The week in GRC: Companies delay return-to-work plans and Vanguard to pay vaccinated workers

Aug 06, 2021
This week’s governance, compliance and risk-management stories from around the web

The Wall Street Journal reported that President Biden’s approaching decision about who should be the next Federal Reserve chair has led to reviews of Jerome Powell’s record on bank regulation and how strict the rulebook should be for Wall Street.

During Powell’s tenure, the Fed has revamped large-bank stress tests, tailored its rules for US banks based on their size and simplified key post-financial crisis regulations such as the Volcker rule. Powell says that collectively these steps have clarified or better calibrated the Fed’s rules. But some progressive Democrats say Powell’s Fed has not been tough enough on large financial services firms. White House officials haven’t said publicly how much Powell’s regulatory record will weigh in deciding whether to offer him a second term.

– According to The New York Times, major US companies are reviewing their plans as Covid-19 spreads across the US, hospitalizations rise again and public health officials warn that the Delta variant carries new risks even for vaccinated people. Some companies are delaying plans to bring workers back to the office, and others are restoring mask requirements for customers. Several have also imposed vaccine mandates having held off on such a step for months.

CNN said US Bank told employees on Wednesday that they will no longer be due back in the office early next month because of surging Covid-19 cases, for example. ‘There are increased caseloads across the globe, and the Delta variant has caused us to adjust our plans,’ CEO Andy Cecere wrote in an email to employees. US Bank had planned to bring employees across the country back to offices on September 7. ‘After weighing our options, we believe the right course of action is to postpone our broader return to office until sometime in the fourth quarter,’ Cecere said.

– Meanwhile, Amazon is postponing a return to the office for its corporate employees until early next year, becoming the latest technology company to do so, CNBC reported. Corporate employees in the US and some other countries will begin returning to the office beginning January 3, 2022. Previously, Amazon had said it expected most of its employees to begin returning regularly to the office the week of September 7 of this year. In recent weeks, other technology companies including Google, Facebook, Apple and Twitter have adjusted their return-to-work plans amid a rise in Covid-19 cases.

– SEC chair Gary Gensler said the agency needs Congress to grant it additional powers to oversee the cryptocurrency market, CNBC reported. Gensler said the SEC has ‘taken and will continue to take our authorities as far as they go.’

He said: ‘Certain rules related to crypto assets are well-settled. The test to determine whether a crypto asset is a security is clear. There are some gaps in this space, though: We need additional congressional authorities to prevent transactions, products and platforms from falling between regulatory cracks. We also need more resources to protect investors in this growing and volatile sector.’

– According to Reuters, a US National Labor Relations Board (NLRB) hearing officer report said interfered with a union election by installing a mailbox to collect ballots and by distributing paraphernalia encouraging employees to vote against organizing. The NLRB official recommended a rerun of the landmark Amazon union election in Alabama where employees overwhelmingly voted against making their warehouse the company’s first to organize in the US.

Amazon said in a statement that it would appeal: ‘Our employees had a chance to be heard during a noisy time when all types of voices were weighing into the national debate, and at the end of the day, they voted overwhelmingly in favor of a direct connection with their managers and the company.’ Amazon has said the mailbox was installed to give nearly 6,000 eligible voters a convenient option for returning their ballots.

CNN reported that Vanguard is offering employees $1,000 to get vaccinated against Covid-19, highlighting how aggressively some companies are moving to encourage workers to act amid concerns about the Delta variant. All of Vanguard's roughly 16,500 US employees are eligible and must show proof of vaccination by October 1. ‘Vanguard recognizes vaccines are the best way to stop the spread of this virus and strongly encourages crew to be vaccinated,’ a Vanguard spokesperson said in a statement. ‘As such, we are offering a vaccine incentive for crew who provide Covid-19 vaccination proof.’

Several major companies have stepped up their efforts to boost vaccination rates. Microsoft, Facebook and Google have all announced in recent days vaccine requirements for employees returning to campuses and offices. Tyson Foods said Tuesday that all office and plant workers must get vaccinated.

Reuters reported that, according to the Law School Admission Council, the number of people applying for admission to law school this fall rose nearly 13 percent, making it the largest year-over-year percentage increase since 2002. The number of people applying with LSAT scores in the highest band of 175 to 180 more than doubled from 732 last year to 1,487 this year.

In total, 71,048 people applied to American Bar Association-accredited law schools this cycle, up from 62,964 at this point in 2020. That’s still lower than the record of 100,601 applicants in 2004, but it’s by far the largest national applicant pool of the past decade. Experts attribute the rush of applications to a number of factors, particularly the slowdown in the entry-level job market caused by the pandemic.

– The WSJ reported that, according to people familiar with the matter, ExxonMobil is considering a pledge to reduce its net carbon emissions to zero by 2050. Exxon CEO Darren Woods is facing pressure from investors to demonstrate a bolder path to reducing emissions. Following a proxy fight this year, an activist hedge fund firm elected three new members to the company’s board. Exxon has not made a final decision on a net-zero pledge, according to the people. It plans to unveil a series of strategic moves on environmental and other issues before the end of the year, they said.

An Exxon spokesperson said the company is committed to working to decarbonize high-emitting sectors and supports regulation that will spur that. ‘As the board goes through its deliberations regarding future plans related to the company’s energy transition activities, we routinely evaluate our work and commitments and will update our shareholders and the public as those plans evolve,’ the spokesperson said.

– The WSJ reported that the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is undergoing its second leadership change this year as acting director Michael Mosier prepared to leave this week. Himamauli Das, a national security expert who has held positions at the White House, National Security Council, Treasury Department and State Department, will become the new acting director of FinCEN. The agency said it was launching a public search for a permanent director.

– The European Banking Authority (EBA) has proposed guidance for financial services compliance officers, the WSJ reported. The proposal is the latest move by the EU to harmonize anti-money laundering rules across member states and shift implementation away from national authorities. ‘This is a step toward paving the way for the new EU-wide authority,’ said David Pasewaldt, a white-collar defense lawyer at Clifford Chance.

Although the EBA’s future role in addressing money laundering is uncertain due to plans to create a specialized anti-money laundering agency, the guidance should have an immediate impact on financial institutions, lawyers said.


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