Governance in Brief – March 17, 2022

Posted on March 17, 2022

 

March 17, 2022 | Editor: Martin Wennerström

 

 

SEC proposes heightened cybersecurity risk disclosure 

The U.S. SEC has proposed amendments to existing rules on public companies’ disclosure of cybersecurity, risk management, strategy, governance, and incident reporting. The amendments would, inter alia, require public companies to report on material cybersecurity incidents and periodic updates on past incidents, as well as the companies’ policies and procedures on cybersecurity risk management, board oversight of cybersecurity risks and directors’ cybersecurity expertise. SEC Chair Gary Gensler issued a statement in support of the amendments, considering cybersecurity an emerging risk that must be addressed by public companies. Gensler stated that standardized and periodic cybersecurity risk disclosure would enable investors to assess cybersecurity risks more effectively. SEC Commissioner Hester Price released a dissenting statement arguing the proposed rules would pressure companies to “adapt[] their existing policies and procedures to the Commission’s preferred approach”, while noting that securities regulators are not “best suited to design cybersecurity programs.”

SEC (1)| SEC (2)| SEC (3)| Investopedia|

 

Former Petrobras executive nominated as chairman 

The Brazilian government has nominated former Petrobras executive Rodolfo Landim as the company’s board chairman, replacing Eduardo Ferreira. Landim’s election is a foregone conclusion, given the Brazilian government’s control of more than 50% of voting rights. Landim will need to balance, on the one hand, minority shareholders’ demands to raise gas prices in line with surging crude oil prices, and on the other, the government’s interest in suppressing gas prices ahead of the upcoming October elections.


Reuters | Bloomberg|


Investors pressure Amazon for enhanced tax transparency

A coalition of institutional investors has petitioned the U.S. SEC to allow a tax-related shareholder proposal to appear on Amazon’s 2022 AGM ballot. The proposal requests that Amazon issue a GRI-aligned tax transparency report. Amazon had requested the SEC’s permission to exclude the proposal from the ballot on account of it being “ordinary business.” The petitioners argue that the SEC should allow the proposal, citing increasing country-by-country reporting by large global companies and the fact that such granularity is already required in U.S. tax filings.


Reuters
| BMM| PIRC|

 

Ericsson and top executive named in U.S. class action suit

The Sweden-based telecom company Ericsson, along with its CEO Börje Ekholm and CFO Carl Mellander, have been named in a U.S. lawsuit accusing the company of misleading investors. In February it was revealed that a 2019 company investigation found payments made to avoid Iraqi customs, including in areas controlled by ISIS. The U.S. DOJ has accused Ericsson of breaching a 2019 deferred prosecution agreement by failing to disclose details of its operations. Following the agreement, Ericsson paid USD 1 billion to settle corruption probes regarding bribery claims. 

Reuters| Bloomberg|

 

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