The week in GRC: Glass Lewis plans overseas expansion and Warren eyes employee elections of directors

– Reuters reported that Martina Merz, chair of Thyssenkrupp’s supervisory board, took over as CEO on October 1. Her appointment was agreed unanimously by the group’s supervisory board and will be limited to a maximum term of 12 months, the group said. It added that the contract with former CEO Guido Kerkhoff was terminated by mutual agreement.

The change in leadership is part of a wider reshuffle of top management at the group. ‘We are now looking to the future and continuing our strategic realignment. In the new executive board team we will take the structural decisions now on the agenda with the necessary consistency,’ Merz said.

Thyssenkrupp’s supervisory board also approved the appointment to the management board of Klaus Keysberg, who will remain head of the materials services business unit until a successor has been found.

– Fashion retailer Forever 21 filed for bankruptcy protection and said it planned to close hundreds of stores, according to The Wall Street Journal. The closely held company has 800 stores globally. It plans to close 350 stores worldwide, including up to 178 in the US, a spokesperson said. Do Won and Jin Sook Chang, the husband and wife team who started the business and still own the company, were listed on Forbes magazine’s list of billionaires as recently as March 2019.

– We Company said it would file a request with the SEC to withdraw its IPO filing, the WSJ reported. The company said it is postponing the offering to focus on its core business and that it has ‘every intention to operate WeWork as a public company’, but didn’t provide a timeframe.

The new co-CEOs, Sebastian Gunningham and Artie Minson, noted in a joint email to staff the week before that they ‘anticipate difficult decisions ahead’. They wrote: ‘As we look toward a future IPO, we will closely review all aspects of our company with the intention of strengthening our core business and improving our management and operations.’

– The New York Times reported that senator Bernie Sanders of Vermont proposed a new corporate tax that would penalize some of the largest US companies if they did not narrow the gap between CEO and average-worker pay. ‘The American people are sick and tired of corporate CEOs who now make 300 times more than their average employees, while they give themselves huge bonuses and cut back on the healthcare and pension benefits of their employees,’ Sanders said in a statement. ‘They want corporations to invest in their workers, not just dividends, stock buybacks and outrageous compensation packages to their executives.’

Sanders’ proposal would impose tax rate increases on companies whose CEOs make at least 50 times what their typical workers earn. It would apply to all private and publicly held corporations with annual revenue of more than $100 million.

– According to the WSJ, the UK’s Financial Reporting Council (FRC) tightened a key accounting standard that governs the definition of a business as a ‘going concern’ following a series of corporate collapses in the country. Businesses are generally considered going concerns unless management intends to liquidate them or cease operations, or there is no realistic alternative but to do so. Under the revised standard, auditors will be required to more robustly challenge management’s going-concern assessment, test the supporting evidence and evaluate the risk of management bias, the FRC said.

‘Our own enforcement work has demonstrated a need to strengthen existing going-concern standards, which is a fundamental aspect of audit, so that investors can have confidence in audited financial statements and businesses’ financial prospects,’ FRC CEO Stephen Haddrill said.

– Reuters reported that Johnson & Johnson (J&J) said it will pay $20.4 million to settle claims by two Ohio counties, enabling the company to avoid an upcoming federal trial seeking to hold the industry responsible for the opioid epidemic. J&J became the fourth drugmaker to settle claims ahead of the federal court trial against multiple manufacturers and distributors in Cleveland scheduled for later this month.

‘The settlement allows the company to avoid the resource demands and uncertainty of a trial as it continues to seek meaningful progress in addressing the nation’s opioid crisis,’ J&J said in a statement. ‘The company recognizes the opioid crisis is a complex public health challenge and is working collaboratively to help communities and people in need.’

J&J, which formerly marketed the painkillers Duragesic and Nucynta, said the settlement includes no admission of liability.

– Bloomberg reported that, according to people familiar with the matter, Airbnb is laying the groundwork for a direct listing rather than an IPO. The company declined to comment.

A direct listing allows companies to reduce the millions of dollars they typically pay to investment banks in underwriting fees, because they don’t issue any new shares and don’t raise any new capital. Instead, they let the market choose the price. Slack Technologies and Spotify Technology have used this approach.

Airbnb last month announced that it would go public in 2020 in a one-sentence press release. The company didn’t give any additional details on the timeline or whether it intends to file for an IPO or take the direct listing route.

– Alison Cooper is stepping down as CEO of tobacco company Imperial Brands after nine years, further reducing the already small number of female bosses of FTSE 100 companies, according to The Guardian. Cooper will step down once a successor is appointed. She has worked at the maker of cigarette brands including Gauloise, Davidoff and John Player Special for two decades. The number of female CEOs at FTSE 100 firms is set to rise to six next month when Alison Rose officially starts leading the Royal Bank of Scotland.

Cooper provided no comment on her unexpected announcement. ‘Alison has worked tirelessly and with great energy and passion during her 20 years with Imperial, nine of which have been as CEO, and the board would like to thank her for the tremendous contribution she has made,’ Imperial Brands chair Mark Williamson said.

– Reuters said presidential candidate senator Elizabeth Warren, D-Massachusetts, would make it easier for employees to join unions and make gig economy workers eligible for overtime. Under her plan, companies with $1 billion or more in annual revenue would have to allow employees to elect 40 percent of the members of their boards of directors.

– Glass Lewis’ new executive chair Kevin Cameron said the proxy adviser intends to grow its business abroad in the face of newly introduced SEC curbs, according to Reuters. The SEC said in recent guidance that proxy advisers cannot distribute inaccurate information, potentially making them legally liable if they do. It also clarified that investors have no obligation as shareholders to vote their shares, which could reduce their reliance on proxy advisers.

‘We want to keep expanding globally, including in Asia where we historically haven’t been as strong,’ Cameron said, adding that ‘Europe will also see growth, building on the investment we’ve made building out our presence there in recent years.’ Last month, Glass Lewis also hired Gordon Seymour as its special counsel for public policy to help deal with the new regulatory landscape, Cameron said.

– The WSJ said that BP CEO Bob Dudley will retire next year, after nearly a decade steering the company through the aftermath of the Deepwater Horizon crisis. Dudley will step down in February and be succeeded by Bernard Looney, the CEO of BP’s upstream operations. Looney will take over the CEO role and join the BP board on February 5, the company said.

‘During his tenure he has led the recovery from the Deepwater Horizon accident, rebuilt BP as a stronger, safer company and helped it re-earn its position as one of the leaders of the energy sector,’ BP chair Helge Lund said.

–Reuters reported that, according to people familiar with the matter, Okapi Partners is hiring a senior executive from an advisory firm to help expand its business with corporate clients. Okapi, which specializes in guiding clients through shareholder votes on proxy contests, recruited Mark Harnett to join later this month. Harnett most recently worked at public relations firm Sard Verbinnen & Co’s corporate governance advisory unit, Strategic Governance Advisors.