your estimation, unwarranted) costs for the company. Such costs will continue year after year unless you prevail upon Congress to amend an existing statute. You are planning the campaign to secure enactment of such amendment. Identify and explain steps that you would take to increase the likelihood of success of the campaign. Limit your answer to no more than four such steps.
Situation: You are employed by Forever Young, Inc. (“FY”), which makes and sells cosmetics. Jilaquil is an herb that is a significant ingredient of many of FY’s products. Only one U.S. company grows, processes, and sells Jilaquil, and it charges exorbitant prices. Moreover, there is a high tariff on Jilaquil. FY seeks a legislative solution to make it easier to obtain sufficient supplies of Jilaquil at a reasonable cost.
Question 3: Identify a legislative strategy FY might consider and identify the U.S. Senate committees and the U.S. House of Representatives
committees that might have jurisdiction over the measure.
Question 4: Identify a second, an alternative strategy, and identify the U.S. Senate committees and the U.S. House of Representatives
committees that might have jurisdiction over the measure.
Question 5: Describe the kinds of considerations you would take into account in evaluating which committees might be most or least friendly to your effort. Answer this question generally. You need not research the actual current members of any committee or their preferences and
inclinations.
GOVERNANCE, RISK MANAGEMENT, AND COMPLIANCE
Question 1. Assume that the board of directors of Quine, Inc. adopted a compliance program in 2012 to comply with Medicare and Medicaid regulations. Since 2012, Quine, Inc. has made numerous acquisitions and greatly expanded its business. Its board of directors, however, has not made any changes to the compliance program since 2012, and in fact has given it little attention. This last year Quine, Inc. paid $20 million dollars in fines and civil penalties for violating Medicare and Medicaid regulations. Shareholders have filed a derivative lawsuit. Given the materials covered in the in Pan, A Board’s Duty to Monitor, what do you think that the shareholders will try to argue?
Question 2. Compare the Independent Director provisions in the HCA Healthcare Corporate Governance Guidelines and those in the BristolMyers Squibb Corporate Governance Guidelines. Identify at least 2 common elements and 2 differences.
Compare the Director Responsibilities section of the Darden Corporate Governance Guidelines with the Board Responsibilities and Expectation of Directors sections of the Goldman Sachs Corporate Governance Guidelines.
Identify at least 2 common elements and 2 differences. Why do you think that the Goldman Sachs Guidelines provide greater guidance regarding director responsibilities and expectations?
Regulatory Compliance
Question 1. Generally, procedures are designed to ensure compliance with laws of specific application, which require that specific actions be taken, rather than laws of general applicability, such as “the regulated entity must obey all laws.” Is there ever a need for procedures to ensure compliance with laws of general applicability? If so, what are some examples?
Question 2. Can a corporation have too many policies and procedures? We have discussed that from a risk perspective policies are designed to ensure the company complies with applicable laws and regulations. However, as we discussed in Module 3, if the policies are too excessive and the procedures are not practical for the employees to follow, there is a high likelihood that the business will not, wholly or in part, follow the procedures. Consider whether the company has a higher risk of regulatory enforcement actions and litigation exposure if it has policies and/or procedures that it does not follow. If you agree that there may be too many policies and procedures, how does a company determine the correct balance?
2. Assume that your company has a problem, call it Problem X. Problem X has been a burr under your company’s saddle for many years. It is not a “life or death” matter, but over time it has involved substantial (and, in your estimation, unwarranted) costs for the company. Such costs will continue year after year unless you prevail upon Congress to amend an existing statute. You are planning the campaign to secure enactment of such amendment. Identify and explain steps that you would take to increase the likelihood of success of the campaign. Limit your answer to no more than four such steps.
Situation: You are employed by Forever Young, Inc. (“FY”), which makes and sells cosmetics. Jilaquil is an herb that is a significant ingredient of many of FY’s products. Only one U.S. company grows, processes, and sells Jilaquil, and it charges exorbitant prices. Moreover, there is a high tariff on Jilaquil. FY seeks a legislative solution to make it easier to obtain sufficient supplies of Jilaquil at a reasonable cost.
Question 3: Identify a legislative strategy FY might consider and identify the U.S. Senate committees and the U.S. House of Representatives
committees that might have jurisdiction over the measure.
Question 4: Identify a second, an alternative strategy, and identify the U.S. Senate committees and the U.S. House of Representatives
committees that might have jurisdiction over the measure.
Question 5: Describe the kinds of considerations you would take into account in evaluating which committees might be most or least friendly to your effort. Answer this question generally. You need not research the actual current members of any committee or their preferences and
inclinations.
GOVERNANCE, RISK MANAGEMENT, AND COMPLIANCE
Question 1. Assume that the board of directors of Quine, Inc. adopted a compliance program in 2012 to comply with Medicare and Medicaid regulations. Since 2012, Quine, Inc. has made numerous acquisitions and greatly expanded its business. Its board of directors, however, has not made any changes to the compliance program since 2012, and in fact has given it little attention. This last year Quine, Inc. paid $20 million dollars in fines and civil penalties for violating Medicare and Medicaid regulations. Shareholders have filed a derivative lawsuit. Given the materials covered in the in Pan, A Board’s Duty to Monitor, what do you think that the shareholders will try to argue?
Question 2. Compare the Independent Director provisions in the HCA Healthcare Corporate Governance Guidelines and those in the BristolMyers Squibb Corporate Governance Guidelines. Identify at least 2 common elements and 2 differences.
Compare the Director Responsibilities section of the Darden Corporate Governance Guidelines with the Board Responsibilities and Expectation of Directors sections of the Goldman Sachs Corporate Governance Guidelines.
Identify at least 2 common elements and 2 differences. Why do you think that the Goldman Sachs Guidelines provide greater guidance regarding director responsibilities and expectations?
Regulatory Compliance
Question 1. Generally, procedures are designed to ensure compliance with laws of specific application, which require that specific actions be taken, rather than laws of general applicability, such as “the regulated entity must obey all laws.” Is there ever a need for procedures to ensure compliance with laws of general applicability? If so, what are some examples?
Question 2. Can a corporation have too many policies and procedures? We have discussed that from a risk perspective policies are designed to ensure the company complies with applicable laws and regulations. However, as we discussed in Module 3, if the policies are too excessive and the procedures are not practical for the employees to follow, there is a high likelihood that the business will not, wholly or in part, follow the procedures. Consider whether the company has a higher risk of regulatory enforcement actions and litigation exposure if it has policies and/or procedures that it does not follow. If you agree that there may be too many policies and procedures, how does a company determine the correct balance?
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