governance in brief

Governance in Brief – February 2, 2023

Former McDonald’s HR Head faces landmark ruling The Delaware Court of Chancery has ruled that corporate officers have the same oversight obligations as corporate directors under Delaware law. The decision paves the way for a shareholder lawsuit filed against former McDonald’s executive David Fairhurst in 2021. Fairhurst, who served as the firm’s Global Chief People Officer from 2015 until his termination in 2019, is accused both of breaching his fiduciary duties by permitting a corporate culture of sexual misconduct and of engaging in sexual misconduct himself. Fairhurst had argued that he could not be sued, citing purportedly precedential rulings that such oversight rests solely with directors

10 for 2023

10 for 2023: Investing in Emerging Technologies

A fresh approach looking into technological innovation that has the potential to impact global sustainability and the way we live, work, and move.

governance in brief

Governance in Brief – January 26, 2023

Beijing takes golden shares in Alibaba units The Chinese government has acquired golden shares in two Alibaba subsidiaries, allowing it to exert veto power over major decisions while maintaining a relatively modest equity investment. A unit of state-backed Zhejiang Media Group first acquired such a minority stake in one Alibaba subsidiaries in September 2022, and an arm of the Cyberspace Administration of China (“CAC”) acquired a minority stake in another subsidiary in January 2023.

governance in brief

Governance in Brief – January 19, 2023

Beijing takes golden shares in Alibaba units The Chinese government has acquired golden shares in two Alibaba subsidiaries, allowing it to exert veto power over major decisions while maintaining a relatively modest equity investment. A unit of state-backed Zhejiang Media Group first acquired such a minority stake in one Alibaba subsidiaries in September 2022, and an arm of the Cyberspace Administration of China (“CAC”) acquired a minority stake in another subsidiary in January 2023.

governance in brief

Governance in Brief – January 12, 2023

Global investors pressure Glencore over coal production A group of investors with a combined USD 2.2 trillion in assets under management has submitted a shareholder proposal to the AGM of Glencore Plc, calling for improved disclosure on the commodity giant’s thermal coal operations and the alignment of these with the group’s public commitment to support the Paris Agreement’s goal of limiting global warming to 1.5 °C. The resolution constitutes a significant escalation of pressure on the mining company, which had already seen nearly a quarter of shareholders reject its climate progress report in April 2022.

governance in brief

Governance in Brief – January 5, 2023

U.S.-listed Chinese companies drop Hong Kong listing plans Several U.S.-listed Chinese companies, including Pinduoduo and Full Truck Alliance, have reportedly dropped plans to list their shares on the Hong Kong exchange. The decision came after the U.S. Public Company Accounting Oversight Board (“PCAOB”) announced that it had secured full access to investigate China-based audit firms, and that it had already reviewed eight audits conducted by Chinese KPMG and PwC affiliates. Chinese authorities had previously opposed any such disclosure, citing national security concerns.

governance in brief

Governance in Brief – December 15, 2022

Canada to get tougher on foreign investment The Canadian government has proposed changes to the country’s foreign investment legislation aimed at enhancing the government’s ability to scrutinize and block investments that pose national security risks. The planned amendments would require foreign investors to give the government more notice for proposed investments in certain sectors. Additionally, the government will be allowed to impose interim conditions on an investment during the national security review, such as limiting access to transfer of assets, intellectual property or trade secrets.

governance in brief

Governance in Brief – December 8, 2022

EU Parliament approves directive boosting female board representation The European Parliament has approved a directive requiring the “underrepresented sex” to make up 40% of non-executive director roles or 33% of all director roles of publicly listed EU companies, excluding small and medium enterprises, by June 2026. According to the “Women on Boards” Directive, which was passed 10 years after it was first proposed by the European Commission, companies will have to annually report on board gender representation to authorities and, in case targets are not met, explain how they plan to attain them. Additionally, Member States will have to set up a penalty system, including fines or annulment of director selection, for noncompliant companies.

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On the Path to Compliance: An EU Action Plan Timeline

As the EU Action Plan’s legislative framework is being formalized and implemented, many investment firms may still need clarity on its regulations and terminology. In this blog, we demystify 10 key terms to help you better understand the EU Action Plan.

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Cybersecurity Risk and ESG: Systemic Events Analysis

Global events such as the pandemic and the war in Ukraine, heightened focus on cyberthreats. In this blog we look at how these events impacted the performance of a cybersecurity model fund and what that means for companies and investors.

governance in brief

Governance in Brief – December 1, 2022

Intel changes performance metrics for CEO’s new-hire award Intel has amended the new hire agreement for CEO Pat Gelsinger by increasing the share price growth target from 30% to 50%, extending the post-grant vesting period from three to five years, and increasing the number of trading days during which target prices need to be maintained from 30 to 90 days. The decision comes after more than half of votes cast by shareholders at the 2022 AGM opposed the company’s remuneration report.

governance in brief

Governance in Brief – November 24, 2022

Costco to set new emissions targets following activist demands Activist investment firm Green Century Capital Management claims that Costco Wholesale Corp has pledged to set new Scope 3 climate reduction targets in 2023. At Costco’s January 2022 AGM, 70% of votes supported a proposal from Green Century for the company to include emissions from producers and distributors in its net-zero greenhouse gas emissions targets.

Physical Climate Risk: Preparing Your Portfolio for a Changing Climate

The physical climate risks affecting assets are likely to increase in the coming years, as the impacts of climate change are felt more frequently and with more intensity. In this guide, learn how companies and investors can assess their exposure to physical climate risks.

governance in brief

Governance in Brief – November 17, 2022

Renault to potentially spin off EV line and partner with Geely French carmaker Renault Group has announced plans to split its activities into five separate businesses: “Ampere” (electrical vehicles), “Power” (combustion- and hybrid-engine assets), “Alpine” (sports cars), “Mobilize” (financial services), and “The Future is Neutral” (recycling activities). The company is considering listing Ampere on Euronext Paris in 2023 and has said that it will welcome external investors while maintaining a “strong majority.”

On-Demand Webinar: Cyberattacks, Corporate Exposure, and Material ESG Risk

Data privacy and cybersecurity-related issues have become major drivers of business risk in recent years. Cyber risk is “the most immediate and financially material sustainability risk that organizations face today,” according to the World Economic Forum.

Water Risks, the Great Plains, and the Packaged Food Industry: ESG Thematic Spotlight, November 2022

In collaboration with The Water Council, this report explores the notion of contextual water risks impacting agribusiness operations and sourcing in the Great Plains region of the United States.

governance in brief

Governance in Brief – November 10, 2022

Petrobras to pay massive third quarter dividend Petrobras has approved the payment of around BRL 43.68 billion (USD 8.4 billion) in Q3 dividends. Of the total dividend, around BRL 20 billion (USD 3.9 billion) will go to the Brazilian federal government, Petrobras’ controlling shareholder.

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The EU Action Plan on Financing Sustainable Growth: Twelve Essential Questions Answered for Investors

Learn what the EU Action Plan is, its objectives, and the importance of taking immediate action to comply with its various regulations including the EU Taxonomy Regulation, Sustainable Finance Disclosure Regulation, and the EU Benchmarks Regulation.

governance in brief

Governance in Brief – November 3, 2022

SEC adopts new rule on executive compensation clawbacks The U.S. SEC has adopted new rules requiring publicly traded companies to recover incentive-based executive compensation if that pay was awarded based on a misstated financial performance measure. The SEC had originally proposed a clawback rule in 2015, but it remained dormant until 2021.

governance in brief

Governance in Brief – October 27, 2022

U.S. financial regulator launches climate-related advisory group The U.S. Financial Stability Oversight Council has now launched the new dedicated “Climate-related Financial Risk Advisory Committee” (“CFRAC”) that it had previously announced in its 2021 report on climate risks. The CFRAC’s exclusively advisory mandate is to identify information gaps and data inconsistencies, make recommendations on addressing them, gather and analyze information on climate-related risks to the financial system, and provide advice on identifying, assessing, and mitigating climate-related risks to the financial system.