In his latest Smart Connection video, Joe Takash, the president of Victory Consulting, discusses building breakthrough business relationships.

If you have to work with people in any capacity — whether you actually like people or not — you are in the relationship business first. Takash highlights three key components for building breakthrough business relationships.

1.  Attitude and passion

2.  Engaging

3.  Recognition

Watch the video in its entirety here.

Joe Takash is the president of Victory Consulting, a Chicago-based executive and organizational development firm. He advises clients on leadership strategies and has helped executives prepare for $3 billion worth of sales presentations. He is a keynote speaker for executive retreats, sales meetings and management conferences and has appeared in numerous media outlets. Learn more at www.victoryconsulting.com.

Published in Chicago
Tuesday, 06 September 2011 14:58

Thinking about expanding your business?

Canada and the United States enjoy an economic partnership unique in the world, sharing one of the world’s largest and most comprehensive trading relationships. Growth in bilateral trade between Canada and the U.S. increased by almost 10 percent between 2009-2010. In 2010, total trade between the two countries exceeded C$502-billion, with C$1.38-billion worth of goods crossing the border every single day. For this reason, businesses looking for their first international foothold invariably look to Canada first.

While Canada is geographically proximate and closely tied to the U.S. by a common language and culture, there are distinctive legal, business and regulatory differences of which any business looking north of the border should be aware.

Taxation

Tax considerations will drive the structure of virtually any expansion into Canada. If it is desired to consolidate the Canadian operating results with those of a U.S. parent for U.S. tax purposes, consideration may be given to using a fiscally transparent entity, such as an Alberta or Nova Scotia unlimited liability company, having regard for the anti-hybrid rules in Canada’s tax treaty with the U.S. Such entities are taxed in Canada in the same manner as any other Canadian corporation. It is also possible to carry on business in Canada through a branch of the U.S. parent. There may be Canadian withholding tax on cross-border payments of dividends, interest or royalties. Canada’s tax treaty with the U.S. contains certain exemptions from and reductions in Canadian withholding and other taxes that may be applicable in certain circumstances. Canadian transfer pricing rules require cross-border payments for goods and services to be made on arm’s-length terms.

Foreign investment review

Every acquisition of control of a Canadian business or the establishment of control of a new Canadian business by a non-Canadian is notifiable or reviewable under the Investment Canada Act. Generally speaking, an investment that is reviewable cannot be completed until the responsible federal minister has declared the investment likely to be of “net benefit to Canada.” A monetary threshold test applies to the determination of whether an investment is reviewable. A higher threshold applies to investments by non-Canadians that qualify as “World Trade Organization (WTO) investors” or to acquisitions from WTO investors that are not Canadians. This higher threshold does not apply to investments in the following sensitive areas: uranium production, transportation services, financial services and culture businesses.

Beyond the Investment Canada Act, there are Canadian ownership and licensing restrictions on businesses providing, among others, telecommunications, transportation and financial services. Canada has also identified certain culturally sensitive areas, such as publishing and broadcasting, that may be subject to ownership restrictions.

Corporate and securities laws

Canadian corporate legislation exists at both the federal and provincial levels while securities legislation only exists provincially. Mergers and acquisitions transactions are broadly similar to those in the U.S. Private transactions are effected as share or asset purchases while public transactions proceed as take-over bids (tender offers), amalgamations (mergers) or plans of arrangement (a court-supervised process more flexible than a merger).

International Trade

Canada is a member of the World Trade Organization and a party to the various WTO trade agreements. Canada and the U.S. are both parties to the North American Free Trade Agreement (NAFTA). Therefore, many of Canada’s customs and trade laws should be similar to those applicable in the U.S.

All goods imported into Canada are subject to Canada’s customs and sales tax laws. Issues such as tariff classification, valuation, origin, marking and labeling should be considered before commencing to ship goods to Canada. It is important to properly structure the Canadian business in order to minimize or eliminate customs duties and taxes whenever possible. Determining whether NAFTA rules of origin are satisfied (and supplying documentation if they are) will avoid potential civil liability for non-compliance with customs laws and manage customs costs.

As Canada’s Export and Import Permits Act imposes significant restrictions on the movement of goods into, around and out of Canada, it may impact the valuation of operations and strategic planning. However, virtually all domestic regulation in Canada is subject to NAFTA, and certain American parties may request review of an alleged violation by a NAFTA panel.

Antitrust

Mergers that exceed certain prescribed thresholds are subject to mandatory pre-merger notification under the Competition Act. These mergers cannot be completed until the parties have submitted their respective notifications and the mandatory waiting period has expired, been waived or terminated early. All mergers, regardless of whether they are subject to pre-merger notification, are subject to the substantive provisions of the Competition Act.

Intellectual Property

Canada’s patent eligibility is based on “first to file,” unlike its American “first to invent” counterpart. Novelty bars, the obviousness test and prosecution history all differ vastly from the U.S.

The importance of licenses is heightened in Canadian trademark law, which requires licenses even for wholly owned subsidiaries. Canada has not adopted the Nice International Classification System, which provides a distinct cost advantage. Registrants can also renew trademark registrations without proof of use.

Privacy

Canadian privacy legislation requires informed consent to the collection, use and disclosure of personal information, instead of merely notice of those purposes as permitted in the U.S. Public as well as non-public personal information is covered by legislation, which applies to affiliated organizations and third parties. There are both provincial and federal privacy standards that apply to the collection, use and disclosure of personal information before, during and after a transaction.

Information Technology

Federal misleading advertising, provincial consumer and French language protection laws may apply when parties use the Internet for sales or advertisement purposes. Provincial sales taxes may apply to software licenses depending on the server and user locations. This may result in double tax if not structured strategically. Custom software use by an affiliate may result in loss of provincial sales tax exemptions.

Blake, Cassels & Graydon LLP (Blakes) is one of Canada’s leading business law firms with more than 550 lawyers in offices in Montréal, Ottawa, Toronto, Calgary, Vancouver, New York, Chicago, London, Bahrain, Beijing and associated offices in Al-Khobar and Shanghai.

John Kolada is the Chicago Office Managing Partner of Blake, Cassels & Graydon LLP. Reach him at (312) 739-3612 or john.kolada@blakes.com.

Stefan Timms is an Associate of Blake, Cassels & Graydon LLP. Reach him at (312) 739-3625 or stefan.timms@blakes.com.

Published in Akron/Canton
Monday, 14 May 2012 15:15

Auditing at the speed of business

Companies are affected by external environments that are constantly changing due to new technologies, regulations and economic conditions. With the speed of these changes, audit committees and management are demanding their internal audit functions to provide increased, faster assurance.

To meet these growing expectations, internal audit groups can no longer afford to dedicate significant resources to routine functions as opposed to focusing on new risks arising from these changing environments. A good way to provide assurance on high-volume, stable processes — including procurement, AP, AR, etc. — while reducing resource requirements, is through continuous auditing.

What is continuous auditing?

Continuous auditing is the routine use of electronic auditing tools and methods. Electronic tools offer advantages over the traditional audit process, such as the ability to effectively and efficiently analyze an entire data set, rather than testing by sampling. They also allow you to automate these processes for repetitive performance, creating the ability to schedule analyses at any time.

How continuous is continuous?

“Continuous” has different meanings depending on the business process audited. For example, you may perform a daily audit of potential duplicate invoices but only search for vendors related to employees once a month. In both situations, the audits are on a routine, continual basis. The key is identifying the risk inherent in the process and determining how quickly you can identify potential problems. That speed is the definition of continuous for that process and is, essentially, the speed of your business.

Continuous auditing versus continuous monitoring

The phrases “continuous auditing” and “continuous monitoring” are commonly used interchangeably, but differentiating between the two is important for organizations looking to implement continuous auditing. While the underlying principles are very similar, process ownership and problem resolution differ significantly. Internal audit owns the continuous auditing process and provides results to process owners, e.g., accounts payable directors, for resolution. Management is responsible for continuous monitoring and resolution of identified problems.

Despite these differences, the two processes are closely related, and many procedures are the same in both. Internal audit groups often provide significant value to their companies by developing, testing and finalizing a continuous auditing process; once the kinks are worked out, they provide management with that process as their continuous monitoring process. Continuous auditing and monitoring processes are inversely related — the more monitoring management performs, the less auditing is needed by internal audit. This is a win-win proposition: Internal audit has just provided value to their company while reducing the resource commitment needed to maintain assurance over that control environment.

Case Study

A multibillion-dollar manufacturing company’s internal audit department performed many electronic tests on an ad hoc basis, using sampling to accomplish its goals. It decided to implement continuous auditing for related-party testing and duplicate payment testing within accounts payable. After identifying risks and designing the tests accordingly, the company can now analyze its entire vendor and employee population (more than 100,000 vendors and nearly 10,000 employees) for potential relationships. In addition, it can analyze more than 2 million payment records for potential duplicate payments with 100 percent coverage.

Getting started

To begin implementing continuous auditing in your organization, there are three key items to address. The first is risk. A well-designed continuous audit program focuses on key organizational risks. You also will need to identify an electronic audit tool that meets your organization’s needs. With multiple tools available, it is important to research tools and consider the features in relation to your organization’s risks and areas of personnel expertise. Finally, determine what data are available in your accounting systems. This may include conversations with your information technology staff and process owners. This process is integral in designing your continuous auditing program.

After addressing these areas, you are ready to embark on the journey to continuous auditing — auditing at the speed of your business.

For more information, contact a BKD advisor. To reach Selina Wilbur, mail to swilbur@bkd.com. To reach Jeremy Clopton, mail to Jclopton@bkd.com.

Article reprinted with permission from BKD, LLP, bkd.com. All rights reserved.

 

Published in Dallas

The State of Iowa is leading the way in renewable wind energy. Renewable wind energy is cost effective and environmentally friendly, and Iowa has the land — and the wind — needed to provide that energy.

Because of this, many companies are moving to Iowa to be more environmentally conscious — and to make their business dollars go farther.

The Iowa Department of Economic Development (IDED) has many programs and services to offer individuals, communities, and business. The IDED strengthens economic and community vitality by building partnerships and leveraging resources to make Iowa the choice for people and business. For more information on the Iowa Department of Economic Development, visit www.iowalifechanging.com.

The Iowa Alliance for Wind Innovation and Novel Development is designed to support the State of Iowa in its efforts to continue to attract and nurture wind energy and related industries. The Midwest in general, and Iowa in particular, is uniquely positioned to respond to the need for renewable energy and to take advantage of the opportunity in this growth industry. Iowa is at the heart of the nation’s wind resource and the gateway to renewable energy demand. For more information on the Iowa Alliance for Wind Innovation and Novel Development, visit www.iawind.org.

Published in Atlanta

You probably have read much about the basics of ethics, leadership, stewardship, morality and social responsibility. Accordingly, you have most likely formed a good understanding of them based on your experiences and thoughts.

However, most people do not really take the time to understand the true meaning of values, ethics and morality.

Values are core beliefs or desires that guide or motivate our attitude and actions. What one values drives his or her behavior. Some people value honesty or truthfulness in all situations; others value loyalty to a higher degree in certain situations.

Ethics is the branch of philosophy that theoretically, logically and rationally determines right from wrong, good from bad, moral from immoral and just from unjust actions, conducts and behavior. Some people define ethics simply as doing what you say you will do or walking the talk.

Overall, ethics establishes the rules and standards that govern the moral behavior of individuals and groups. It also distinguishes between right and wrong conducts. It involves honest consideration to underlying motive, to possible potential harm and to congruency with established values and rules.

Applied ethics refers to moral conclusions based on rules, standards, code of ethics and models that help guide decisions. There are many subdivisions in the field of ethics; some of the common ones are descriptive, normative and comparative ethics. Business ethics, more specifically, deals with the creation and application of moral standards in the business environment.

Morals are judgments, standards and rules of good conduct in the society. They guide people toward permissible behavior with regard to basic values.

Consider the following dilemma and how the terms values, ethics and morals apply.

A thief named Zar guarantees that you will receive the agreed upon confidential information from your competitor in five days. Zar is professing a value -- he will deal with you honestly because you, as the customer, are very important to his business. When Zar has delivered the proper documents within the agreed upon time (five days), one can say that Zar has behaved ethically because he was consistent with his professed values.

The following year, you ask Dar, who is a competitor to Zar, to do the same thing. He makes the same promise as Zar by professing the same values. Five days later, Dar only delivers part of the information, which is not totally accurate, and at the same time, blackmails you for more money. Dar says that if does not get more money, he will go to the authorities and the competitor to report this business dealing.

One can say that Dar has behaved unethically because his actions were not consistent with his professed values. And, you can conclude that all three parties involved in stealing insider information have acted immorally as judged by majority of the population.

Overall, values are professed statements of one's beliefs, ethics is delivering on one's professed values and morals are actions of good conduct as judged by the society that enhance the welfare of human beings.

With an understanding of values, ethics and morals while using ethical principles, a business owner or leader can form a framework for effective decision-making with formalized strategies. The willingness to add ethical principles to the decision-making structure indicates a desire to promote fairness, as well as prevent potential ethical problems from occurring.

Corporate ethics programs are part of organizational life, and organizations can use such sessions to further discuss the meaning of values, ethics and morals in the context of their businesses. Organizational codes of ethics should protect individuals and address the moral values of the firm in the decision-making processes.

Corporate codes of ethics are not merely manuals for how to solve problems; they are tools that can empower everyone in the organization to say, "I am sorry, that is against our policy or that would violate our company's code of ethics."

Doing so will increase the personal commitment of employees to their companies because people take pride in the integrity of their corporate culture.

Bahaudin Mujtaba, D.B.A., is an assistant professor and the director of institutional relations, planning and accreditation, for Nova Southeastern University at the School of Business. He is a former senior training specialist and manager of Publix Super Markets. Bahaudin recently co-authored a business ethics textbook published by Pearson Custom Publications. Reach him at (954) 262-5045 or Mujtaba@nova.edu.

Published in National
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