The pre-Thanksgiving week in GRC: FCC targets net neutrality rules, and DoJ sues to block AT&T-Time Warner deal
– The Wall Street Journal reported that a revamp of General Electric’s (GE) board will remove many long-term associates of former CEO Jeff Immelt and is intended to create a board that is more closely aligned with CEO John Flannery’s strategy to streamline the company. The unusual overhaul will claim half of GE’s 18 directors and add three new ones to form a 12-member board. Flannery has said he wants a smaller board ‘with some new members with key skills relative to where the company is going.’ The board hasn’t decided which incumbents will lose their seats.
– Three Glencore executives stepped down as directors of Katanga Mining, Glencore’s copper and cobalt unit in the Democratic Republic of Congo, after an internal review found ‘material weaknesses’ in financial reporting controls at the operation, according to Bloomberg. Questions about the ‘appropriateness’ of some of Katanga’s accounting practices arose during an investigation by the Ontario Securities Commission, the company said.
Glencore has nominated three new directors to the Katanga board, including the group’s CFO Steven Kalmin. The diversified mining group will also strengthen controls across its copper department to enhance its financial, corporate governance and control processes, Glencore said.
– Maria Contreras-Sweet, who led the Small Business Administration under former US president Barack Obama, has submitted an offer to acquire Weinstein Co, according to a letter to the board of directors reported by the WSJ. In the letter, Contreras-Sweet said she hopes to be executive chair of a majority-female board heading Weinstein Co, which would be renamed.
– The SEC appointed Paul Cellupica as deputy director of the agency’s division of investment management, in which role he will oversee a number of the division’s strategic, rulemaking and industry engagement initiatives, and will also serve as a senior adviser to director Dalia Blass. Cellupica most recently was managing director and general counsel for securities law at Teachers Insurance and Annuity Association of America (TIAA), where his responsibilities included legal support for the TIAA-Cref mutual fund complex.
– Bloomberg reported that Citigroup and BNP Paribas dropped in global regulators’ ranking of banks that pose the biggest threat to the financial system, and authorities recommended they face lower capital surcharges. Although the rankings reflect an international consensus about the relative risk of the world’s biggest lenders, supervisors in some jurisdictions have already put in place more stringent requirements than the Financial Stability Board’s standards.
– The WSJ reported that the US Department of Justice (DoJ) sued to block AT&T from taking over Time Warner in a challenge to a deal it says would give one company too much control in a rapidly evolving media landscape. AT&T CEO Randall Stephenson said the suit ‘defies logic’ and that the company would fight the case, the first major antitrust action under the Trump administration.
‘This merger would greatly harm American consumers. It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy,’ said Makan Delrahim, chief of the department’s antitrust division.
Stephenson said: ‘I’ve done a lot of deals in my career but I’ve never done one where we have disagreed with the DoJ so much on even the most basic of facts.’
– Paris and Amsterdam have been chosen as the new homes for two prized EU agencies, after ministers resorted to picking names from a hat to decide where the two organizations should move after Brexit, according to the Financial Times. Three rounds of voting failed to produce a clear winner in the contests to relocate the European Banking Authority (EBA) and the European Medicines Agency, both of which are based in London. Paris pipped Dublin after lots were drawn in the race for the EBA.
– Reuters reported that Ajit Pai, head of the US Federal Communications Commission, unveiled plans to repeal landmark 2015 rules that prohibited internet service providers (ISPs) from impeding consumer access to web content, in a move that promises to recast the digital landscape. Pai, a Republican appointed by President Donald Trump, said the commission will vote at a December 14 meeting on his plan to rescind the so-called ‘net neutrality’ rules championed by the Obama administration that treat ISPs like public utilities.
The rules bar broadband providers from blocking or slowing down access to content or charging consumers more for certain content. They were intended to ensure a free and open internet, give consumers equal access to web content and prevent broadband service providers from favoring their own content.
– According to the FT, Uber admitted that it failed to tell users or regulators about a data breach that included the names, email addresses and phone numbers of 57 million passengers and drivers. The New York attorney general’s office said it had opened an investigation into the data breach. Uber discovered it had been hacked in December 2016 but, instead of notifying regulators or the people affected, it paid $100,000 to the hackers to destroy the stolen information, the company said.
CEO Dara Khosrowshahi, who took the helm at Uber in September, issued an apology and said he had started an investigation into the breach as soon as he learnt about it. ‘None of this should have happened, and I will not make excuses for it,’ Khosrowshahi wrote in a statement. ‘While I can’t erase the past, I can commit on behalf of every Uber employee that we will learn from our mistakes. We are changing the way we do business.’
– The WSJ reported that Meg Whitman, one of Silicon Valley’s most experienced CEOs and one of the most prominent women in US business, said she will step down as chief executive of Hewlett Packard Enterprise (HPE) early next year. Whitman said she would consider taking another CEO position. ‘It would have to be the right role,’ she said. ‘I’ve been working non-stop for 35 years, so I’ll definitely take some downtime to recharge.’
Antonio Neri, who has been with HPE for more than 20 years and holds the job of president, will take over as CEO in February. ‘Antonio is a deeper technologist than I am,’ said Whitman, who will remain on HPE’s board of directors.