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In the last downturn, Chinese demand helped revive many economies. Economists say it likely won't come to the rescue this time. 
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Companies are realising that higher wages for the less well-off can pay for themselves
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Semiconductor maker Analog Devices Inc. is in talks to buy rival Maxim Integrated for roughly $20 billion in what would be one of the largest merger deals of the year, according to people familiar with the matter.
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For Canada Goose Holdings Inc., the crisis has helped validate the company’s approach to manufacturing on its home turf, rather than being dependent on offshore suppliers.
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Bosses claim that their firms’ superior returns justify their own hefty pay cheques. Really?
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Canadian convenience store giant Alimentation Couche-Tard Inc. is hunting for a partner willing to take over a major block of gas stations in the United States as it lays the groundwork to mount a multibillion-dollar takeover offer for Marathon Petroleum Corp.’s Speedway chain, according to a person with knowledge of the situation. Laval, Que.-based Couche-Tard, owner of the Circle K banner, is engaged with Marathon in a sales process for Speedway, and other suitors, including 7-Eleven parent Seven & I Holdings, are also in the picture, the person said. Winning Speedway could cost upward of US$15-billion, dwarfing any of the Canadian company’s previous acquisitions. To make a transaction work, Couche-Tard is looking for a buyer for an estimated 1,200 fuelling stations it would likely have to divest to buy Speedway, the person said. A sale of all the properties could fetch in the range of US$4-billion. Couche-Tard has about 7,300 U.S. stores in all, most of them gas stations that also sell food and drinks. The Globe and Mail is not naming the person because they were not authorized to speak about the matter. [...] “I’d ascribe a greater than 50-per-cent probability of Couche-Tard making a bid at this point. Whether they win or not is another story,” said Brian Madden, senior vice-president of Toronto-based Goodreid Investment Counsel Corp., which holds Couche-Tard shares among $350-million in assets under management.
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“Throughout this crisis, Donald Trump has been almost singularly focused on the stock market, the Dow and Nasdaq. Not you. Not your families,” Biden said Thursday in a speech in Pennsylvania.
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In spite of the highly concentrated ownership of listed companies, Italy is one of the countries in which institutional investors are on the rise and are playing an increasingly active role in the governance of their investee companies.Against this background, the goal of this paper is to provide a comprehensive analysis of institutional investors’ stewardship in Italy, by illustrating some distinctive features, which make the Italian regulatory system unique in promoting active institutional ownership. In particular, a distinctive characteristic of the Italian corporate governance system is the so-called slate (or list) voting system, which enables minority shareholders to appoint at least one board member. In addition, the implementation of the Shareholder Rights Directive and, specifically, the record date system for participating in and voting at general meetings has contributed significantly in turning institutional investors into major players in the corporate governance arena. Moreover, this favorable regulatory context is coupled with the particularly effective role played by the Investment Management Association representing most Italian and foreign asset managers operating in Italy (Assogestioni) that publishes the Italian Stewardship Principles and promotes collective engagement initiatives aimed at facilitating the appointment of members of the management and the statutory auditors’ boards through the slate voting system.
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Asset managers are gearing up for a battle with the Trump administration over a new proposal that threatens investors’ ability to incorporate environmental, social and governance principles into pension portfolios. Late last month, the Department of Labor proposed a new rule that would require private pension administrators to prove that they are not sacrificing financial returns if they put money in ESG-oriented investments. “Private employer-sponsored retirement plans are not vehicles for furthering social goals or policy objectives that are not in the financial interest of the plan,” said Eugene Scalia, the labour secretary. The new rule builds on the department’s existing guidance on private pension investing, which allows investors to consider sustainability factors for the purpose of increasing returns. But the full text of the proposal has set off alarm bells across the asset management industry, where ESG-themed funds have been a big success, attracting tens of billions of dollars of investment in recent years. Critics argue that, instead of protecting retirees from decisions that prioritise politics over returns, the rule may put them at greater risk by hindering their ability to fully analyse the companies in which they invest. [...] But just 3 per cent of US corporate defined contribution plans offered an ESG-themed investment option in 2018, according to the most recent data from Plan Sponsor Council of America, an industry body. [...] “Investors who do not recognise this new reality and do not integrate ESG factors are now in serious danger of violating their fiduciary responsibility to their clients by leaving money on the table and not taking into account these factors that can actually improve performance,” he said.
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The wealth of North America’s richest people grew at a faster pace than their Asia-Pacific counterparts last year for the first time since 2012, according to research by Capgemini. The U.S. and Canada led the way in terms of both high net worth individual (HNWI) population and wealth growth in 2019. Capgemini’s widely followed annual World Wealth Report, released today, shows the number of HNWIs in North America (defined as having $1 million or more of investable assets) rose by 10.9% to 6.3 million. Their total worth increased by 11% to $21.7 trillion, marginally ahead of U.S. GDP, which stood at $21.4 trillion in 2019. The surge in North American wealth generation compared to an 8.8% rise in the global HNWI population to 19.6 million, and an 8.6% rise in their total worth to $74 trillion. “For the first time since 2012, the Asia-Pacific region did not lead global HNWI wealth growth (or decline in 2018). North America was the driving force in 2019. It accounted for 39% of global HNWI population gains and 37% of HNWI wealth growth ($2.2 trillion),” Capgemini said.
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The investment agency that manages the Alberta government's long-term savings fund and tens of billions of dollars from public-sector pensions admits it under-performed in 2019, the same year it came under intense scrutiny following controversial legislation that broadened its portfolio. "Despite all of AIMCo's asset classes earning strong absolute returns in 2019, our performance fell below benchmark," chief executive officer Kevin Uebelein said in the Crown corporation's annual report, released Thursday afternoon. "While we have bested the benchmark in 10 of the past 12 years, we acknowledge that in the short term we have not met our clients' expectations." The report reveals that AIMCo's aggregate net return for its investments was 10.6 per cent — half a per cent lower than its benchmark. [...] Over the past year, criticism of AIMCo's performance has increasingly entered the public sphere. In November, the UCP government passed a controversial omnibus bill that mandated the corporation manage the investments of three major pension plans for police officers, municipal workers, health-care workers, and many others. The legislation also required the Alberta Teachers' Retirement Fund — an independent corporation that manages $18 billion of assets on behalf of more than 80,000 members — to begin using AIMCo as an investment manager by the end of 2021. It further prohibited any public-sector pension plan from withdrawing from AIMCo as an investment manager.
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CEO activism – CEOs expressing their views on social, environmental, and political issues – is growing, likely driven by popular opinion that CEOs have a duty to stand up for important issues of the day. A 2018 survey of 3,544 individuals across the U.S. found that 65 percent of respondents think “CEOs of large companies should use their position and potential influence on behalf of environmental, social, or political issues that they care about personally.”[1] CEOs themselves recognize this pressure. [...] However, BLM has been around since 2013, yet none of these CEOs took a position until recently. While supporting BLM may seem like an obvious response, given the recent shift of public opinion toward favoring the movement, there are various other polarizing social issues, such as gun control and abortion, on which CEOs engage in activism. A 2018 study found that 28 percent of S&P 500 CEOs made “public statements about social, environmental, or political issues either personally or on behalf of the company” through the news media. Additionally, of the S&P 1500 CEOs with active Twitter accounts, 68 percent “tweet[ed] at least once advocating an issue” in a recent three-year period.[3]
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As companies extend commitments to remote workforces, cybersecurity teams need to address new risks while helping create business value in the next normal. As the COVID-19 pandemic swept across the world, most organizations made a quick transition to a remote workforce and a more intense focus on serving customers through digital channels. This created a rapid surge in demand for digital capabilities, products, and services. Cybersecurity teams, for their part, were largely successful in taking on a dual mission of supporting business continuity and protecting the enterprise and its customers. The digital response to the COVID-19 crisis has also created new security vulnerabilities. Attackers seek to exploit the gaps opened when telecommuting employees use insecure devices and networks. Threat actors also use known attack techniques to exploit people’s COVID-19-related fears. For example, Google tallied more than 18 million malware and phishing emails related to the novel coronavirus on its service each day in April. It also reported identifying more than a dozen government-backed groups using COVID-19 themes for these attempts. [...] A McKinsey survey of digital sentiment revealed that most employees who are now telecommuting do not expect to return to the workplace soon. Seventy percent of those responding believe that the ability to continue telecommuting will factor into their next job choice.2 Customers express similar sentiments: 75 percent of respondents using digital channels as a result of the COVID-19 crisis say that they will continue to do so.3
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The Trump administration on Friday announced additional duties of 25% on French cosmetics, handbags and other imports valued at $1.3 billion in response to France’s digital services tax, but would hold off on implementing the move for up to 180 days.
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WeWork is on track to have positive cash flow in 2021, a year ahead of schedule, after it cut its workforce by more than 8,000 people, renegotiated leases and sold off assets, its executive chairman said.
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In the first half of 2020, we saw a decade’s worth of employment gains wiped out in two months, and then about a third of the 21 million lost jobs recovered.
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Canadian media company Torstar Corp said on Saturday it reached an amended agreement to be acquired by NordStar Capital at a price of 74 cents per share, a 17.5% increase over NordStar’s previous bid.
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This current bi-lateral crisis between Canada and China has been driven by a massive failure of internal corporate governance by Huawei and an aggressive and unbalanced foreign policy on Huawei’s behalf to mask this failure.
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Canadian employment rose by a record-setting 953,000 people in June as COVID-19 lockdown restrictions eased across the country. Combined with May’s gain of nearly 290,000 workers, the labour market has recovered about 40 per cent of the three million jobs that were lost during the pandemic, Statistics Canada said Friday. The unemployment rate fell to 12.3 per cent from May’s record of 13.7 per cent. June’s employment gains were almost evenly split between full-time and part-time work. The labour participation rate jumped to 63.8 per cent from May’s 61.4 per cent as discouraged workers jumped back into job searches. Moreover, the number of Canadians who worked less than half of their usual hours for reasons related to COVID-19 dropped by 823,000 in June. A blockbuster month was widely expected. Friday’s labour report reflected work conditions between June 14 and 20, making it the first to account for a broad easing of restrictions in Ontario, along with the return of retail businesses in the Montreal region. Other provinces also loosened their COVID-19 rules, allowing more companies to return and rehire. Employment increased in all provinces. Ontario paced them with a gain of 378,000 workers, followed by Quebec with 248,000 and British Columbia with 118,000. “The easing of restrictions, which led to a visible increase in activity, allowed many Canadians to resume jobs that had involved physical interactions,” said Royce Mendes, senior economist at Canadian Imperial Bank of Commerce, in a client note. “However, that was low-hanging fruit in terms of a recovery,” he added, noting the speed of recovery is likely to slow.
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Like everyone else, members of corporate boards have had to innovate quickly due to Covid-19. A once-in-a-generation economic shock has put vital strategic decisions on the table without the luxury of in-person meetings. Boards have had to balance the unfamiliarity of going virtual with the pressures of protecting their organizations from catastrophe. While most boards are still finding that balance, a number of fast-adapting companies have found that virtual board meetings are better than the real thing. Aside from the obvious benefits of reduced travel and increased attendance, shifting to virtual has allowed boards to improve governance and collaboration through shorter agendas, crisper presentations, more inclusive and bolder conversations, and broader exposure to key executives and outside experts. “I’ve had a handful of CEOs and board chairs specifically tell me, ‘We’re not going back to the way it was. [...]
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[...] Key Takeaways and Best Practices
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Autonomy act will target mainland and local officials who implemented security law. US and European banks in Hong Kong are conducting emergency audits of their clients to identify Chinese and Hong Kong officials and corporates that could face US sanctions over a new national security law. Donald Trump, US president, is expected to sign into law as early as next week the Hong Kong autonomy act. The legislation gives the administration the power to impose sweeping sanctions on officials accused of undermining Hong Kong’s semi-autonomous status, as well as banks and state entities that do “significant transactions” with them. At least two large international banks in Hong Kong were studying which of their clients and partners might be exposed to sanctions under the act and with which they might have to terminate their business relationships, people familiar with the matter told the Financial Times. A person at one of the banks said that cutting off the clients could hit revenues from Chinese banks and the country’s state-owned enterprises, but that could not be helped. “If they are sanctioned [we] can’t touch them,” the person said. Foreign banks such as HSBC, Standard Chartered and Citibank have retail outlets in Hong Kong, while global investment banks JPMorgan, Goldman Sachs, Bank of America, UBS and others have offices in the Asian financial hub. Some of them are going through that exercise of looking at their existing client base and seeing where the risks are.
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The coronavirus pandemic has forced companies to adapt, affecting everything from the minutiae of daily tasks to the fundamental way they view their businesses and make money. The pact between the corporation and society has also changed. Lockdowns imposed by governments worldwide have led to near-universal homeworking for office staff. Businesses for which remote working is impracticable have closed, with a devastating effect on employment. The plight of workers is most stark in the US, where joblessness figures have soared: one in five American workers filed for first-time unemployment benefits between mid-March and May. Governments have had to take action on an unprecedented scale, both to extend funding to struggling companies and to underwrite workers’ salaries. [...] Regulations regarding environmental, social and governance (ESG) disclosure added to the pressure. These were already changing corporate practices, although the lack of a global reporting standard was sometimes used as an excuse to treat ESG as “too hard” to address. Regulators also required pension funds to act. Last year the UK directed pension fund trustees to consider ESG factors or give a reason why they had not. Some investors were already on board. Investment in ESG strategies has grown rapidly, with the Global Impact Investing Network estimating the value of dedicated impact funds at more than $500bn in 2019. [...] The “social” component in ESG has been probably the most neglected of the three. The questions of workers’ rights and companies’ broader effect on society had been under-explored. The coronavirus crisis has shifted this balance. Even as the sky has become cleaner as a result of the pause in economic activity, the “S” in ESG has gained visibility. [...] Share incentive schemes also warrant scrutiny. Joel Bakan, professor of law at the University of British Columbia and author of the forthcoming book The New Corporation: How “Good” Corporations are Bad for Democracy, links the inability of companies to “weather the storm” of Covid to the unfettered power of top management to use “debt and record profits to buy back shares and boost their stock option pay”.
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The COVID-19 crisis presents unprecedented challenges for all of us—and everyone has a role to play. Audit committees should consider the following steps to help their companies weather this storm.
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[...] Materiality is the touchstone of our public company disclosure regime. Public companies must disclose material information to their investors, a standard that has been defined by the Supreme Court and followed for decades.[6] I am a proponent of the SEC’s principles-based materiality standard now more than ever. As a result of the Covid-19 pandemic and the shutdown of the economy that followed, America’s public companies faced a crisis that few could have predicted. In SEC filings made before this past March, I am not aware of any company that provided risk factor disclosure regarding the risks associated with the spread of coronavirus. Since March, companies in different industries, and even within the same industry, have faced unique challenges and their disclosure evidences this. Our principles-based framework requires disclosure of all material information (including with respect to environmental factors),[7] but it allows each individual company to tailor that information so that it is useful to their investors. This benefits investors because it highlights for them what they need to know to make informed decisions. In addition, important information is not lost in a sea of inapplicable information. For the avoidance of doubt, ESG issues can be material to companies and necessitate disclosure. In fact, I can think of many scenarios where it would be. For instance, if a company decided to take a public stance on a certain social or political issue, there may be a risk that it could lose a substantial percentage of its customers who disagree with that stance, resulting in a material adverse financial effect. That may be a risk the company is willing to take, but it may also have to disclose that to investors.
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