— The SEC proposed amendments to its auditor independence framework. The proposed changes are designed to mean that relationships and services that would not pose threats to an auditor’s objectivity and impartiality do not trigger non-substantive rule breaches or potentially time-consuming audit committee review of non-substantive matters.
‘The proposal is consistent with the commission’s long-recognized view that an audit by an objective, impartial and skilled professional enhances both investor protection and market integrity, and, in turn, facilitates capital formation,’ SEC chair Jay Clayton said in a statement. ‘In practice, the proposed amendments also would increase the number of qualified audit firms an issuer could choose from and permit audit committees and commission staff to better focus on relationships that could impair an auditor’s objectivity and impartiality.’
— CNN reported that Japanese authorities raided the house where Carlos Ghosn was staying before he escaped to Lebanon. Ghosn - the former chair of Nissan and Mitsubishi Motors, and former chair and CEO of their alliance partner, Renault - had been awaiting trial on charges of financial wrongdoing. He was removed from his posts at Nissan and Mitsubishi Motors following his arrest in November 2018, and later resigned from Renault.
Ghosn revealed that he had fled Japan for Lebanon to escape what he called a ‘rigged’ justice system. He has repeatedly denied the charges against him.
— According to The Wall Street Journal, a survey from the Conference Board found that fear of a recession topped the list of CEOs’ concerns going into 2020. Last year, recession fears ranked third for US CEOs, although first overall for CEOs globally, which is again the case for 2020. Uncertainty around a variety of issues such as trade and climate change has exacerbated their anxiety. Other top concerns for US CEOs include more intense competition, the tight labor market and global political instability.
— Reuters reported that Sunrise Communications CEO Olaf Swantee quit and chair Peter Kurer said he will not run for re-election after shareholders blocked the company’s $6.3 billion bid for Liberty Global’s Swiss cable unit, UPC. Sunrise said its CFO Andre Krause will succeed Swantee as CEO, which was welcomed by the telecom firm’s largest shareholder Freenet. Freenet had opposed the UPC deal.
‘In the past weeks Freenet has spoken with [Krause] about potential changes, and he made it clear that he sees a successful future for Sunrise as a stand-alone company. This convinced us,’ Freenet said. Krause declined a request for an interview, with a spokesperson saying he first wants to talk to employees and customers before going public in his new role. ‘Management and the board — with the exception of the Freenet representative — were firmly convinced that the takeover of UPC was the best plan, but that does not mean Sunrise cannot be successful on its own, too,’ the spokesperson said.
— The coming year will see change at the Financial Accounting Standards Board (FASB), according to the WSJ. Russell Golden will step down as chair at the end of June after seven years in the position. In the month until then, the board is focused on two issues: differentiating liabilities from equity and improving the measurement of goodwill. Richard Jones, chief accountant and partner at EY, will succeed Golden in July.
FASB in July proposed a new standard to help companies further differentiate between liabilities and equity. The narrow differences between liabilities and equity have led to confusion among companies and investors and led to many restatements. Separately, the board is trying to decide whether to propose changes to the measurement of goodwill.
— Reuters said that Brazilian personal care cosmetics company Natura & Co Holding named executive chair Roberto Marques as group CEO after closing its acquisition of Avon Products. Jan Zijderveld, Avon’s CEO, stepped down following the completion of the deal. He will be succeeded by Angela Cretu, who most recently served as general manager of Avon’s Central Europe division. Cretu will report to Marques, along with the CEOs of other Natura-owned brands, Aesop and The Body Shop.
Marques joined Natura’s board four years ago and has led a global expansion that included the acquisition of The Body Shop in 2017.