Corporate governance - Vigil

As part of our quarterly Director Confidence Index conducted in partnership with Corporate Board Member, we ask directors of U.S. public companies to rate the current business environment on a scale from 1 to 10, with 10 representing the sunniest outlook possible. How did directors rate business conditions this month? Only 4.4 out of 10. This tepid response raised no eyebrows on our end, especially given that the top three issues on directors’ minds — tariffs, inflation and supply chain disruptions — have been defined by seemingly constant volatility. Meanwhile, 57% of directors still predict a recession in the next six months. As Joseph R. Bronson, a director on the board of PDF Solutions put it, “You can't forecast anything in this uncertain environment.”

Nissan Motor shareholders vented their frustrations over the automaker's poor performance at its annual general meeting on Tuesday, with some demanding greater management accountability for the deepening crisis at Japan's third-largest car company. The meeting was the first for new boss Ivan Espinosa since he replaced Makoto Uchida as CEO in April. It remains to be seen whether Espinosa, a company veteran, will be able to halt the sharp decline at Nissan. Shares have fallen some 36% over the last year and dividend payments have been suspended. Nissan reported a $4.5 billion net loss in the last financial year and there is no guarantee it will return to profit this year - so far, it has declined to give a full-year earnings forecast, and has estimated a first-quarter loss of 200 billion yen ($1.38 billion).

Monte dei Paschi di Siena said on Wednesday the European Central Bank had approved its proposed acquisition of rival Mediobanca including under a scenario in which it gains a stake of less than 50% in the rival. The ECB approval, which Reuters first reported on Monday, paves the way for Monte dei Paschi (MPS) to formally launch the offer next month, inviting Mediobanca shareholders to tender their shares. MPS can count on the support of a group of significant Mediobanca shareholders - the billionaire Del Vecchio and Caltagirone families, who became investors in MPS last November when the Treasury last sold a chunk of the bailed-out bank. The November placement is now being investigated by Milan prosecutors, and details of the probe are not known.

Rules intended to restrict foreign takeovers of security-sensitive British companies are to be rewritten as part of a wider attempt to boost conditions for businesses. Under the industrial strategy announced on Monday, ministers announced a review to make the UK’s investment scrutiny rules more “predictable and proportionate” for companies. The National Security and Investment Act, or NSIA, was drawn up to provide a mechanism for officials to scrutinise — and ultimately block — takeovers of British companies and assets from foreign states such as China.  The government on Monday promised a “predictable, proportionate, and transparent investment screening framework”. It said that there would be a 12-week review of the Act to ensure that regulatory requirements remained “targeted and proportionate, protecting national security and giving certainty to investors.”

U.S. exchange operators are in talks with the Securities and Exchanges Commission on easing regulatory burdens for public companies, as they seek to encourage more richly valued startups to list, according to four people familiar with the matter. These deliberations, the details of which are reported here for the first time, involve the SEC, Nasdaq and the New York Stock Exchange. The reforms under discussion range from reducing the quantum of disclosures and the costs of going public to making it harder for minority investors to agitate, the sources said, requesting anonymity as they were not authorized to speak publicly. The talks, which the sources said have been ongoing for several months, come amid a renewed push to ease regulations under President Donald Trump, whose administration has said, opens new tab it wants to do so to spur economic growth.

As countries around the world race to leverage artificial intelligence (AI), a recent study found that Canada is falling behind. One expert says the decline is not due to a lack of innovation, but growing uncertainty and a gap in public understanding. Stephanie Terrill, managing partner of digital at KPMG Canada, said many Canadians are not embracing the use of AI in their daily working lives. “Similar to reading, our literacy isn’t where it needs to be when you compare us on the global stage,” Terrill told BNN Bloomberg in a Monday interview. In a recent study from KPMG, Canada ranked 44th in AI training and literacy out of 47 countries, and 28th among 30 advanced economies. The study surveyed over 48,000 people in 30 advanced economies and 17 emerging economies, including 1,025 people in Canada.

The war between Israel and Iran has revived Chinese leaders’ interest in a pipeline that would carry Russian natural gas to China, according to people close to Beijing’s decision-making, potentially jump-starting a project that has been stalled for years. The Power of Siberia 2 pipeline project has been mired in disagreements over pricing and ownership terms, as well as Chinese concerns about relying too heavily on Russia for its energy supplies. But the recent war in the Middle East has given Beijing reason to reconsider the reliability of the oil and natural gas it gets from the region, the people said, even as a fragile cease-fire between Israel and Iran takes hold. China imports around 30% of its gas in the form of liquefied natural gas from Qatar and the United Arab Emirates via the Strait of Hormuz, a maritime chokepoint that Iran threatened to close, according to consulting firm Rystad Energy. Meanwhile, China’s independent refineries, known as teapots, have in recent years become hooked on cheap Iranian crude.

Advertising holding company Omnicom Group can proceed with its proposed acquisition of rival Interpublic Group after the companies promised not to collude on politically motivated ad boycotts, the Federal Trade Commission said. Omnicom, which owns agencies including BBDO and TBWA, in December agreed to buy IPG, whose portfolio includes McCann Worldgroup, in a transaction that would create the world’s largest advertising company. The all-stock deal values IPG at around $13 billion and will create a conglomerate with approximately $25 billion in net revenue, based on 2024 figures for each company. Executives at Omnicom and IPG had expressed confidence that the government would approve their plan, calling the incoming Trump administration more business-friendly. However, the FTC in March requested additional information from Omnicom and IPG, signaling a review of the deal. 

Le président de la banque centrale des États-Unis (Fed) Jerome Powell a répété mardi qu’il ne voyait « pas d’urgence » à baisser les taux d’intérêt, à contre-courant d’autres membres de l’institution et surtout de Donald Trump. « Pour l’instant, nous sommes bien placés pour attendre d’en savoir plus sur l’évolution probable de l’économie avant d’envisager tout ajustement de notre politique », a déclaré M. Powell au début d’une audition devant la Commission financière de la Chambre des représentants à Washington. « Je ne pense pas que nous avons besoin de nous presser [de bouger les taux] parce que l’économie est toujours solide », a-t-il dit un peu plus tard.  

La présidente du Conseil national de la sécurité des transports des États-Unis (NTSB) a souligné mardi que l’héroïsme de l’équipage du vol 1282 d’Alaska Airlines avait permis à tous de survivre au terrible incident survenu l’année dernière, lorsque le panneau de protection de la porte s’était détaché de l’avion peu après le décollage, en janvier 2024. Jennifer Homendy a toutefois ajouté que « les membres de l’équipage n’auraient pas dû être des héros, car cet accident n’aurait jamais dû se produire » si Boeing et la Federal Aviation Administration (FAA) avaient pris les mesures nécessaires pour garantir la sécurité du Boeing 737 MAX. Elle a précisé que l’enquête menée au cours des 17 derniers mois avait révélé des problèmes plus graves que la simple révélation du retrait des boulons fixant le panneau de protection de la porte, jamais remplacés lors d’une réparation, car « un tel accident ne se produit qu’en cas de défaillances multiples du système ».

Certains économistes se montrent de plus en plus optimistes quant au conflit tarifaire entre le Canada et les États-Unis, estimant que l’économie devrait pouvoir éviter les pires scénarios liés à cette guerre commerciale. Cela ne signifie pas pour autant que l’économie canadienne s’en tire à bon compte. Selon de nouvelles prévisions publiées mercredi par Deloitte Canada, une légère récession frappera les deuxième et troisième trimestres de l’année, alors que l’incertitude et la faiblesse causées par les droits de douane commencent à se faire sentir. « Nous pensons que l’économie va vraiment ralentir considérablement », a indiqué Dawn Desjardins, économiste en chef chez Deloitte Canada.

At least two supertankers made U-turns at the Strait of Hormuz following U.S. military strikes on Iran, shiptracking data shows, as more than a week of violence in the region prompts vessels to speed, pause, or alter their journeys. Washington’s decision to join Israel’s attacks on Iran has stoked fears that Iran could retaliate by closing the strait between Iran and Oman through which around 20 per cent of global oil and gas demand flows. That has spurred forecasts of oil surging to $100 a barrel. Both Brent and West Texas Intermediate crude hit fresh five-month highs on Monday in choppy trade as investors weighed the potential risks to supply.

The firms that advise big shareholders on corporate governance matters and help them vote are under siege. A simmering backlash over the activities of proxy advisory firms has mutated into an all-out assault in the US from multiple directions. The attacks have included congressional hearings, legal actions, regulatory pressure and recent comments by JPMorgan chief executive Jamie Dimon who reportedly called them a “cancer”. The proxy advisory firms are accused of cartel-like behaviour and ideological over-reach in their corporate governance advice with critics treating the fiduciaries who manage money with disdain, painting them as manipulated victims.

Proxy adviser Institutional Shareholder Services said on Tuesday Paramount Global shareholders should vote against the re-election of four directors to the board, including the media company's chair Shari Redstone. A vote against their re-election is warranted as the directors maintained a "problematic capital structure", ISS said in a report dated June 23, recommending votes against Redstone and governance committee members Barbara Byrne, Linda Griego and Susan Schuman. ISS also cited concerns with Paramount's executive pay plans including what it called a "relatively large influence" of individual performance on annual bonus payouts for recommending votes against three of the directors, who serve on the company's compensation committee.

Parkland Corp shareholders on Tuesday voted in favor of a $9.1 billion deal to be acquired by U.S.-based Sunoco. The company said 93.46% votes were for the deal, which will create America's largest independent fuel distributor. Sunoco in May agreed to buy Parkland in a cash and stock deal, which included debt. Sunoco had said each Parkland share will be exchanged for C$19.80 in cash and 0.295 Sunoco unit. The Canadian firm had undertaken a strategic review in March following persistent pressure from two of its largest shareholders Simpson Oil, which holds a nearly 20% stake, and activist investor Engine Capital.

The European Commission is examining the Italian government's sale of a 15% stake in Monte dei Paschi di Siena (BMPS.MI), opens new tab last year, following claims that large investors were shut out of the bidding process, the Financial Times reported on Tuesday. Reuters reported last week that prosecutors in Milan were also looking into the sale of a stake in the bank to a small group of investors, without providing details on what part of the process was being probed. Italy's economy ministry sold the stake via an accelerated bookbuilding (ABB) procedure to Banco BPM fund manager Anima Holding construction tycoon Francesco Gaetano Caltagirone and the holding company of late Ray-Ban owner Leonardo Del Vecchio. Banca Akros was the broker that handled the sale process.

Spain's BBVA  will not be allowed to integrate its operations with Sabadell, for at least three years as one of the conditions imposed by the Spanish government on its hostile bid for its smaller rival in a potential blow to the suitor's expansion plans. BBVA, whose CEO said on Monday it could drop its offer if Madrid's terms proved too harsh, said in a statement it would evaluate the conditions set by the government. Euro zone banking supervisors have called for banking consolidation to strengthen the sector, but deals have been scarce as politicians have sought to preserve jobs, and in the case of cross-border takeover attempts, protect home-grown champions.

Les chiffres de l’inflation de mai ont montré des améliorations marginales dans certains indicateurs de prix surveillés de près par la Banque du Canada, ce qui représente un pas dans la bonne direction, selon certains économistes, mais reste probablement insuffisant pour convaincre la banque centrale de réduire son taux directeur. Le rythme annuel de l’inflation s’est maintenu à 1,7 % en mai au pays, le ralentissement de la hausse des coûts du logement ayant contribué à atténuer la pression sur les prix, a annoncé mardi Statistique Canada. L’inflation annuelle s’est aussi établie à 1,7 % en mai au Québec, après avoir été de 2,2 % en avril.

BlackRock on Tuesday launched a Texas-focused exchange-traded fund, as the asset manager aims to tap into the state’s growing reputation as a magnet for companies, capital and jobs in the United States. The Lone Star State’s low taxes, business-friendly policies as well as growing tech and energy sectors have attracted investors and asset managers looking to tap into its long-term growth potential. BlackRock said the iShares Texas Equity ETF will invest in companies headquartered in the state. Such funds are popular for offering low-cost, tax-efficient access to regional or sector-specific growth in a single trade. The world’s largest asset manager said Texas is home to one in ten publicly traded U.S. companies, and that more than 300 firms have relocated their headquarters to the state since 2015.

Sustainability efforts have been under attack recently, but many companies insist that the business case for pursuing net-zero emissions remains strong, the new leader of the nonprofit that sets climate action standards said. The flow of companies signing up to have their transition targets validated by the Science Based Targets initiative shows many firms aren’t backing away from sustainability goals despite the political and investor backlash. Submissions to the SBTi are up 30% year to date, said David Kennedy, the nonprofit’s chief executive, and that comes after a record number last year. “This is not about business doing the right thing,” said Kennedy, who took the top job at SBTi in March.

China has told companies in its rare-earth industry to give the government lists of employees with technical expertise, aiming to ensure they don’t divulge trade secrets to foreigners. The queries point to the growing geopolitical significance of China’s control over the materials, which are widely used in cars, electronics and weapons and stand at the center of the U.S.-China trade war. According to people familiar with the queries, China’s Ministry of Commerce in recent weeks asked rare-earth companies based in China for personnel lists that include specialist employees’ specific expertise, education, research background and personal information.  The goal, the people said, is to develop a formal catalog of Chinese nationals with rare earth expertise and keep tabs on these employees to make sure they don’t travel abroad and reveal secrets.

The federal minister of artificial intelligence said building large AI companies is an “urgent issue” for Canada, but added that the country has to work with foreign companies and partner with other nations to secure the necessary capital to build out its AI sector. "We need to really pick the companies that have the potential to scale,” Evan Solomon told The Globe and Mail in an interview Tuesday. One way the government can do that is through its procurement policies, buying products and services from Canadian companies to help them grow. Canada has also committed to meeting NATO’s 2-per-cent military spending target this fiscal year, and Mr. Solomon said part of that spending will go toward supporting Canadian AI and quantum computing companies developing technology that has both commercial and defence applications.

Le président et chef de la direction de la septième plus grande banque du Canada, Andrew Moor, est décédé subitement au cours de la fin de semaine, a annoncé mardi la Banque EQ, qui a nommé une dirigeante par intérim. « Le décès d’Andrew est une perte tragique pour nous tous à la Banque EQ et pour tous ceux qui ont eu le plaisir de le connaître », a indiqué par communiqué Vincenza Sera, présidente du conseil d’administration. « Andrew était un leader visionnaire et un ardent défenseur du changement et de l’innovation dans le secteur bancaire, au bénéfice de tous les Canadiens », a-t-elle ajouté. Au moment de son décès à l’âge de 65 ans, M. Moor était le président et chef de la direction de banque ayant occupé ce poste le plus longtemps au Canada, ayant pris ses fonctions en 2007.

Alors que Washington et Pékin préparent leur retour à la table des négociations en juillet, la Chine s’estime en bonne position : son économie fait mieux que ne le prévoyait Donald Trump. Certaines politiques commerciales du président américain ont été rejetées en cour et c’est sans compter le quasi-monopole chinois sur les terres rares, un as géopolitique dans sa manche. Selon des analystes chinois et internationaux, l’administration Trump semble avoir grandement sous-estimé la résilience de Pékin face aux droits de douane, dont certains ont dépassé 145 % avant la trêve déclarée à Genève le 10 juin. « En février, le discours dominant à Washington était que l’économie chinoise allait mal et que devant des droits de douane américains, la Chine serait obligée de capituler », a déclaré Wu Xinbo, doyen de l’Institut d’études internationales de l’Université Fudan à Shanghai.

Precision instruments maker Spectris agreed on Monday to a 4.4 billion pound ($5.9 billion) debt-inclusive takeover deal by private equity firm Advent over a rival proposal from KKR marking the biggest acquisition in Britain this year. Britain has in recent years drawn overseas buyers due to its relatively cheap valuations, and this latest deal could be another blow to a London stock market which has been weakened by takeovers, shifts in listing venues and sluggish IPO activity. Spectris shares jumped almost 15% to 37.68 pounds in early trade to their highest in over a year, and were the biggest percentage gainer on London's mid-cap FTSE-250 index.