– The Wall Street Journal reported that business leaders and trade groups called for an end to the violence in Washington, DC and a peaceful transfer of power after supporters of President Donald Trump stormed the Capitol where legislators were meeting to certify president-elect Joe Biden’s Electoral College victory. CEOs, including the leaders of Google and Bank of America, condemned the violence.
BlackRock chair and CEO Larry Fink called the violence ‘an assault on our nation, our democracy and the will of the American people.’ Brad Karp, chair of law firm Paul Weiss Rifkind Wharton & Garrison, said Trump was aided by a ‘complicit group of senators and congressmen’ to undermine democracy.
Jay Timmons, president and CEO of the National Association of Manufacturers, said Vice President Mike Pence should consider invoking the 25th amendment, which allows for a transfer of power when a president is unable to fulfill his duties.
Sean McGarvey, president of North America’s Building Trades Unions, which represents more than 3 million workers, called on Trump and senators Ted Cruz, R-Texas, and Josh Hawley, R-Missouri, along with the other lawmakers who had said they would object to certifying some states’ Electoral College votes, to step down.
The Business Roundtable called on Trump and other officials to ‘put an end to the chaos and to facilitate the peaceful transition of power.’
– The WSJ later reported that Facebook banned Trump indefinitely and Canada-based Shopify closed online stores associated with Trump’s campaign and businesses.
A number of companies said they fired employees who participated in the riot after seeing their staff in photos and videos posted to social media. For example, managers at Navistar Direct Marketing saw on Twitter that a man wearing a company badge was among rioters inside the US Capitol. After reviewing photos, the company said the employee had been ‘terminated for cause.’
‘While we support all employees’ right to peaceful, lawful exercise of free speech, any employee demonstrating dangerous conduct that endangers the health and safety of others will no longer have an employment opportunity with Navistar Direct Marketing,’ the company said. A spokesperson declined to name the employee.
Ron Shaich, former CEO of Panera Bread who is also an investor in several other chains and involved in No Labels, a political group that supports centrist lawmakers, said executives have the right to fire workers believed to have engaged in illegal activities.
The Lincoln Project, a group of anti-Trump Republicans and former Republicans, said it is planning ‘a brutal corporate pressure campaign’ targeting companies, trade associations, CEOs and others that ‘serve as the financiers of the authoritarian movement that attacked the US Capitol,’ said Steve Schmidt, a political strategist and a co-founder of the group, in a tweet.
Rich Lesser, CEO of Boston Consulting Group, said the business community must be clear-eyed about the behavior of Trump and members of Congress who acted as enablers. ‘If we look past these actions and treat them as an isolated event by engaging and supporting these individuals, then we also risk being complicit in encouraging future actions that destabilize our country,’ he said.
– Bloomberg reported that shareholders in Fiat Chrysler Automobiles and PSA Group at separate meetings approved a merger to create Stellantis, the world’s fourth-largest automaker. Fiat Chrysler and PSA executives believe they will boost returns with scale more closely resembling Volkswagen and Toyota Motor Corp, and will have greater resources to compete in terms of electric cars and the technology industry.
– FASB plans to address issues around accounting for goodwill and disclosure of expenses in 2021 following a year marked by a leadership transition and the economic chaos caused by the coronavirus pandemic, according to the WSJ. ‘Our agenda is filled with important items, but those are two that have drawn a lot of interest from people,’ said Richard Jones, who took over as FASB chair in July. The board recently started asking stakeholders what its priorities should be over the next several years, and expects to release a paper this summer for the public to comment on.
The board, which has seven members, this year wants to improve how companies recognize the value of goodwill – a hotly debated topic in the world of accounting – and make changes to how businesses reveal certain expenses to investors.
– The WSJ reported that Carl Icahn sold more than half his stake in Herbalife Nutrition and is giving up his seats on the nutritional-supplements company’s board. Icahn recently sold about $600 million of his 16 percent Herbalife stake back to the company and, given that his holdings will go below the level stipulated in an agreement he has with the company, he also plans to give up the five board seats held by his representatives, the company said.
– Qualcomm CEO Steve Mollenkopf is retiring and will be succeeded by company president Cristiano Amon on June 30, CNBC reported. ‘Steve navigated through unprecedented circumstances during his tenure, facing more in his seven years as CEO than most leaders face in their entire careers,’ said Qualcomm chair Mark McLaughlin in a statement. Amon came up through the company’s mobile chip division, and has been second-in-command as president since 2018.
– CNBC reported that the NYSE will delist three Chinese telecommunication companies, its second reversal on the matter in two days. The NYSE said the latest shift was due to new guidance from the US Department of the Treasury’s Office of Foreign Assets Control that said people in the US could not engage in certain transactions with the three companies as of next Monday.
The NYSE had announced the previous week that it would delist US-traded shares of China Telecom, China Mobile and China Unicom to comply with an executive order signed by Trump seeking to bar US companies and individuals from investing in companies that the administration alleged aid the Chinese military.
Chinese officials criticized the NYSE’s original decision to delist the companies, with a spokesperson for the CSRC saying Monday that the executive order ‘entirely ignored the actual situations of relevant companies and the legitimate rights of the global investors, and severely damaged market rule and order.’
– Snow Lake Capital urged MGM Resorts International to sell 20 percent of its China business to a strategic partner, calling it a ‘win-win transaction’ for all, according to Reuters. Snow Lake, which owns roughly 7.5 percent of MGM China Holdings’ shares, wrote in a letter to MGM’s board that such a move would give MGM Resorts financial flexibility, give the company enough capital to commit to its Osaka, Japan gaming integrated resort project and bring non-gaming resources to both MGM China and Macau.
MGM did not immediately respond to a request for comment.
– According to the WSJ, the Committee of Sponsoring Organizations (COSO) of the Treadway Commission is looking to provide more practicable advice on managing emerging risks. COSO has spent recent months publishing more prescriptive advice meant to supplement broad-stroke suggestions in its most-recognized documents: one on internal controls and another on enterprise risk management.
In the year ahead, the group intends to release detailed recommendations on how organizations can better manage risks related to cloud computing, artificial intelligence and outside contractors, among other topics. The reports would follow a series of similar ones issued over the past two years on topics such as cyber-attacks, blockchain and compliance risks. ‘We want to make sure these very broad, principles-based frameworks can be effectively applied in the real world,’ said COSO chair Paul Sobel.
– CNBC reported that Apple said its board of directors regularly discusses antitrust risks, language that is new in this year’s proxy statement.
The new passage reads: ‘The audit committee and board regularly review and discuss with management Apple’s antitrust risks. Apple’s antitrust compliance officer is responsible for the development, review and execution of Apple’s antitrust compliance program and regularly reports to the audit committee. These reports cover, among other matters, the alignment of the program with Apple’s potential antitrust risks, and the effectiveness of the program’s design in detecting and preventing antitrust issues and promoting compliance with laws and Apple policies.’
The details about Apple’s antitrust compliance program feature in an expanded section about which parts of Apple the audit committee oversees, including data security, business conduct and taxes. An Apple representative declined to comment.
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...
