The week in GRC: Uber names board chair, and US Treasury proposes corporate income repatriation rules

Aug 03, 2018
This week’s governance, compliance and risk-management stories from around the web

– CBS on Monday said its board of directors was selecting an outside law firm to handle an independent investigation into allegations that CEO Leslie Moonves sexually harassed women, The Wall Street Journal reported. No other actions were taken on the matter at the board meeting.

The investigation is in response to a New Yorker article, in which six women who had professional dealings with Moonves between the 1980s and late 2000s claimed he sexually harassed them. Moonves expressed regret in the New Yorker article for any behavior that made women uncomfortable but denied that he retaliated by harming anyone’s career after being rebuffed.

CBS on Monday also said its board had again postponed its annual meeting, which was scheduled for August 10.

– The Financial Times reported that South Korea’s state-run National Pension Service (NPS), the world’s third-largest pension fund, has adopted a stewardship code intended to encourage governance reforms at the country’s family-run conglomerates via closer engagement in corporate affairs.

The principles are designed to boost transparency and accountability at the country’s largest stock investor, and come as President Moon Jae-in’s administration faces criticism over a lack of progress made on chaebol reform election pledges. Investors have said NPS adopting a stewardship code would probably improve the country’s investment climate by enhancing corporate governance.

Reuters reported that the US Department of the Treasury proposed regulations governing the repatriation of more than $2.6 trillion in US corporate foreign income, in an effort to return the money to the country. The 2017 tax law allows major corporations to repatriate the money at special low-interest rates of 15.5 percent on cash and cash equivalents and 8 percent on illiquid assets. Now regulators at Treasury and the Internal Revenue Service have begun to set down rules on how companies should apply the new law to their overseas holdings.

Experts say the newly proposed rule is the first in an expected series of Treasury guidance needed to clarify the new tax law’s international provisions before US-based multi-national corporations can take major investment decisions.

– According to the FT, the Malaysian government appointed a new board of directors at Khazanah Nasional, the country’s $39 billion sovereign wealth fund, less than a week after senior management offered to resign en masse. Prime Minister Mahathir Mohamad will be the fund’s new chair after Najib Razak, former premier, stepped down following defeat in the May elections.

The managing director replacing Azman Mokhtar, whose term would have expired in the first half of next year after 14 years at the fund, has not been appointed yet. Azmin Ali, economic affairs minister, will be joining Khazanah’s board, together with Hassan Marican, former Petronas CEO.

– The WSJ reported that, according to a person familiar with the matter, activist investor Third Point has built a stake of more than $300 million in Campbell Soup. Although it isn’t clear exactly how big the stake is, it amounts to more than 2.5 percent of Campbell’s stock. Third Point had filed for antitrust clearance, people familiar with the matter said, which is necessary if the firm wants to increase its stake and get involved with business decisions at Campbell. A 30-day waiting period ended earlier this week without the government objecting.

Third Point founder Daniel Loeb has spoken with Campbell’s interim CEO Keith McLoughlin about possible courses of action, the people said. It isn’t clear what Third Point’s plans for the stake are. Campbell said in a statement that it maintains an open dialogue with its shareholders.

– The WSJ reported that Apple became the first US company to surpass $1 trillion in market value. Shares of the world’s most valuable public company climbed above $207.04, making it worth $1 trillion overall. The stock has risen more than 21 percent so far this year.

Apple isn’t the world’s first company to pass the $1 trillion mark. In 2007, PetroChina’s market cap surpassed that level by some measures, although the Chinese oil and gas producer’s complicated corporate structure kept most of its shares locked up in government hands, making it difficult to determine the firm’s value.

– US lawmakers demanded that technology firms do more to fight foreign efforts to influence the country’s politics, a day after Facebook identified a new influence campaign tied to November’s elections, according to Reuters. The Senate Intelligence Committee has called executives of Facebook, Twitter and Google to testify on September 5 ‘to hear the plans they have in place, to press them to do more, and to work together to address this challenge,’ Senator Mark Warner, D-Virginia, said at a hearing.

Facebook said on Tuesday that it had removed 32 pages and fake accounts from its platforms in a bid to combat foreign meddling ahead of this year’s congressional elections. ‘While it is shocking to think that foreign actors used the social networking and communication mediums that are so central to our lives in an effort to interfere in the core of our democracy, what is even more troubling is that it’s still happening today,’ Senator Richard Burr, R-North Carolina, told the hearing. Burr and several other senators said they were pleased Facebook had taken action.

Reuters reported that the Commodity Futures Trading Commission (CFTC) said it had awarded whistleblowers more than $45 million for helping the agency identify improper activity. The CFTC said the payouts, a sharp increase from smaller awards granted in previous years, are evidence that it is increasingly receiving tips to help hunt down wrongdoing.

James McDonald, director of the agency’s enforcement division, said it had been a ‘transformative year’ for its whistleblower program, and he expected more to come. ‘Whistleblowers have added significant value to our enforcement program by enabling the commission to swiftly identify misconduct and hold wrongdoers accountable,’ he said in a statement.

– Uber Technologies named former Northrop Grumman CEO Ronald Sugar as independent chair of the company’s board, according to Bloomberg. The move follows a revamping of its corporate governance after the resignation of Travis Kalanick as CEO. Sugar also serves as director at Apple, Amgen and Chevron. He was elected to Uber’s board unanimously, the company said in a statement.

‘We’ve worked hard to strengthen our corporate governance structure over the last year, and we couldn’t have found a better independent chair than Ron,’ Uber CEO Dara Khosrowshahi wrote in an emailed statement. ‘Not only does he have a PhD in engineering, he has incredible experience with complex global technology businesses, both as an executive and in the boardroom. I look forward to learning from his expertise as we take Uber public.’

– The WSJ reported that two dozen state attorneys general have joined efforts to boost the transparency of shell companies by requiring them to disclose their owners. The attorneys general in a letter to congressional leaders said the use of shell companies allows criminals to launder and spend money without accountability. ‘Our investigations can stall when these companies are used to hide the identity of the individual or individuals who control or profit from the company,’ they said.

The attorneys general say they want to ensure legislation adopted by Congress addressing the issue allows for state and local law enforcement to access the information, and that the definition of ‘beneficial owner’ doesn’t allow for loopholes potentially exploitable by criminals.

Sign up to get stories direct to your inbox
Cs logo Cs logo
Loading