October 14, 2021 | Editor: Martin Wennerstrom
Tesla ordered to pay millions in workplace discrimination lawsuit
A federal jury has ordered Tesla to pay USD 137 million to a contract worker over claims of workplace racism. Plaintiff Owen Diaz accused Tesla of creating a hostile work environment and failing to address racial abuse despite repeated complaints. In a blog post, Tesla’s VP People argued that the firm had followed up on the complaints by firing two contractors and suspending another. The award consisted of USD 6.9 million for emotional distress and USD 130 million in punitive damages. The jury’s decision came amid shareholder pressure regarding Tesla’s use of mandatory arbitration agreements for full-time employees. At the October 7 AGM, an advisory motion filed by investor Nia Impact Capital, owner of 923 Tesla shares, called on Tesla's board to study the impact of mandatory arbitration to resolve workplace complaints of harassment and discrimination. The investor argued that mandatory arbitration limits employees’ remedies and poses “unknown and uncompensated risks” for investors who may be unaware of true workplace conditions. Despite being defeated, the shareholder proposal was backed by 46.37% of votes cast at the AGM.
Reuters | NYT | Tesla (1) | Tesla (2) | SEC (1) | SEC (2) | NPR | CNBC
Investors pressure Australian
banks on climate action
A group of shareholders have filed climate change resolutions with three major Australian banks – Westpac, ANZ and NAB – asking them to stop financing fossil fuel projects. Coordinated by climate activist group Market Forces, these resolutions are part of a campaign which calls on Australia’s big four banks to act on their own commitments of supporting the Paris Agreement and the net zero emissions goal by 2050. A similar resolution filed by Market Forces with Commonwealth Bank of Australia was not put to vote, as it was preconditioned on an article amendment that failed to achieve its requisite majority.
Reuters | MF | The Star | SMH |CBA
Clayton, Dubilier & Rice wins
auction for Morrisons
US private equity firm Clayton, Dubilier & Rice (“CD&R”) has won a months-long battle for Wm Morrison Supermarkets, outbidding rival Fortress Investment Group with a GBP 7.1 billion offer. The takeover saga culminated in the UK Takeover Panel stepping in to organize an auction, after neither party had declared their offers to be final. Notably, in August, Morrison’s board unanimously accepted a GBP 7 billion offer from CD&R, having previously backed a GBP 6.3 billion deal from a consortium led by Fortress Investment Group. Shareholders will vote on the deal at the upcoming EGM on October 19. If approved, Morrison will be the second UK grocer to be taken private this year after Asda.
Daimler AG spins off truck
At its October 1 EGM, Daimler AG shareholders voted overwhelmingly in favour of a board proposal to spin off the truck and bus business and subsequently list Daimler Truck Holding AG on the Frankfurt Stock Exchange in December 2021. Shareholders also supported the renaming of the remaining car business as Mercedes-Benz Group AG, effective as of 1 February 2022. According to the demerger plan, Daimler shareholders will hold 65% of the new company, while Daimler AG will retain a 35% stake. The new company will have a 20-member Supervisory Board with equal representation as per the German Co-determination Act.
Governance in Brief – March 23, 2023
SVB Financial Group sued after the collapse of Silicon Valley bank unit SVB Financial Group, the parent company of Silicon Valley Bank, and two of its top executives, CEO Greg Becker and CFO Daniel Beck, are being sued by shareholders following the bank’s collapse. The lawsuit, filed by retail shareholder Chandra Vanipenta on behalf of a group of shareholders, accuses the bank and its two top executives of filing false and misleading financial reports.
Governance in Brief – March 16, 2023
Canada introduces climate reporting framework Canadian regulators have issued new guidance for the country's banks and insurance companies to better manage climate-related risks. The framework, which requires disclosure on governance, strategy, risk management, and metrics related to financial institutions’ greenhouse-gas emissions, was first drafted in 2022.
Governance in Brief – March 9, 2023
The U.S. Congress has passed a resolution repealing a Department of Labor (“DOL”) rule empowering retirement plan managers to consider climate change and ESG factors in their investment decisions. The rule, introduced by the Biden administration, falls under the Employee Retirement Income Security Act (“ERISA”), a federal law which sets protection standards for participants in private pension plans. Biden’s ruling entered into force in January this year, overturning prior Trump-era DOL rules that limited pension fund managers to restrict their investment strategies to “pecuniary factors.”
Governance in Brief – March 2, 2023
Indian regulator proposes enhancement to ESG disclosure rules India’s securities and market regulator SEBI has released a new ESG disclosure framework for public consultation. The proposed regulations impact India’s 1,000 largest companies by market capitalization, ESG funds and ESG ratings providers. For the largest companies, the regulator proposes areas of assurance of ESG disclosures and reporting and assurance of ESG footprint of the supply chain. The proposals expand on the 2021 Business Responsibility and Sustainability Report (“BRSR”) guidelines and propose mandatory assurance of certain KPIs under ESG disclosure. The KPIs contain intensity ratios such as GHG emissions, water consumption, and waste generation. For supply chain, SEBI will introduce a comply-or-explain approach for the top 250 companies starting in 2024, and assurance beginning in 2025. For ESG funds, SEBI proposes that at least 65% of AUM be invested in companies reporting on comprehensive BRSR and provide assurance on BRSR core disclosures. Under the proposed rules, ESG rating providers should also provide a “core ESG rating” based on assured information in addition to their own products.