Corporate governance - Vigil

Three Strategies CEOs Can Practice To Build An Empathetic Leadership Team

The restaurant technology provider Toast whetted the appetite of investors in one of the year’s largest US listings on Wednesday, leading a wave of consumer-focused companies hoping that enthusiasm for new technology will override recent jitters about the health of the economic rebound.

Global investors are watching nervously
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as one of China’s biggest real estate developers struggles to avoid defaulting on tens of billions of dollars of debt, fueling fears of possible wider shock waves for the financial system.

When the European Union launched the euro two decades ago, economists wondered if the new currency might pull off a feat no other had managed in the post-war period: to challenge the mighty American dollar. However, reserve managers at the world’s central banks, as well as businesses around the world, largely stuck with the greenback. Now Europe is having another go at establishing the bona fides of the euro beyond its borders. A significant step was taken on June 15th when €20bn-worth ($24.3bn) of bonds was issued as part of the Next Generation eu (ngeu) scheme to boost European economies. Those bonds could yet rival American Treasury bonds as a safe asset of choice.

In our new paper, SPACs: Insider IPOs, we report hand-collected empirical data from initial and final prospectuses of all SPACs that filed an initial prospectus from 2010 to 2018. This window of time allows each SPAC from this period to play out the entirety of the contractual search period, with the most recent deals concluding in 2020 and 2021. Our findings conclude that SPACs are illiquid and do not demonstrate the sophistication expected of publicly traded firms, as measured by the periodic filings (10Ks and 10Qs) that the law requires.

The Council of Institutional Investors (CII) has urged FASB to make ESG-related disclosures one of its top priorities amid growing pressure for companies to enhance reporting around those issues.

Specifically, CII believes FASB could improve ESG-related reporting concerning human capital management, climate change and income taxes.

A look at new directors on TSX 60 boards suggests that boards would benefit from seeking a new balance between directors who meet traditional expectations and those who meet fast-changing stakeholder demands.

SSE has resisted pressure from a combative American activist investor to break itself up through a separation of its renewable power division.

PSA Peugeot’s takeover of Fiat Chrysler to form the world’s fourth-largest car maker has had its first executive casualty, with former Fiat Chrysler CEO Mike Manley stepping down as his role of head of the Americas.

Hydro-Québec has won a multibillion-dollar contract to deliver power into the heart of New York City, in a deal that helps cement the provincially owned corporation as a key supplier of clean electricity in North America.

When it comes to ESG, all attention is on the ‘E’ with COP26 on the horizon and the recent publication of the grave IPCC Report into climate change. At the same time – and as we recently highlighted in Business Leader – the rise of ‘S’ has seen both companies and investors wake up to societal and cultural trends in terms of diversity & inclusion, equality, human rights supply chains and so on.

However, for business, what must not be omitted from general discourse is the ‘G’, governance. 

Good corporate governance is a bedrock of corporate America, with a central tenet being the board of directors’ role in effectively overseeing and monitoring the firm. Recently, institutional investors have focused on changing board composition. Beginning in 2017, two of the “Big 3” institutional investors, State Street and BlackRock, began an ESG activist campaign for their portfolio firms to include women on their board of directors, voting consistently against directors on the nominating committee if the firm presented a ballot of directors with zero women. Prominent proxy advisors, including ISS and Glass Lewis, also have advanced voting policy guidelines that reflect commitments to board gender diversity. In 2020, Goldman Sachs joined this campaign by announcing it would not underwrite IPOs in the U.S for firms with all-male boards of directors.

This is the whole game. Cyber security is an enterprise-wide risk management issue, not just an IT issue.

Boards need to constantly be looking beyond the headlines that detail the latest breach and consider how they can learn from attackers’ latest methodologies and strategies and ensure the organizations they oversee are prepared. Board and management discussions should include identification of which risks must absolutely be prevented and which to mitigate or transfer through insurance, as well as what specific roadmap and plans are in the company’s detailed cyber plan.

Activist hedge fund Bluebell Capital Partners has taken a small stake in pharma group GlaxoSmithKline to push for chief executive Emma Walmsley to reapply for her job, backing proposals put forward by fellow investor Elliott Management.

ACROSS THE world, a natural-gas shortage is starting to bite. Prices of power in Germany and France have soared by around 40% in the past two weeks. In many countries, including Britain and Spain, governments are rushing through emergency measures to protect consumers.

Companies traditionally communicate their sustainability activities to stakeholders through large, comprehensive reports, often running more than 100 pages, that go by a number of different names: Corporate Social Responsibility (CSR), Environmental, Social & Governance (ESG), or Sustainability. Almost all S&P 500 companies issue these reports, indicating that sustainability storytelling is now mainstream and expected of large US companies. In addition, companies increasingly customize information on their sustainability initiatives for rating agencies, business partners, regulators, and others.

Over the years, we have repeatedly underscored that effective implementation of well-designed procedures for responding to corporate crises, including for properly addressing whistleblower reports, is critically important in light of increased governmental enforcement activity and the value of securing credit for cooperation and remediation efforts. In yet another reminder of why such preparation is so vital, the SEC announced last week that, with its most recent awards, it has paid more than $1 billion to whistleblowers since the inception of its formal whistleblower program in 2012, and that the pace of such awards in 2021 is at record levels

Power utility SSE said it had not made a decision to break itself up following pressure from Wall Street activist fund Elliott Management.

Companies without any ESG expertise at the board level tend to underperform on sustainability compared with those that do have ESG experts, according to a joint survey by NN Investment Partners and Glass Lewis.

DraftKings, the US fantasy sports and sports betting company, has made a roughly £16.6bn offer for the UK gambling company Entain, the second time this year a rival has sought to acquire the business and consolidate the fast-growing US market.

Shell’s proposed deal to exit from the top U.S. oil field comes as the industry faces pressure to lower emissions

Many boards aren’t fully prepared for CEO departures despite succession planning being one of their primary responsibilities. If we’ve learned anything during the pandemic, it’s that anything can happen. There are important steps directors can take to be better prepared for both planned departures and the unexpected.

When it comes to ESG, all attention is on the ‘E’ with COP26 on the horizon and the recent publication of the grave IPCC Report into climate change. At the same time – and as we recently highlighted in Business Leader – the rise of ‘S’ has seen both companies and investors wake up to societal and cultural trends in terms of diversity & inclusion, equality, human rights supply chains and so on.

However, for business, what must not be omitted from general discourse is the ‘G’, governance.