Corporate watch dogs online: as recent tales of corporate misdeeds emerge.

Publication: Online

Publication Date: 01-JAN-03

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Questions about who knew what, how much they knew, and when they knew it make us wonder why alarms did not sound sooner. It seems as if everyone who should have known, or might have known, didn't know or didn't say. Or did they? While the various players try to sort out the answers to these questions, it might be worth looking at who watches corporate activity and why. How much corporate watchdog activity can be tracked online? Where are the best places to look?

Corporate observers and watchdogs can be found both within the corporate structure and in many different types of organizations and agencies. Within companies, there are departments and units that control actions and expenditures and demand accountability. These include accounting, law, compliance, and product testing. Closely connected to companies and their concerns are the external accounting firms, law firms, contractors, and consultants who work for and with companies and their employees.

DOGGING THEIR STEPS

In many industries, where self-regulation plays a prominent role, the effectiveness of industry self-regulation and company accountability to stockholders and employees has long been questionable. As a consequence, there are watchdogs that observe the behavior of those companies that self-regulate. Groups perform watchdog-type functions in the course of addressing their agenda, even though it is not their main focus. Examples of this might be law firms that file class action suits on behalf of employees or consumers, and investor groups that monitor the activities of companies to protect their interests or to further a political agenda through social investing.

Both public and private companies have many outside observers watching them from a variety of vantage points with different degrees of proximity. Unions, professional associations, and trade associations frequently have close and immediate connections to the companies, their management, and their employees. Industry analysts and observers, investor groups, federal and local governments, quasi-governmental agencies, consumer groups, political activists, and the media as well as lawyers, consultants, and research organizations that support these groups can act as corporate watchdogs. These organizations range from nonprofit, nonpartisan consumer groups whose focus is on consumer protection to trade associations' public relations departments defending an industry in the guise of impartial outside observer.

DOGGEDLY PURSUING THE ISSUES

Observers of corporate activity generally focus on policy, actions, and accountability. Many kinds of corporate accountability exist, although we commonly think of it in terms of accounting and other financial issues. While investors are generally led to believe that there are checks and balances in place that would limit executive behavior in public companies, recent events such as stock fraud, excessive executive compensation, pension looting, financial disclosure and insider trading would suggest that, even in public companies, accountability may be more of an illusion than a reality.

Accountability does not only refer to financial matters--financial actions are not the only types of corporate actions under scrutiny. Other areas of accountability include corporate governance issues. In some industries, self-regulation of company actions and policies results in trade and professional associations playing prominent roles as industry watchdogs involved in product, pricing, and policy issues. Other issues include, but are not limited to, environmental issues, product safety and efficacy, pricing, employee benefits and working conditions, political contributions, and policies, politics,...

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