Risky Foreign Practices

Posted on March 26, 2012 by in Blog

Chubb Insurance rightly points out one of many risks that require attention overseas. Know the rules. An FCPA Investigation could be devastating to the value of your business.

For 35 years U.S. companies and foreign companies with operations in the United States have been prohibited from bribing foreign officials either directly or through third parties while securing overseas business under the Foreign Corrupt Practices Act (FCPA).  But, it has only been over the past few years that Federal prosecutors have really stepped up enforcement of this stringent U.S. law barring corrupt practices overseas.  In 2010, the U.S. government received $1.8 billion in sanctions from 23 companies that had violated the law. Meanwhile, laws similar to the FCPA are being enacted and enforced abroad, particularly in Western Europe.  

Of concern to companies that conduct business across borders are questions about what is considered a bribe of a foreign official. And companies are looking to the government to help clarify this issue.  In addition, there may be questions about whether a company’s D&O policy covers an FCPA investigation.

For now, there are many questions about the FCPA and few clear answers regarding this issue. But, the price for not taking a highly aggressive loss-prevention approach to this largely uninsurable risk can have life-changing consequences for directors and executives, and can be costly for organizations, both financially, and in the court of public opinion.

Current State of the Middle Market

Posted on March 24, 2012 by in Blog

One of my partners, Larry Rogers (CFA Houston), gave a presentation to the American Society of Appraisers on Thursday, March 1. The presentation covered the historical financial conditions that contributed to entrepreneurs’ ability to raise capital and reflected on past M&A transaction numbers. The presentation also took into consideration the present market conditions and forecasted future entrepreneurial expectations. This should give you some perspective into the current mid-market M&A market.

Treating Employees Right

Posted on March 20, 2012 by in Blog

This article by Gretchen Spreitzer and Christine Porath sums up how to develop an efficient and effective corporate culture to lead to success through employee performance. It is a great read for a company that wishes to grow through productive human resources.

Treating employees right.  

Happy employees produce more than unhappy ones over the long-term. They routinely show up at work, they’re less likely to quit, they go above and beyond call of duty, and they attract people who are just as committed to the job. Moreover, they’re not sprinters; they’re more like marathon runners, in it for the long-haul.

A thriving workforce.

We think of a thriving workforce as one in which employees are not just satisfied and productive, but also engaged in creating the future, the company’s and their own. Thriving employees have a bit of an edge, they’re highly energized, but they know how to avoid burn out.

There are two components to a thriving workforce:

  1. Vitality – a sense of being alive, passionate and excited. Employees who experience vitality spark the energy in themselves and others. Companies generate vitality by giving people the sense that what they do on a daily basis makes the difference.
  2. Learning – the growth that comes from gaining new knowledge and skills. People who are developing their abilities are likely to believe in their potential for further growth. Learning, for instance, creates momentum for a time. Without passion it can lead to burn out.

The combination of vitality and learning leads to employees who get better results and find ways to grow. In short, they are thriving, and the energy they create is contagious.

There are four mechanisms that create the conditions for thriving employees:

  1. Providing decision-making discretion,
  2. Sharing information,
  3. Minimizing incivility,
  4. and offering performance feedback. 

One mechanism, by itself, will get you part of the way, but all four are necessary to create a culture thriving. 

 

Who Really Makes The Decisions?

Posted on March 15, 2012 by in Blog

Visit source: 

Who Really Makes The Decisions?

Another Jam Session

Posted on March 6, 2012 by in Blog

A great time at the this month’s band jam. This monthly event, sponsored in part by Forward Results, brings together together professionals to play music, listen to music, and have a cocktail while getting to know one another.

Here are a few pictures of the event.

This post was published via mobile app.

Restricted Stock Awards and Taxes

Posted on by in Blog

Visit site – 

Restricted Stock Awards and Taxes

Why Employers Lose in Court

Posted on March 5, 2012 by in Blog

One of my Favorite Property and Casualty Insurance guys sent this to me this morning and I thought it was a good reminder to all Employers…

I found this list on the Internet the other day and I thought it had some good “nuggets of awareness” in it. It was provided by the Employer Advisors Network and gives 7 reasons why employers lose in court when sued by employees (current or former).

Employers lose the majority of the cases that go to trial.  Here are some of the main reasons why this is the case:

  1. The jury pool – Very few jurors have ever held an executive or managerial position.  As result, the jury box generally consists of people who will judge your company from the perspective of the employee, not the employer. Like many employees, they have an “all bosses are villains and all employees are victims” mentality.
  2. Employers focus on justifying rather than taking responsibility – When we make a mistake we should admit it. (My input?  It’s funny that this is advice from lawyers!) There is no justifying the fact an employee hired on to bring value to your company is now suing you.
  3. Failure to document – As every employment attorney tells their client: document, document, and document.  Judges and juries expect to see proof of poor employee performance–in writing.  
  4. The company has disciplined inconsistently – Whether the company is big or small, the lack of consistent treatment is guaranteed to generate juror mistrust.  
  5. Somebody gets caught lying – Employers will often ignore, bury, or deny conduct they consider potentially damaging.  Disclosure of this conduct by a plaintiff’s counsel will prove devastating.  Catch someone lying just once and you can instruct a jury that everything they say lacks credibility.  
  6. They never received or signed the agreement – The employment contract, the confidentiality agreement, the employee handbook, and the mediation and arbitration agreement are nowhere to be found in the employee’s file–if they exist at all.
  7. An overly aggressive approach – Whether on the leaning toward the plaintiff or defense, jurors dislike an overly aggressive presentation of the case.  They are particularly sensitive to an attack on non-party witnesses.  

The fact is, there are many more ways to lose at trial, and employers are doing it all the time.  Even if you “win” one of these cases you lose huge amounts of time and defense costs.  And when you lose a case, you can lose real big.  The best defenses against these claims are strategies and tools designed to prevent the filing of claims in the first place!

I hope the list above helps you make the right moves to stay out of court.

Patience Pays Off

Posted on March 2, 2012 by in Blog, Case Studies

The owner of a $20MM run rate energy related machine shop started thinking about selling his company in the middle of 2009. We met and discussed the state of the market. Seeing that his revenue was down 40% from the peak of 2007, we recommended patience. The energy market is very cyclical and we believed that we were in the trough. He already had a sophisticated financial accounting program.

The Transaction

We formally engaged this company in 2011 and started the process of taking in to market. With the energy market near the peak, or at least much improved over 2009, we found multiple interested parties. We found and negotiated a deal with a private equity group that already owned a significant company in this industry. The deal ended up as a fair deal and good multiple based on a record breaking year of earnings. The management team was well taken care of in the transaction.

The Moral of the Story

Patience paid off for this business owner. He had the foresight to get professionals involved in his company early in the process of his transition. The value created in the three years from when he first contemplated his exit was sizable (on the scale of $10MM). The systems he put in place made the company attractive to buyers and relatively easy to prove earnings and profitability.