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Faculty of business and management sciences

investigation on steinhoff crisis
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Table of contents
Topic page
Cover page———————————————————————————1
Table of content—————————————————————————2
Build-up of the crisis———————————————————————3
Contributing factors/causes and how it played a role in the crisis—————7
Poor board behaviour—————————————————————–7
Raising funds from loans————————————————————-8
Rectifying plans————————————————————————————–10
New committee———————————————————————————–10
Selling part of the assets———————————————————————–11
Effect of this crisis on the South African economy————————————–12
Public investment———————————————————————————12
Local retail business—————————————————————————–13
Overall economic performance—————————————————————-14
Suggestions to prevent this crisis from happening to other companies———14
Sound corporate governance——————————————————————14
Ethical Business judgement——————————————————————–17
About Steinhoff
Steinhoff International Holdings NV is a furniture company and multinational retailer.  It also sells shoes, computers, hi-fi, tiles, children’s clothes, kitchen furnishings, smartphone apps, mattresses and everything from bathroom accessories to short term insurance. In short, it’s massive multinational company with over 12 000 stores in some 30 countries, employing over 130 000 people. These 12 000 stores belong to some 40 local brands. In South Africa these include Ackermans, Pep, Tekkie Town, Russells, HiFi Corp, Incredible Connection and Hertz car rental, among others. In Germany, where the company is listed on the Frankfurt Stock Exchange, its subsidiaries include discount furniture and household retailer Poco, with its distinctive red and yellow branding. If you pop into a Conforma store in France, Spain, Portugal, Italy, Switzerland or Serbia to pick up a new couch, you’ll be buying a Steinhoff product. There are 204 Conforma outlets alone in France. Buying a mattress from Plush in Queensland, Australia? It’s a Steinhoff mattress. If you are doing online shopping in Hungary via Extreme Digital, you’ll be shopping via a Steinhoff subsidiary. In the UK, meanwhile, Steinhoff owns Bensons for Beds, Harveys, and discount homeware retailer Poundland.Since September 2016, meanwhile, Mattress Firm, America’s biggest mattress retailer, has been one of the group’s subsidiaries. 
Build up
It is evident that there is no way or rather a possibility for a financial crisis of this level could occur without any influential negative factors produced as a result of strategic decisions by the board, in the course of the business with a positive aim for what is best for the company and its stakeholders.

The build-up of the crisis started when the board committed themselves to a quest of a strategy of growing the company’s returns, by an aggressive asset acquisition over the past years. But this turned out negative instead, because the company’s balance sheet grew materially while the return on capital has decreased significantly below the cost of capital. This strategy, poorly managed, resulted in a failed investment prospect. From the previous year, Steinhoff spent out 12 billion rands in acquiring Poundland, the United Kingdom company, at the same moment the United States Mattress Firm costing Steinhoff 55 billion rands. Lastly, considering the claims made by Steinhoff board that the decision made by the Britain’s vote to leave European union was their biggest concern because it weakened the pound against the Euro, which has affected its business transactions within the bloc even though the company still managed to report profit on June 2017.

This comes after the furniture giant said it would launch an investigation into accounting irregularities, its chief executive of almost 20 years – Markus Jooste – resigned, and it postponed full-year results.
It is not immediately clear if outright fraud is involved, but German prosecutors (the share is also listed in Frankfurt) said they are still investigating possible accounting irregularities and fraud. Either way, it is yet another blow to South Africa’s reputation for good corporate governance, coming so soon after allegations that a subsidiary of Naspers, the biggest company on the JSE, improperly influenced government policy.
The report in Manager-Magazin, revealed information that is important to the build-up of the Steinhoff crisis. a case which is dated to have begun in late 2015, just before Steinhoff moved its primary listing to Frankfurt from Johannesburg. The German authorities started to investigate Steinhoff offices in the town of Westerstede and visited private homes as part of an investigation process by prosecutors in Oldenburg into four current and former managers, all this took place in the early November of 2015.

From the extract of information above as an opening statement to the crisis of Steinhoff, gives us solid evidence that sooner or later more shenanigans and unethical behaviours will be revealed and will cost the company a great deal of reputation, with a cost implicit of the public. Many reports came out concerning the Steinhoff allegations of financial irregularities. The Steinhoff CEO of that time, Markus Jooste, was one of the four employees of Steinhoff that was implicated to the possible fraud case, that was being investigated by the German prosecuting authorities.

Following that, was the decline in the clothing and food retailer’s stock, which dropped as much as lower than 15% in the Frankfurt. The stock traded 8% lower at 3.90 euros in the afternoon trading, while on the Johannesburg stock exchange, Steinhoff’s share price dropped below 10% at 59.59 rands, which is the worst share price decline in nine years. The sudden decline in the Steinhoff’s share price, raised serious concerns about the faith of the company’s ethical judgement and a red flag to the Johannesburg stock exchange. As a result, the American law firm started investigations on the allegations of financial irregularities.
The company’s executives were accused of accounting irregularities, which occurred with overstating its earnings in its share. Then its co-accused former CEO, Markus Jooste, resignation after a formal letter to his colleagues, stating the following in the letter: ‘Now I have caused the company further damage by not being able to finalise the year end audited numbers and I made some big mistakes and have now caused financial loss to many innocent people. It is time for me to move on and take the consequences of my behaviour like a man. Sorry that I have disappointed all of you and I never meant to cause any of you any harm.’ However, it is not correct for one to consider this as truth since everyone is aware that Jooste was not running the company alone and decision making was not central regarding the Steinhoff board and other executives around Markus Jooste. The accounting scandal, which caused a more than 10 billion euros collapse in Steinhoff’s share price, has transferred the blame on Jooste as the CEO, while executives around him have been left unaccountable.

It is also not acceptable to think that a competent board of directors of any company as of Steinhoff’s, can make a claim of excuses that it had not overlooked in its financial statements and or affairs, but instead they trusted the CEO to take a judgement without adequate consultation to the board members. This kind of ignorance from the board of directors perpetuated a huge financial crisis of the South African economy, which is also a breach of the company’s law as the legislation clearly states that, the board is responsible for overlooking the financial statements.

Clearly there’s more that was not revealed by the investigations from deferent sources, but it is not right for the investors, stakeholders and the South African public at large, to believe that Markus Jooste, as the CEO is the sole responsible member of the board that acted in an inappropriate manner towards the company’s funds, this short sighted narration is flawed even legally, because there’s no way in the company’s memorandum of incorporation neither the company’s act allows him to make financial entries in the financial statements without consulting to the board then be enabled to make such changes.

Adding to the lack of accountability to the board members, the Annual general meeting was held with an agenda included the proposal to some of the directors to be paid additional remunerations for their effort in managing the problems of the company. which was to clean up the mess of the crisis. However, the pressure from the public and investigating institutions forced the board of directors to withdraw the unprecedented proposal of remuneration. This alone simply clarify that these board members who took the decision, they themselves lack the required competency, insight, knowledge, skills and intelligence to mitigate a risk of this level and appreciate the depth of the crisis in question.

Regardless, of all the major misconduct committed in the name of the company that led to the crisis in question, I think, the serious pressure came from the long-term liabilities and short-term liabilities. According to Fin24 city press, Steinhoff had to raise a minimum of 16 billion rands in order to be able to finance its long-term liabilities, while a possible recovery of assets Worthing 93 billion rands was being investigated. The measure came about with an aim to recoup some of the company’s short-term liabilities that owing to banks and investors that were currently expecting payments of the current quarter. This was regarded as a financial fraud, because the company depended largely on its listed shares price to fish investors and a credit facility from relevant money lenders.

The banks and investors included Citigroup, Nomura and Goldman, which are all listed under Wiese loans holding; HBSC, Investec, Standard bank, BNP and Bank of America. Nevertheless, all of these institutions declined to comment after realising a sharp pull back to the company’s finances. Following the major investors of Steinhoff, which is Wiese as the biggest shareholding, then followed by the Public investment company with a share volume of 10% at Steinhoff. All of these institution, caused a great deal of pressure to the company to end up taking major decision to protect their reputation and the investor confidence. The silence of these major stakeholders also blinded the South African government to not anticipate the crisis that would then come to haunt the economy and the public as a whole.

The money lenders and investors to the company played a major role in turning a blind eye to the company’s financial irregularities by the beard members. As stakeholders, they also had an honours to intervene at least at a stakeholder level by requesting financial statements of the company and current status of Steinhoff as the business goes by on a quarterly basis. an early questioning by stakeholders of such business conduct would have been a great help at some point to the company, I believe that things would have been done differently if the money lenders, shareholders and other stakeholders ware not ignorant to the build-up of the company’s unethical acts, starting with the allegation by the German authorities to its former CEO, Markus Jooste.

Contributing factors/causes and how it played a role in the crisis.

Poor board behaviour
By the time the scandal came out to light in the face of the public, the board suggested to put on hold the release of the financial statements for the financial period ended on September 2017. one of the reasons of the suspension of the release to the company’s financial statements, was that, the accounting firm PWC had been appointed by the board to conduct a forensic investigation to the company’s financial statements, after the scandal of accounting irregularities came out. But what was surprising to the matter was that the financial statements and results for the financial year ended 2016 backwards were going to be restated, while the board members announced that it will not be able to release the financial statements for the period ended 2017 in the formalised date. This raised a question of competency to the board members, because a reasonable board of competent members as defined in the companies’ legislation, could have been foreseen the future events and plan ahead of it.

Technically, the board had breached the company’s legislation, on the basis that, financial statements of a company that is listed in the Johannesburg stock exchange should be published within three months of the financial year end. Following the second annual general meeting tabled to be held on the 20th of April 2018, where there was no mention on the agenda that the financial statements will be tabled, of which the board members’ decision must be read together with section 30 of the Republic of South African Companies Act, which stipulates that the financial statements of the listed company should be presented at the first shareholder meeting after the board have approved the financial statements.

keeping in mind that the board issued a rewarded responsibility to some of the board members, that if they can be able to clean the mess in question they will be remunerated above their contractual remunerations. This means that, in the reasonable person’s mind, that the board members lacked the competency and intelligence to mitigate a risk of such level. More exposure came to the idea that they trusted their former CEO to take all necessary decisions without consulting to them, this again is a form of negligence which is also a breach of the company’s legislation strong enough to hold the board members accountable.

But what happened instead? A blame was taken by the former CEO, Markus Jooste. Clearly that was a technical and strategic decision by the board members, and there is no doubt that consensus was reached within the board members that it is better for one man to fall with the blame than the entire group because it could have raised more questions going back to the processes and procedures taken to appoint the current board members. And nepotism would have come to play if it were to be found that the whole board members are responsible and publicly accountable. Therefore the outcomes of the shenanigans’ counter decision remained questionable, that how can a CEO take a blame of such a level of crisis alone? The answer lies in the shady meetings held in the background of the company and will be protected for the betterment of the situation, because possibilities are there, that it might deteriorate if all the board members are found to be responsible and accountable for the crisis.

Raising funds from loans
”The pain and knock-on effect of the Steinhoff meltdown on the general public’s savings are all over the tabloids every day. So is the sensation created by all the I-told-you-soers who benefited from the meltdown and obviously revel in the pain of their competitors in the investment industry. Major stakeholders are still baffled by how it could have happened, while Parliament is calling for an inquiry into the matter that tainted South Africa as a whole.” (De Klerk, 2018:1)
‘We will probably never learn the truth of the actual sequence of events during the meltdown process, but certain facts are now known. On December 7, 2017, the Wall Street Journal reported that before the previous day’s announcement of the admission of accounting irregularities and the subsequent resignation of chief executive Markus Jooste a staggering “40percent of Steinhoff’s Johannesburg-listed shares and more than a quarter of its Frankfurt-listed shares were on loan to investors betting that the share price would fall according to HIS Markit”. By Friday, December 8, more than half of Steinhoff’s shares were out on loan, despite a nearly 87percent drop in the share price from the pre-announcement levels.” (De Klerk, 2018:1-2)

The role played by these contributed factors, is very huge to the detrimental level. Because looking at the effect caused by the large portion of the listed shares are financed with loans. It made it difficult for the company’s profit margin to be able to cover its short term liabilities since the group went on an aggressive move to acquire more assets in order to increase capital returns. Unfortunately, it turns out be a ticking bomb waiting for its count down moment to finish.
The role played by the board on instigating the crisis was the one of negligence, because they were aware of everything while decision making was taking place. The investigation from the German authorities stipulates that the board members were mostly cautious about their pockets instead of the company’s interest. Following that two board members were given an offer of 300000 euros combined provided that they clean up the mess they themselves caused. The board failed to comply with the company’s policies and standards, and other company regulations.

Putting the company under pressure by acquiring too much loans to finance listed shares also played a negative role on the company’s financials, because you cannot rely on a live share price to measure your assets against current liabilities, to be specific, refer to the loans acquired by the company which forms more than half of the listed share both in Johannesburg and at the Frankfurt stock exchange. Live prices of shares fluctuate every time an event takes place, that is directly or indirectly attributed from the company’s activities. Therefore, using the share price as a security to acquire more borrowing costs was a poor decision making by the board members.
These series of events done by the board are symmetrical to the idea of gambling with the investors’ money on a forex trading platform. The company directors were on an autopilot together with the CEO because such things are almost having no room for development had the board strictly ran the business accordingly and properly as the previous board did. It was going to be reasonable if they inherited the problems, but they created the crisis themselves and on the other hand they do not have proper counter measures to reverse the damage caused to company and its stakeholders.

Rectifying plans
New committee
The Steinhoff committee made an announcement after a trading session of that week was closed, stating that it had reached an agreement to make a decision and a new board has been appointed. The reason on their statement was to improve corporate governance within the company that will have roots in South Africa but its base will be in Amsterdam. The change of the board members, made a clear indication that the previous board was not competent and had failed the company. Adding more to the lack of ethics to conduct business activities professionally, the board members are not fit to run the company at this level, provided that they proved themselves in the face of the public.

These changes are part of the rectifications plan to the crisis, because that should be a first step on restoring the company’s lost fortunes. Therefore, the company clearly needed a new committee with competency, skills and intelligence to run such a huge multinational company. As much as the public is concerned, there was no room to reinstate the board members that were involved in the manufacturing of the company’s greatest crisis. More pressure came to press on the focus button to remove the incompetent directors from the previous committee
Part of the new committee, is three non-executive directors which are all existing board members. These non-executive members are Steven Booysen, a former CEO and Chairperson of Lender Absa, heather Sonn, a former investment banker and Johan van Zyl, the co-CEO of financial services firm African rainbow capital, which is the chairperson on the trio. Further changes to the executive members obviously is the resignation of Markus Jooste as the CEO of Steinhoff, then Chriso Wiese took the position as an interim chairperson.

Selling part of the assets
A desperate attempt to boost liquidity in the statement of financial position in order to finance current liabilities as part of the loans acquired while on the asset acquisition quest. The attempt came from an announcement that the company is considering selling assets worth more than 16 billion rands from one of its owned home furnishing chain Conforama in France. And also announced that one of its subsidiary in Africa will be used to finance the long-term liabilities amounting to another 16 billion rands, while they continue to investigate possible recovery assets at least amounting to 96 billion rands. All these calculated measures were implemented and suggested to help repay some of the current liabilities, including money owing to banks and investors.

The asset disposition came to play after a comment of Patrice Rassou, the head of equities at Sanlam investment management in cape town; “Banks usually will also go for three times interest cover, so as long as the underlying cash flows remain stable they can withstand a sharp pullback.”
The selling of these assets was a measure to counter the crisis since the panic to the board members has redirected a focus to the repayment of the company’s liabilities before the outstanding loans are overdue. To criticise the measure a bit, it is a dummy move, because the executive worked hard on taking loans to acquire new assets to increase the company’s investments. Therefore, selling part of the assets again invalidates the hard work done on the asset acquisition.

Effect of this crisis on the South African economy
Public investment
the public investment company is holding about 10% of the shares at Steinhoff and has lost a huge portion of the government employees funds that were invested with Steinhoff. The loss of such amount indicates a shortfall in the retirement pension funds. However, minister Melusi Gigaba, issued statement to investigate Steinhoff regarding the crisis caused. While looking deep in to the crisis, the share price declined about 62%, but it did not have a greater impact or severe effect on the South African economy.

An analytical statement came out, pertaining to the report of Ryk De Klerk, stating that the economy is not affect to a crisis extent, but is only a temporary deference that will be adjusted over a medium to a long term. The people who are likely to suffer are those who are closer to their retirement, because the younger the employee, the less impact they will encounter the effects on the crisis. The analysis by De Klerk, referred to the fact that not all the public investment funds were invested on one basket, he again claims that the method of investment used by the public investment company, is resilient to such events.

Shortly, the money lost on the shares will not cause a decrease in the household income distribution, it did not affect the farming prices locally nor the sales decrease in the south African retailers. Even though the commodity prices increased significantly, the economy still growing at the rate of 2% every quarter annually, with the forecast of 1% towards the end of the year. The growth indicated a positive feedback of the South African economy regardless of the Steinhoff crisis.

Local retail business
Steinhoff owns many retailer shops in south Africa, such as pep stores, Shoprite, Hi-fi corporation, teckie town and many more, with a lot of employees, but none of the retail shops felt a shock from the crisis and all of them are still operating as usual. In other words, there was no indication that any local retail business owned by Steinhoff will close down and leading to job losses If one was to at least mention to who are directly affected, then is the major investors of Steinhoff, because there was no uncertainty that whether the money lenders will or will not get their money back, despite the financial pullback, the company still strives.

Recently, Absa filled a case to liquidate the company, but that was unnecessary because there are no important signs indicating a that our domestic banks had sustained a loss that is key to its viability. Therefore, the effect or impact caused of the South African economy is of technical and artificial loss that perhaps will be felt in a long run if the company fails to revive its share price and improve its corporate governance.

While the company is still battling with its problems we cannot end the year with the same mind that we had at the beginning of the year, because overall, the company is doing fairly good globally and things seems to be viable locally. Despite the political uncertainty, cabinet reshuffle, credit ratings downgrades, technical recession and the volatile exchange rates, the South African investors still enjoyed a good trading year in terms of the assets growth.

Overall economic performance
The local equities have turned out positive with a return of 17% in the year 2017 regardless of the December negativity. Then the listed property has generated a double digit returns, while the USD/ZAR exchange rate traded fairly flat this year with insignificant fluctuations. The global equities have increased by 20% in the rand. Then lastly a poor return encountered was only seen on the domestic bonds that has returned an all bond index of 5.5%.

Looking at the good economic performance overall, whereby Steinhoff had contributed in all relevant levels, the results still turned out to be positive. Therefore, after looking thoroughly in to the facts, the south African economy did not feel the turbulent caused by the Steinhoff crisis regarding the 62% decline in the share price. This crisis might have been severe in the corporate level, but globally it has affected the economical business at a very small scale setting aside the reputation of the country’s legislature on companies, since it represented very low professionalism and ethics deficiency to the board members, which most of them are SAICA members.

Most of the effect caused by the Steinhoff crisis is intangible, because it is only a matter of trust and exercise of law within the company and with the government as well, to enforce the relevant legislation in order to prevent the same event from happening to other companies
Suggestions to prevent this crisis from happening to other companies
Sound corporate governance
This belief that corporate governance “doesn’t apply” comes from a view that it’s only theoretical and doesn’t impact the bottom line or performance, is costly to implement, is “bureaucratic” (and slows decision-making), it can’t be tailored to a company’s size and stage of development – or all of these. But in reality, all companies compete in an environment where good governance is a business imperative in relation to things like:
raising capital;
securing debt;
attracting and maintaining talented, qualified directors;
meeting the demands and expectations of sophisticated shareholders; and
preparing for potential acquisition / exit or next phase of growth
“Corporate governance” doesn’t have a single accepted definition. Broadly, the term describes the processes, practices and structures through which a company manages its business and affairs and works to meet its financial, operational and strategic objectives and achieve long-term sustainability.

Law: Corporate governance is generally a matter of law based on corporate legislation, securities laws and policies, and decisions of the courts and securities regulators.  Generally, directors owe a duty of loyalty to the companies they serve, and have a fiduciary duty to act honestly, in good faith and in the company’s best interests. Corporate governance is also shaped by other sources, like stock exchanges, the media, shareholders and interest groups. Corporate governance practices help directors meet their duties and the expectations of them.  
Relevant Factors: The objective of corporate governance is to promote strong, viable competitive corporations accountable to stakeholders. But one size doesn’t fit every company, and there’s no uniform, comprehensive set of policies or practices: the “right” ones depend on several factors, including:
the nature of the business;
the company’s size and stage of development;
availability of resources;
shareholder expectations; and
legal and regulatory requirements.

Benefits: Proponents of corporate governance say there’s a direct correlation between good corporate governance practices and long-term shareholder value.  Some of the key benefits are:
high performance Boards of Directors;
accountable management and strong internal controls;
increased shareholder engagement;
better managed risk; and
effectively monitored and measured performance.

Right-sized governance practices will positively impact long-term corporate performance – but companies must design and implement those that both comply with legal requirements and meet their particular needs. Here are the top 5 corporate governance best practices that every Board of Directors can engage – and that will benefit every company.

 Boards should be comprised of directors who are knowledgeable and have expertise relevant to the business and are qualified and competent, and have strong ethics and integrity, diverse backgrounds and skill sets, and sufficient time to commit to their duties. How do you build – and keep – such a Board?
Identify gaps in the current director complement and the ideal qualities and characteristics, and keep an “ever-green” list of suitable candidates to fill Board vacancies.

The majority of directors should be independent: not a member of management and without any direct or indirect material relationship that could interfere with their judgment.

Regularly review Board mandates to assess whether Directors are fulfilling their duties, and undertake meaningful evaluations of their performance.  
Establish clear lines of accountability among the Board, Chair, CEO, Executive Officers and management: 
Create written mandates for the Board and each committee setting out their duties and accountabilities.

Delegate certain responsibilities to a sub-group of directors. Typical committees include: audit, nominating, compensation and corporate governance committees and “special committees” formed to evaluate proposed transactions or opportunities.

Develop written position descriptions for the Board Chair, Board committees, the CEO and executive officers.

Separate the roles of the Board Chair and the CEO: The Chair leads the Board and ensures it’s acting in the company’s long-term best interests;   
The Board should:
Set directors’ fees that will attract suitable candidates, but won’t create an appearance of conflict in a director’s independence or discharge of her duties.

Establish measurable performance targets for executive officers (including the CEO), regularly assess and evaluate their performance against them and tie compensation to performance.

 Companies should regularly identify and assess the risks they face, including financial, operational, reputational, environmental, industry-related, and legal risks:
The Board is responsible for strategic leadership in establishing the company’s risk tolerance and developing a framework and clear accountabilities for managing risk. It should regularly review the adequacy of the systems and controls management puts in place to identify, assess, mitigate and monitor risk and the sufficiency of its reporting.

Ethical business judgement
Making ethical business decisions consistently is a key to long-term success for any business, although ethical decision makers may, at times, achieve weaker short-term financial results than their shadier counterparts. Knowing how to make ethical business decisions can help you to set the standard throughout your organization, helping your company to garner a strong, positive reputation in the marketplace while securing a loyal customer base.

Consider the effects of your decisions on all stakeholders. Decisions are often made to address one or a small number of issues, such as revenue growth, cost control or client-specific issues, but it is important to realize the wider implications of your decisions on everyone affected. Business decisions made in the best interest of stockholders, for example, can have effects on employees, clients, suppliers, people living and working near your operations, the natural environment and even future generations of people. Consider how stakeholders will be affected if the decision turns out the way you plan, and how they will be affected if things go wrong.

Use industry regulations as a starting point when making decisions. A number of industries, including construction and financial services, are highly regulated to ensure the ethical operation of all companies. Regulations generally require a minimum level of ethical consideration, however, and it is possible for companies to operate within legal boundaries while still acting unethically. Build your organization to exceed laws and regulations, going further than your competitors to ensure that all stakeholders are treated equitably, rather than simply conforming to minimum standards.

Review the results of your past business decisions, and learn from your mistakes. According to, managers should always reflect on the outcomes of their decisions. No one can make perfect decisions all of the time, although making consistently ethical decisions is more easily accomplished than making consistently successful or profitable ones. If you have made and implemented a decision with questionable ethical implications, act quickly to resolve the matter by making restitution to everyone affected and work to counteract the decision’s effects.

Reduced Legal Problems: The most obvious consequence of compliance is that it decreases your risk of fines, penalties, work stoppages, lawsuits or a shutdown of your business. When you don’t meet some compliance requirements, such as posting an employment poster in the wrong area of your office, you might get a warning and a chance to correct the problem. In other situations, you might face costly sanctions. Failing to meet your legal obligations, such as in your manufacturing procedures or advertising methods, can also help someone suing you strengthen his case. Hire a compliance expert to make sure you understand all of your legal obligations and how to comply with them.

Improved Operations: Many business rules and regulations can help you more than harm you. For example, rules regarding discrimination and harassment help you create a better working environment for your employees, which can lead to more worker productivity. Following safety and security rules helps prevent injuries, fires or building evacuations that hurt your profitability.

Better Public Relations: When you meet your legal obligations, you can tout these on your website and in your marketing materials. For example, when you place job advertisements, include the fact that you are an equal opportunity employer. If you post your mission statement on your website, state that you do not discriminate based on race, sex, creed or sexual orientation.

© McInnes Cooper, 2014;
Ingram, 2009;

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