Corporate governance - Vigil

« On ne peut même pas savoir si BRP a en stock des pièces que l’on souhaite commander pour un client », relate Virgine Jolicœur, directrice des communications de Groupe Contant, qui exploite cinq concessionnaires (Laval, Mirabel, Sainte-Agathe, Belœil et Vaudreuil). « Nous sommes bloqués. J’ai même vu des concessionnaires en contacter d’autres pour avoir de l’aide. »

Selon le Financial Times de Londres, les prix élevés de l’énergie ont déjà forcé les entreprises européennes à réduire de 50 % leur production d’aluminium et de zinc. Les industries grandes consommatrices d’aluminium, comme l’aérospatiale et l’automobile, devront donc se tourner vers les importations.

It’s now more important than ever before that your board of directors is highly engaged in the mission and business of your organization. Since Covid, the bar has been raised on board performance – it’s no longer sufficient (if it ever was) for board members to simply show up to meetings, nod their heads in agreement, and go home. Your stakeholders want tangible evidence that your organization is fulfilling its mission. Your board members – as the owners of your organization’s mission – are in the crosshairs of this scrutiny. Board engagement is critical. While much has been written on the topic of board engagement, most of the literature provides only proscriptive lists of “to do’s,” many of which are aspirational and difficult to implement. We thought we’d take a stab at a different approach by identifying what NOT to do. While not comprehensive, this list represents seven activities that can derail board member engagement, produce feelings of frustration (and inadequacy), and foster an environment where both staff and board members lament that the board is disengaged.

Few hedge funds are more identified with their founder than Bill Ackman’s Pershing Square Capital. But for the first time ever, the 56-year-old has turned over the role of chief investment officer to one of his partners: Ryan Israel. “I periodically get asked about succession planning at Pershing Square,” Ackman wrote investors in his publicly traded Pershing Square Holdings hedge fund. “At age 56, loving what I do and in excellent health, my principal risk is what can be deemed ‘pie truck risk,’ that is, the risk I look the wrong way crossing the street and get smooshed by a pie truck.” Ackman said he chose Israel as CIO because he is a “once-in-a-generation talent as an investor, not just in equities, but also in macro instruments. He is an excellent leader, teacher, communicator, and partner, and has the respect of each member of the investment team.”

Adam Neumann presided over one of the most spectacular business collapses in recent history. A New Age-spouting, barefoot business messiah, he managed to build and burn his last startup, the office-sharing company WeWork, in such spectacular fashion that even Hollywood paid attention. And now he is back – on a quest to become America’s biggest landlord. Neumann, it was reported this week, is at the helm of a new company looking to reinvent apartment living. Details are sketchy but the company, called Flow, aims to address the world’s housing crisis with “community-driven” rentals – so basically WeWork for renters. Flow is off to a flying start after receiving one of the most sought-after blessings a new venture could get from Silicon Valley: an $350m investment from venture capital giant Andreessen Horowitz, known as A16Z. The announcement of the firm’s investment in Flow, which values the “pre-seed” company – meaning it has not yet launched – at $1bn rocked the startup world.

Toward the end of each year, Institutional Shareholder Services updates its proxy vote recommendation policies for meetings held on or after February 1 of the following year. As part of that process, ISS collects information from institutional shareholders, corporate issuers, corporate directors and other market constituents in the form of an annual survey. [...] Sunset for governance structures ISS finds “problematic”
In 2020, ISS updated its voting policy regarding newly public companies with “problematic” capital structures to indicate that no sunset of greater than seven years from the date of the IPO would be considered reasonable. ISS is now seeking input on what the appropriate sunset period is for the other governance structures it finds problematic (i.e., classified board and/or supermajority voting requirements).

Apple employees have hit back at the tech company’s return-to-office orders, and launched a petition saying the firm risked stifling diversity and staff wellbeing by restricting their ability to work remotely. The petition is in response to an all-employee memo from the Apple chief executive, Tim Cook, who last week said workers would have to come into the office for at least three days a week from September, including Tuesdays, Thursdays and a third day to be determined by individual teams. The plan is looser than previous proposals that would have forced staff to return every Monday, Tuesday and Thursday, with Cook saying it would “enhance” the company’s ability to work flexibly, “while preserving the in-person collaboration that is so essential to our culture”. [...] While other tech companies such as Twitter and Facebook introduced policies at the start of the pandemic that allowed staff to permanently work from home, Apple has maintained its stance that it expected employees to return to in-person work long term.

Independent work is booming, the American Opportunity Survey shows. For these workers and society, the upsides and drawbacks are all part of the gig. In the working world, a full-time job with one employer has been considered the norm for decades, but this model fails to describe how a significant share of the US workforce makes a living. In the latest iteration of McKinsey’s American Opportunity Survey (AOS), a remarkable 36 percent of employed respondents—equivalent to 58 million Americans when extrapolated from the representative sample—identify as independent workers. This figure represents a notable increase since we estimated the US independent workforce in 2016 at 27 percent of the employed population.

The new 1% excise tax on corporate stock buybacks — a late addition to President Joe Biden’s sweeping tax, health and climate package — adds a new levy to the controversial practice. But there are mixed views on how it may affect investors. The Inflation Reduction Act provision levies a 1% excise tax on the market value of net corporate shares repurchased starting in 2023. [...] With low interest rates boosting profits and values, S&P 500 companies bought back a record $881.7 billion of their own stock in 2021, up from $519.8 billion in 2020, according to S&P Global data. A significant percentage comes from a handful of so-called “buyback monsters,” with five companies — Apple, Google parent Alphabet, Facebook parent Meta, Microsoft and Bank of America — making up one-quarter of the dollar value of stock buybacks over the past year.  [...] “I don’t think it should have a major impact on investors,” Arnott said. But at the margins, companies with excess cash may be “slightly more likely” to pay dividends than buy back shares, she said. It’s estimated that a 1% tax on share repurchases may trigger a 1.5% increase in corporate dividend payouts, according to the Tax Policy Center.   

Portfolios tilted toward companies with strong corporate governance metrics, for example, beat their benchmarks across the four regions ESG Book analyzed, with average annual outperformance as high as 2.17% in Europe.

Dans un communiqué, le ministre de l’Économie et de l’Innovation et ministre responsable du Développement économique régional, Pierre Fitzgibbon, écrit que l’installation de cet équipement de pointe permettra au Québec de développer une expertise dans des domaines d’avenir comme la production d’hydrogène vert. Il maximisera les rendements de production de la nouvelle bioraffinerie et réduira son empreinte carbone.

Building your board forward from product-market fit—instead of backward from an IPO date—helps you clarify the most critical challenges facing your company and find the right people to advise you. A good board of directors can be one of the most strategic—and most undervalued—levers a CEO has to address the challenges of operating at scale. Conventional wisdom advises CEOs to start building out their board 6–12 months in advance of an IPO, but if you work backwards from a transactional moment and a list of regulatory requirements, you’ll miss out on a wealth of business value for your company. [...] Identifying the critical challenges facing your company will help you prioritize hiring independent board members who have the experience and expertise to tackle those issues. Though many executives will have skill sets that cut across different areas, we’ve found that grouping independents into one of five personas can help you clarify their value-adds to your board: the CEO whisperer, the voice of the customer, the industry expert, the functional expert, and the public readiness expert. 

McDonald’s board is gaining three new members and losing one longtime director. Sheila Penrose, who leads the board’s sustainability and corporate responsibility committee, will retire on Sept. 30 after 16 years on the fast-food giant’s board. Earlier this year, billionaire Carl Icahn targeted her seat in his unsuccessful proxy fight with McDonald’s over animal welfare, but she handily survived the challenge. In a statement Monday, Enrique Hernandez Jr., chairman of McDonald’s board, praised Penrose for overseeing the company’s progress on its climate, responsible sourcing, and diversity, equity and inclusion targets. The board elected three new members: Tony Capuano, Jennifer Taubert and Amy Weaver, who will take their seats on Oct. 1. The shake-up brings the total number of directors to 14 and doubles the number of female members.

Cyber security has eclipsed tumultuous financial markets as the biggest concern for the world’s largest sovereign wealth fund, as it faces an average of three “serious” cyber attacks each day. The number of significant hacking attempts against Norway’s $1.2tn oil fund, Norges Bank Investment Management, has doubled in the past two to three years, according to its chief executive Nicolai Tangen. The fund, which reported its biggest half-year dollar loss last week after inflation and recession fears shook markets, suffers about 100,000 cyber attacks a year, of which it classifies more than 1,000 as serious, according to its top executives. “I’m worried about cyber more than I am about markets,” Tangen told the Financial Times. “We’re seeing many more attempts, more attacks [that are] increasingly sophisticated.” The fund’s top executives are even concerned that concerted cyber attacks are becoming a systemic financial risk as markets become increasingly digitised. [...] NBIM was set up in the mid-1990s to invest the revenues from Norway’s oil and gas industries. It has grown to hold the equivalent of about 1.5 per cent of every listed company worldwide. The quasi-index fund is housed within Norway’s central bank and has its overarching investment mandate set by the Ministry of Finance.

There has been a rapid increase in the adoption of ESG metrics for executive incentive plans across the S&P 500 over the past several years. This has largely been driven by continued shareholder focus on human capital management (HCM) and environmental issues. By adding these ESG metrics to incentive plans, Companies are signaling a heightened sense of commitment to their stated ESG goals. Key Takeaways: 

• Investors are strongly focused on HCM and environmental topics as the most important ESG issues. In this year’s data, we have specifically analyzed the prevalence of metrics within these two categories
• Although D&I continues to lead as the most prevalent metric (46%), companies appear to be taking a holistic approach to HCM in incentives by using other HCM metrics along with D&I
• Environmental metrics remain uncommon in incentive plans. However, prevalence is increasing, with Carbon Footprint emerging as the environmental measure of choice

(Bloomberg) -- Adidas AG announced the surprise departure of Chief Executive Officer Kasper Rorsted next year, forcing the search for a new leader as the German sporting goods company reels from years of lockdowns and consumer boycotts in China.  The Adidas board and Rorsted have “mutually agreed” that he would hand over the top job in the course of next year, according to a statement Monday. Rorsted, whose contract was renewed in 2020 for five years, will remain CEO until a successor has been appointed to ensure a smooth transition. [...] Rorsted’s departure was a mutual decision of the supervisory board and the CEO following confidential discussions, people close to the matter said. Rorsted felt worn out after steering Adidas through the pandemic, when he drew public criticism for skipping rent payments for Adidas stores, said the people, who asked not to be identified discussing private deliberations. 

Activist investor Ryan Cohen has exited his position in retailer Bed Bath & Beyond, according to a securities filing released Thursday afternoon. The filing shows that Cohen’s RC Ventures dumped its stock on Tuesday and Wednesday at a range of prices between $18.68 per share and $29.22 per share. The firm also sold its call options. Cohen said in a filing earlier this week that he intended to sell his holdings of the meme stock. Cohen, who co-founded Chewy and is the chairman of GameStop, purchased more than 7 million shares and call options of Bed Bath & Beyond earlier this year. The company added board members of Cohen’s choosing and pushed out its CEO after RC Ventures revealed its stake.

Chief executives of the UK’s 100 biggest companies have seen their pay jump by 39% to an average of £3.4m, according to research by the High Pay Centre thinktank and the Trades Union Congress (TUC). The median average pay of CEOs of companies in the FTSE 100 index rose to £3.4m in 2021, compared with £2.5m in 2020 during the height of the coronavirus pandemic when many bosses took a voluntary pay cut as they placed millions of employees on furlough. CEO pay has also surpassed the £3.25m median recorded in 2019, before the pandemic. The jump in executive pay means that the average UK CEO now collects 109 times that paid to the average British worker, up from 79 times in 2020. [...] The TUC and the High Pay Centre are calling for reforms to regulations affecting corporate pay-setting processes, including:

• Requirements for companies to include a minimum of two elected workforce representatives on the remuneration committees that set pay
• Guaranteed trade union access to workplaces to tell workers about the benefits of union membership and collective bargaining.
• Requirements for companies to provide more detailed disclosure of pay for top earners beyond the executives, and low earners including indirectly employed workers, enabling more informed pay negotiations at individual companies and a clearer debate about pay inequality more generally.

Norway’s sovereign wealth fund, the largest in the world, had a loss of 1.68 trillion Norwegian kroner ($174 billion) in the first half of 2022, as stock markets more broadly saw a tumultuous six months. The $1.3 trillion fund returned a negative 14.4% during the period, as stocks and bonds reacted violently to global recession fears and skyrocketing inflation. But the fund’s return was 1.14 percentage points better than the return of the benchmark index, Norges Bank, the country’s central bank, said Wednesday, equivalent to 156 billion kroner. “The market has been characterised by rising interest rates, high inflation, and war in Europe. Equity investments are down with as much as 17 percent. Technology stocks have done particularly poorly with a return of -28 percent,” the CEO of Norges Bank Investment Management, Nicolai Tangen, said in a release. [...] NBIM’s (Norges Bank Investment Management) performance is “symptomatic” of a larger trend across most major investment funds, Economist Intelligence Unit analyst Matthew Oxenford told CNBC.