Category Archives: Industry News

Ikea Halts Expansion in Russia due to Corruption

Ikea, the world’s biggest home-furnishings retailer, has been held up over the past few years as the model of a company that has opened in Russia while refusing to compromise their corporate standards on bribery and standards.  But, apparently they’ve had enough.  The company says it won’t build more stores outside the Moscow region until local officials stop withholding permission for two of their outlets due to Ikea’s refusal to pay bribes to safey inspectors.

Ikea’s experience is not unique.  Carrefour, Wal-mart, Royal Dutch Shell, and Nestle SA have all faced trumped up government regulation according to the National Anti-Corruption Committee, a NGO based in Moscow.  To read more, find the Bloomberg article here.

RILA Loss Prevention Show

The Retail Industry Leaders Association’s Loss Prevention, Auditing, and Safety Conference will be held this year from April 11-14th at the Gaylord Palms Resort and Convention Center in Orlando, FL. I’ve had the opportunity to participate in this event over the last several years and have always walked away with lots of new ideas and insights as a result. This year’s agenda is loaded with some great sessions and I will be highlighting a few of them over the next several weeks to give you some ideas about why you should be there next month.

On Thursday, April 14th, there is going to be a great opportunity to hear from some of the leading Loss Prevention executives in the industry about the challenges they are facing, the issues that keep them up at night, and how their strategies are evolving and changing with the needs of their businesses and the economic context of the last few years. Joining Lisa LaBruno, Vice-President of Loss Prevention and Legal Affairs for RILA, will be:

  • Monica Mullins – Vice-President of Asset Protection & Safety for Wal-mart Stores
  • Mike Lamb – Vice-President of Asset Protection for The Home Depot
  • Paul Stone – Vice-President of Asset Protection for Best Buy

This is a great line-up of seasoned veterans who run the AP efforts at some of the most successful organizations in the industry. There will also be an opportunity to ask them questions that are on your mind and get their input to help you inform your own thought process. In fact, at the end of this post, I will give you a link to submit questions in advance to be incorporated into the session.

I’ve had a chance to talk with each of the panelists this week and get some insights into what is on their minds for this session. There were three themes that emerged from these conversations. First, everyone talked about the challenge of attracting and developing great talent for their Asset Protection group. In an environment where everyone is doing “more with less,” the need for outstanding individuals is obvious but the other challenge I heard from them was how to dedicate time on everyone’s busy schedules to make sure managers are spending time on development and not putting it behind other, pressing issues. These panelists will share how they are able to prioritize this issue despite the pace of the business that only gets faster.

Second, the panelists talked about the need to constantly recalibrate and examine their own strategies for their departments and how they must change over time based on needs of the organization, budgetary considerations, and results. How broad of a role should AP/LP play in operational issues, safety, merchandising, and risk management? Does expanding the role of your team create a risk of taking the focus off of shrinkage results and “core” responsibilities such as investigations, physical security, and operational controls? I know from conversations with executives from across the industry that this is a top-of-mind issue for many, so this session will help inform your thinking on how you approach this for your company.

Third, everyone talked about the need for developing strong business cases and return on investment models for their programs and proposals. While others may think that budget dollars flow more easily in large organizations represented by the panelists, they can assure that they do not. Like almost every loss prevention executive I know, each of them stressed the importance of this issue and several talked about how it has led them to look for fewer “cookie cutter” approaches and more individualized strategies by region, district, and store.

Those three themes alone would make for a compelling reason to attend, but the most anticipated part of this session will be the opportunity to present questions to the panel that are on your mind and have them respond. If you have a question or issue you would like to see addressed, please email kylee.coffman@rila.org. Thanks for your input and I look forward to seeing you in Orlando!

FMI Asset Protection Conference – 3/6-3/9/2011

The Food Marketing Institute (FMI) Asset Protection Conference will be held next week in Orlando, FL at the Buena Vista Palace Hotel.  This conference focuses on the grocery and pharmacy segments and their particular risks, exposures, and concerns.  Rhett Asher, Vice-President of Industry Relations, has worked with industry leaders to put together a full agenda and the weather looks like it is going to be great.  The event kicks off on Sunday night with a welcome reception.  For more information, visit the above link.

Fraud/Corruption Continues in the Spotlight

It seems as if there is no end to high profile fraud and corruption cases in the news.  In the past couple of weeks, we’ve seen the two senior executives at China’s leading e-commerce site, Alibaba, resign due to pervasive fraud on their site and the former Security Director for Rooms to Go charged in a major kickback scheme by federal prosecutors.

In addition to the direct losses caused by these types of frauds, organizations face business disruption, bad publicity, and, in the case of U.S. organizations, potential Sarbannes-Oxley issues or FCPA compliance liability if the fraud or kickback involves government officials.  While this has typically been the domain of the finance or internal audit group, the Loss Prevention/Asset Protection function may have a role to play.  This topic certainly merits a conversation with your organization’s CFO to discuss how your function can support and assist on this important topic.

FCPA Enforcement on the Rise

The Foreign Corrupt Practices Act (FCPA) continues to be an area of increased enforcement by U.S. agencies.  Eight of the top 10 FCPA settlements have occurred in the past two years and leadership at the SEC, DOJ, and the Attorney General have made it clear they intend to expand focus on this area.  Both the SEC and FBI now have dedicated FCPA teams and the recent Dodd-Frank Act has provided for increased “bounties” for whistle blowers.

In addition, the UK Bribery Act of 2010 is currently scheduled to be implemented in April of this year.  This act goes beyond the FCPA’s focus on bribery involving government entities and expands the scope to commercial bribery.  The UK Act, as currently drafted, also eliminates exceptions for “facilitation payments.”

If you have retail operations, sourcing offices, or manufacturing operations in other countries, you had better be sure you understand these regulations, the duties they impose, and the potential consequnces of violations by your organization, any subsidiaries, and any contracted third-parties.  If you are not sure what your responsibilities are, email us and we can discuss.