Chinese Wall

Knowledge Center



Summary, forum, best practices, expert tips and information sources.


Summary

What is a Chinese Wall? Meaning.

A Chinese Wall is a metaphor for a virtual barrier to the flow of information between two different functions of an organization, in order to prevent possible conflict of interest. Typically, the wall is purely conceptual, although sometimes functions may be divided by physical barriers (areas of a building, for example) as well as policies.
 

Such walls were supposed to exist between the auditing function and the consulting divisions of big auditing firms. However the Enron/Anderson Consulting case showed that these walls did not work well here.


In banking, a Chinese wall is supposed to exist between the M&A function in the investment bank section and the brokerage function, advising clients about investments. Again, passing information through the wall, although forbidden, has occurred, because it can be extremely lucrative. During the dot.com rush passing this kind of information through the "wall" was not unusual and was a major cause of the stock crash in 2000.


Other (better) solutions to prevent conflicts of interest are to split certain companies, legislation (Sarbanes-Oxley), more attention for business ethics.


Microsoft OLE DB Provider for ODBC Drivers error '8007000e'

[Microsoft][ODBC Microsoft Access Driver] Not enough space on temporary disk.

/menu_comments.asp, line 144 Failed to execute script: Http Status Code = 500

Microsoft OLE DB Provider for ODBC Drivers error '8007000e'

[Microsoft][ODBC Microsoft Access Driver] Not enough space on temporary disk.

/menu_expert_tips.asp, line 941 Failed to execute script: Http Status Code = 500

Microsoft OLE DB Provider for ODBC Drivers error '8007000e'

[Microsoft][ODBC Microsoft Access Driver] Not enough space on temporary disk.

/menu_resources.asp, line 1630 Failed to execute script: Http Status Code = 500

Compare with: Initial Public Offering  |  Corporate Governance  |  Asset Management  |  Whisper Number  |  Ring Fencing

Special Interest Group

Are you interested in the Chinese Wall? Sign up for free

Notify your students

Copy this into your study materials:

and add a hyperlink to:

Link to this knowledge center

Copy this HTML code to your web site:

 
 

Return to Management Hub: Change & Organization  |  Communication & Skills  |  Ethics & Responsibility  |  Finance & Investing  |  Knowledge & Intangibles


More on Management  |  Return to Management Dictionary

 

This ends our Chinese Wall summary and forum.



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2021 12manage - The Executive Fast Track. V15.8 - Last updated: 13-4-2021. All names of their owners.












Microsoft OLE DB Provider for ODBC Drivers error '8007000e'

[Microsoft][ODBC Microsoft Access Driver] Not enough space on temporary disk.

/menu_resources.asp, line 1630 Failed to execute script: Http Status Code = 500