– The Wall Street Journal reported that companies’ ethics hotlines received fewer reports overall from employees last year despite a surge in Covid-19-related health and safety reports. Third-party managers of the hotlines saw a decrease in the total number of reports in 2020, with 54 mn employees lodging more than 1.3 mn internal reports, a roughly 7.1 percent decrease from 2019, according to Navex Global.
Reports regarding concerns or potential wrongdoing related to the environment, health and safety increased by 47 percent as the pandemic hit, according to data from Navex. The decline in overall reporting could be attributed in part to layoffs, furloughs and business closures during 2020, according to risk experts. But remaining employees may also have been more hesitant to report potential wrongdoing in fear of retaliation amid economic uncertainty, the experts said.
– The Financial Times reported that US companies are facing the largest number of demands from shareholders to address environmental and social concerns in four years as they press management teams over their handling of the Covid-19 pandemic. Investors have submitted 484 proposals on environmental or social issues to US companies ahead of this year’s AGMs compared with 446 last year, according to ISS.
‘The shift from just disclosure to accountability — generally, in terms of shareholder engagement and proposals — is increasing and accelerating,’ said Peter Reali, a senior director at Nuveen. ‘Part of what is driving that acceleration is some of these Covid-related issues.’
– According to CNBC, the National Labor Relations Board (NLRB) found Amazon illegally retaliated against two of its internal critics when it fired them last year. Amazon last April fired Emily Cunningham and Maren Costa, two former user experience designers, for ‘repeatedly violating internal policies.’ Cunningham and Costa argued they were fired in retaliation for their continued criticism of the company.
The NLRB confirmed to CNBC that it found merit to Cunningham and Costa’s unfair labor practice complaint, adding that it would file a complaint against Amazon unless it settles the case. In a statement, an Amazon spokesperson said the company disagrees with the NLRB’s decision: ‘We support every employee’s right to criticize their employer’s working conditions, but that does not come with blanket immunity against our internal policies, all of which are lawful. We terminated these employees not for the reasons cited in the preliminary finding, but because they repeatedly violated internal policies.’
– The Guardian reported that Senate minority leader Mitch McConnell, R-Kentucky, told CEOs critical of voting restrictions to ‘stay out of politics.’ Dozens of companies have condemned a new election law in Georgia while Major League Baseball has moved the All-Star Game from the state in protest. He warned companies against giving into advocacy campaigns. ‘It’s jaw-dropping to see powerful American institutions not just permit themselves to be bullied, but join in the bullying themselves,’ he said.
‘From election law to environmentalism to radical social agendas to the second amendment, parts of the private sector keep dabbling in behaving like a woke parallel government,’ McConnell said. ‘Corporations will invite serious consequences if they become a vehicle for far-left mobs to hijack our country from outside the constitutional order.’
– Ken Taylor, head of executive search platform Director Search, said boards have an opportunity to diversify leadership ranks in the coming years, according to CNBC. Taylor estimated that roughly 45,000 executive searches will need to be conducted within the next five years as many directors are expected to retire, potentially opening a door for companies to bring more diverse members onto their boards.
‘There’s a lot that we should do in terms of broadening the issue of diversity and inclusion and it starts with equality and opportunity,’ Taylor said. ‘There’s no excuse anymore for someone to say, ‘gee, we didn’t know about that person’ when recruiting board members.’ Of the 272,000 directors globally, more than 31,000 are aged 70 or older, Taylor noted.
– The Guardian reported that JPMorgan Chase chair and CEO Jamie Dimon said the US has been ‘torn and crippled by politics, as well as racial and income inequality’ but is about to enter a post-pandemic boom. In his annual letter to shareholders, Dimon also called for greater corporate involvement in the political sphere, amid pressure on businesses to speak up on issues including racial inequality and voting rights.
The US needs a ‘Marshall plan,’ which would mean more spending on infrastructure, education, affordable childcare and job training and ‘may very well mean higher taxes for the wealthy.’
– John Coates, acting director of the SEC’s division of corporation finance, warned about the surge in fundraising by blank-check companies known as special purpose acquisition companies (Spacs), according to the WSJ. Coates said there are ‘some significant and yet undiscovered issues’ with Spacs, which allow private companies to go public with a structure that offers outsize potential rewards to backers while bypassing some safeguards of a traditional IPO.
– GameStop said Chewy co-founder Ryan Cohen will become its chair after the company’s AGM scheduled for June 9, according to CNBC. Cohen invested in GameStop last year to push the video game retailer to focus on online sales and close unprofitable stores in malls. His involvement with the company helped spark the wild ride for its stock earlier this year. Cohen is also manager of activist investor RC Ventures.
– The WSJ reported that credit card startup Petal Card has hired Elizabeth Corbett, who was once a senior official at the Consumer Financial Protection Bureau, as its new general counsel and chief compliance officer. Her most recent post was as deputy general counsel and senior vice president of compliance at the State Employees’ Credit Union in Raleigh, North Carolina.
The hiring of Corbett comes as the company looks for help navigating regulatory issues in Washington, DC and expanding its product offerings, the company said.
– The SEC announced that Jane Norberg, chief of the agency’s office of the whistleblower, is planning to leave the agency this month. Norberg has been with the office since near its inception in 2012, serving as its first deputy chief and, since 2016, its chief. She has streamlined the awards review and adjudication process, managed an expansion of the office's staff and overseen a dramatic growth in the number of awards issued to whistleblowers. The office's deputy chief, Emily Pasquinelli, will serve as acting chief following Norberg’s departure.
SEC acting chair Allison Herren Lee says in a statement: ‘As head of that office, Jane's commitment, talent and laser focus on the interests of whistleblowers made her an invaluable member of our team. Though she will be sorely missed, she leaves as her legacy a program that has seen year after year of record setting numbers of awards and levels of payouts.’
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
