After American Express shareholders got burned by the salad oil scandal in 1963, in which inventories of salad oil dressing were literally watered down and falsified as a secured asset, the company itself overhauled its internal processes to avoid future fraudulent activity, seemingly taking to hear the notion “Fool me once, shame on you. Fool me twice, shame on me.”
In more recent memory, Chipotle the business had to deal with the fallout after E Coli and all his little minion friends started showing up in the burritos, prompting hundreds of millions of dollars into food quality assurance in response.
Usually, when an internal control at a large publicly traded company with a vested institutional shareholder base is proven insufficient, the response is to deploy such extensive resources to the area of failure to overcompensate for the failure and ensure that it does not happen again.
I call this the … Read the rest of this article!