The week in GRC: Group attacks ‘woke’ capitalism, and companies pledge disability representation disclosures

May 21, 2021
This week’s governance, compliance and risk-management stories from around the web

The Wall Street Journal reported that AT&T and Discovery reached a deal to combine their media assets into a new, publicly traded company. The new business will be led by Discovery CEO David Zaslav. The companies said Jason Kilar will retain his title as CEO of AT&T’s WarnerMedia division but declined to say whether he would remain with the newly combined company after it secures regulatory approval.

WarnerMedia owns cable channels such as HBO, CNN, TNT and TBS as well as the Warner Bros television and film studio. Discovery has a portfolio that includes its namesake network and HGTV. Both companies also offer streaming video portals that compete with services such as Netflix and Walt Disney’s Disney+.

The Guardian reported that leaders from 500 of the world’s biggest companies have agreed to publish quarterly reports into disability representation, amid evidence of a lack of progress in tackling diversity among multinational firms. The Valuable 500 global disability network said it had reached its target to get 500 major companies including Microsoft, Unilever, Google and Coca-Cola to put disability inclusion on their boardroom agenda.

The group said its members would be held accountable to raising disability representation through quarterly updates and reporting on their progress, aiming to tackle the ‘shocking state’ of disability representation in business. According to research published by The Valuable 500, there are no executives or senior managers who have disclosed a disability at any of the UK’s biggest companies in the FTSE 100, while only 12 percent report on the total number of employees who are disclosed as disabled.

– The SEC announced whistleblower awards to four individuals totaling more than $31 mn. The SEC has awarded roughly $873 mn to 162 individuals since issuing its first award in 2012.

– According to Reuters, Glass Lewis recommended that ExxonMobil shareholders elect two of hedge fund firm Engine No 1’s four board nominees in a proxy contest. Activist Engine No 1 has taken aim at Exxon’s board and its future direction in the first major shareholder contest to make climate change a top issue.

Glass Lewis recommended that shareholders vote for Gregory Goff, former CEO of oil refiner Andeavor, and Alexander Karsner, a former US assistant secretary of state for energy efficiency and renewable energy. It is the third proxy adviser to support part or all of Engine No 1’s slate.

Exxon and Engine No 1 could not be immediately reached for comment.

CNBC reported that a conservative group is launching an advertising campaign designed to push back against what it sees as ‘woke capitalism.’ Organizers say the campaign, which is being mounted by the conservative group Consumers’ Research, is designed to change the thinking in corporate boards around the economic and political costs of getting involved in issues such as voting rights.

‘Increasingly we’re seeing companies taking their eye off the ball,’ said William Hild, executive director of Consumers’ Research. ‘Our focus is always on the consumer. And that’s what it should be for these companies as well, but increasingly we’re seeing them work to curry favor with woke politicians, rather than focusing on serving their consumers.’

The decision to weigh in on political issues is a tough one for US business leaders. In a CEO survey out this week, Fortune reports that chief executives are split ‘right down the middle’ on the issue.

– The SEC announced an award to a whistleblower totaling more than $28 mn in connection with an SEC enforcement action and a related action by another agency. The whistleblower’s information caused both the SEC and the other agency to open investigations that resulted in significant enforcement actions.

– According to the WSJ, a new program to reward those who report possible violations of anti-money-laundering laws has had a slow start. The program, included in the annual defense spending bill passed into law in January, is intended to offer rewards to people who voluntarily provide original information to the US Department of the Treasury or US Department of Justice on possible violations of the Bank Secrecy Act when their tips lead to enforcement actions with monetary sanctions of more than $1 mn.

But the law didn’t set a deadline for the implementation of the whistleblower regulatory framework, designate an agency to implement it or set a floor for rewards. Treasury Secretary Janet Yellen has delegated responsibility for the whistleblower program to the Financial Crimes Enforcement Network (FinCEN), a Treasury spokesperson said, adding that FinCEN has already received tips from several purported whistleblowers and is evaluating those tips.

– Popeyes Louisiana Kitchen has started releasing data showing the racial and ethnic breakdown of internal and external personnel involved in its marketing efforts and has said it will give preference to ad agencies that demonstrate a commitment to improving their diversity, the WSJ reported.

The company said it will release the information annually to show how diversity is faring in the casts of its ads, its creative production teams, its teams at ad agencies and its own marketing department. It also said it will take measures such as mandating that at least 50 percent of the candidates bidding to direct its ads be ethnically diverse or female.

 

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