Skip to main content
Jan 20, 2023

The week in GRC: Canada expected to introduce forced labor law and Disney responds to Peltz’s board bid

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

Reuters (paywall) reported that Walt Disney Co defended its decision to deny Nelson Peltz a board seat, saying the activist investor ‘lacked the skills and experience’ to help the entertainment company in its business. Peltz earlier this month launched a battle for a board seat at Disney, saying he would help rescue the company from what he called a ‘crisis’ of overspending on its streaming business, the purchase of 21st Century Fox and failed succession planning.

‘Nelson Peltz does not understand Disney’s businesses and lacks the skills and experience to assist the board in delivering shareholder value in a rapidly shifting media ecosystem,’ Disney said. Peltz’s Trian Fund Management declined to comment.

Unless Peltz settles with Disney, investors will vote on whether he should sit on the company’s board. Last year, the AGM was held on March 9.

– The SEC announced that Renee Jones, director of the division of corporation finance, will leave the agency to return to her faculty position at Boston College Law School, effective February 3. Erik Gerding, who is at present the division’s deputy director, will be appointed director of the division.

‘Renee has led the division of corporation finance during a time when we have proposed – and, in numerous cases, adopted – critical reforms to benefit investors,’ said SEC chair Gary Gensler. ‘I am grateful for her counsel, judgment and deep understanding of the capital markets.’

Jones has overseen the division’s work that resulted in the proposal of 12 rules and the adoption of nine rules covering topics such as the disclosure of climate-related risks and cyber-security risks, special purpose acquisition companies, executive compensation and insider trading.

CNN reported on the launch of an initiative called the #WorkingWithCancer Pledge at the 2023 World Economic Forum in Davos, Switzerland. Companies that have already agreed to the pledge include Bank of America, Disney, Google, L’Oréal, Marriott, McDonald’s, Meta, Microsoft, Nestlé, PepsiCo, Toyota, Unilever and Walmart.

Employers who take the pledge promise ‘to abolish [the] job fear and insecurity that exist for cancer sufferers in the workplace.’ They also pledge to do a better job of publicizing to their workforces the benefits they already have in place for employees with cancer and for employees taking care of a family member with cancer. They will further consider ways to do more.

– According to The Wall Street Journal (paywall), the Canadian government may require that companies report on their efforts to stop goods made with forced labor from entering their supply chains. Pending legislation would compel many companies to report on steps taken to prevent or reduce the use of forced labor in their supply chains by detailing, among other things, parts of the supply chains where forced labor might be occurring and the company’s due diligence procedures.

The bill could become law as soon as March, according to the office of Senator Julie Miville-Dechêne, who sponsored the legislation. With the passage of S-211, Canada would join several other governments in trying to stop businesses’ use of forced labor. The US has taken one of the most aggressive tacks with a law that bars most imports from China’s Xinjiang region and has allocated more resources to its enforcers.

– UN Secretary General António Guterres accused fossil fuel producers and their financial backers of ‘racing to expand production, knowing full well that their business model is inconsistent with human survival,’ CNN reported. Speaking at the World Economic Forum in Davos, Guterres said the commitment to limit global warming to 1.5 degrees above pre-industrial levels is ‘going up in smoke’.

Meanwhile, a new report from the campaign group Reclaim Finance shows that dozens of banks and financial institutions with net-zero pledges are still pouring money into fossil fuels. The report analyzes financial services firms that signed up to the Glasgow Financial Alliance for Net-Zero pact, agreeing to align their investments with the ambition of keeping global warming to 1.5 degrees. It finds that since signing, members have invested hundreds of billions of dollars into fossil fuels.

CNBC reported that, according to a report from the American Clean Power Association, technology companies are leading efforts by firms to buy wind and solar power. Amazon, Facebook parent company Meta and Google, owned by parent company Alphabet, are the top three corporate purchasers of wind and solar energy, the report states. The technology sector is ahead of other industries in buying clean power, but it’s been increasing across all industries. From 2012 to 2022, the amount of wind and solar energy bought by companies has increased by an average of 73 percent per year.

– Deutsche Bank hired a veteran of Barclays and American Express Co to be its new chief compliance officer (CCO) and reshuffled other positions as it revamps its compliance programs, the WSJ reported. Laura Padovani will join Deutsche Bank on April 1 as its group CCO and head of compliance, according to a memo seen by the WSJ.

Padovani spent seven years at Barclays, most recently as its compliance chief, and 20 years at American Express. She will succeed Pascal Tagné, who has been compliance chief for the past two years. He will become head of compliance for the Asia-Pacific region and will relocate to Singapore, the announcement said.

– The WSJ reported that the proportion of US workers who are members of unions fell to a record low last year even though unions added more members than in any year since 2008 following union elections at companies such as Starbucks, and Apple. Roughly 10.1 percent of wage and salary workers were union members last year, down from 10.3 percent in 2021, the US Department of Labor said.

The membership rate has been falling for decades as the economy has become more focused on services industries, in which workers haven’t traditionally been unionized. Union membership grew by 273,000 last year to 14.3 mn, an increase of 1.9 percent. But the overall labor force grew by 5.3 mn, or 3.9 percent, the department said.

– Netflix said co-founder Reed Hastings has stepped down as co-CEO and will become executive chair, according to the WSJ. The company promoted Greg Peters to co-CEO alongside Ted Sarandos. ‘Frankly, more and more, they’ve been leading the company,’ Hastings said of Sarandos and Peters during a video interview for investors. The company’s board had been discussing succession planning for many years, Hastings noted in a blog post.

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...