Corporate Email

My love of corporate scandals and the incriminating emails that follow has been well documented. Mostly because of 1) how honest their emails are about the crimes they are committing and 2) really bad spelling and grammar. There must be a correlation there, right? People that bend over backwards to commit crimes could assuredly achieve better results if they put that effort towards honest work, so the crime itself is stupid. Imagining that no one reads corporate email even though they signed an agreement to have their email monitored is stupid. Then, not knowing how to spell basic words when most email programs tell you how to is, in a way, even more stupid. It’s great! When money and stupidity connect, there is compliance. CNBC wrote about email surveillance on Wall Street.  Many banks and investment institutions use computers to flag emails, which are then reviewed by a person or team of people to look for violations of the company’s policies. This results, I imagine, in an endless parade of emails flagged for review that have nothing to do with crimes. According to Tim Estes, CEO of Digital Reasoning, 90%-99% of emails flagged are false positives. I read an article a few years ago that examined TSA employee’s ability to find bombs in luggage. TSA agents went through a rigorous simulation where they reviewed x-ray images and had to determine if there was a bomb in the luggage. It turns out that they are very good at finding things that look like bombs but not very good at finding actual bombs. They flagged lots of hair dryers and computer equipment but missed most of the actual explosives. The reality is fairly alarming, but I like to think that the examiners were just messing with them. “That? No, that’s not a bomb. That’s a candle shaped like a bowling ball. You’re fired.”  Well the world of email surveillance is like that, but instead of looking at mundane luggage all day it’s an endless stream of bad grammar and office squabbling. Part of it must be attributed to the software programs themselves. In my experience, where Wall Street and compliance are concerned, well, the article actually said it really well: “Keep in mind that the compliance industry is based on ‘complying’ with the law, not doing what is right.”  This results in hilarious and troubling “buzzwords” flagged by the computers. The most interesting iteration of this is the software that will “ferret out employees who might be about to become whistleblowers.” Companies that use that software insist that they are not trying to prevent whistle blowing, but rather, they want to “ensure that the employee attempting to distribute such information is allowed to do so through the proper channels.” Right. Clearly, this is an extremely depressing job and most people don’t stay long. “I don’t know anybody who’s done it for more than two years,” lamented one expert.  Maybe they should just let the computers take over? There was an interesting experiment in 2003 at Washington University. They used an advanced algorithm to analyze court cases and found that the software could predict future legal outcomes accurately 75% of the time. A panel of legal experts were able to do so 59.1%. It’s not hard to imagine a world where computers are completely responsible for email monitoring and compliance.

Motivation in China

In China, banks are doing more than just monitoring employee emails. A motivational trainer was filmed beating eight bank employees with a stick after they performed poorly on a training weekend. After that he shaved the men’s heads and cut the women’s hair. Is this an example of a glass ceiling? I know women are often treated differently than their male counterparts in business but in this case it seems like they are being treated better? Maybe the women feel like their heads should have been shaved too. According to the trainer, Jiang Yang, “Spanking was a training model I have been exploring for many years.” Honestly, the whole thing reads like satire. The bank’s chairman and a deputy governor were fired, which feels like the obvious outcome. However, the article is silent on if the bank will continue using the training company. Probably not, right? I’m not surprised that people were outraged but I am surprised it happened at all. Not that a trainer would beat people with a stick. I have often wanted to beat an employee with a stick, but the trainer told the employees to line up and prepare to be beaten. And they did. I assume they also held still while he cut their hair, too. I like my job but I would never let Jeff hit me with a stick. I also wouldn’t let him cut my hair, but only because I think he’d do a bad job.

Facebook Stock

The debate has been heating up regarding Facebook stock as they prepare to issue “Class C” shares. Many shareholders (current and potential) are upset and are citing issues with corporate governance as chief amongst their concerns. Currently, Facebook has two share classes: A and B. A shares are publicly traded and B shares are not. B shares are also mostly owned by Mark Zuckerberg. Class A shares allow the shareholder one vote per share and Class B allow 10 votes per share. Essentially, this allows Mark Zuckerberg to do whatever he wants with Facebook even though he owns only 15% of the company on paper. Class C shares do not come with any voting rights – it’s an interesting argument. Opponents say it’s not responsible for a company to allow one person to be able to control the direction of a $245 billion business. The voting structure of the shares is not a secret, and I feel like if you don’t like it, maybe don’t buy the stock?  At the very least it leads to some interesting annual meetings. At the most recent meeting Christine Jantz of Northstar Asset Management stated, “It will continue to become impossible for outside shareholders to have any input on company decisions.” To which, I have to imagine, Zuckerberg said, “Yup.” You don’t really see that anywhere else. I drive a Honda Civic and I doubt anyone goes back to the Honda dealership and shouts at the salespeople, “It’s not a Ford! Make it a Ford!” What are people hoping to accomplish? The share structure at Facebook exists for the explicit reason that Zuckerberg doesn’t care about or want to know what shareholders are thinking. That’s the whole point. Telling him about the structure won’t change his mind. He designed it.

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