– The Wall Street Journal reported that Amazon is bucking the trend of companies requiring arbitration in disputes with customers and employees. The company recently changed its terms of service to allow customers to file lawsuits. Amazon’s decision to drop its arbitration requirement is an example of how companies are responding to plaintiffs’ lawyers pushing the arbitration system to its limits.
The company made the change after plaintiffs’ lawyers flooded it with more than 75,000 individual arbitration demands on behalf of Echo users, triggering a bill for tens of millions of dollars in filing fees, according to lawyers involved, payable by Amazon under its policies. Amazon had no comment on the change to its terms of service but said its Echo devices record only when in use and that customers can delete the recordings or choose not to have them saved.
– The Guardian said that, according to research, a proposal to be tabled by US President Joe Biden at the upcoming G7 meeting for a 15 percent global corporate tax rate could reap the EU €50 bn ($61 bn) a year. Under Biden’s proposal, multinational companies would be prevented from shifting profits across borders to exploit the most attractive low-tax locations because their profits would be taxed at a minimum global corporation tax rate where they are either booked or headquartered.
– Robinhood Markets named three new directors to its board as it prepared for what is expected to be one of the year’s most eagerly awaited IPOs, according to the WSJ. The new board members are former Apple and Bridgewater Associates executive Jon Rubinstein, PwC partner Paula Loop and former World Bank president Robert Zoellick. Rubinstein and Zoellick’s appointments are effective immediately, and Loop’s is be effective from June 17.
Until these appointments, Robinhood’s board didn’t have a female director, which would have put it at odds with a 2018 California law requiring all public companies with headquarters in the state to have women on their board.
– According to the WSJ, the Equal Employment Opportunity Commission (EEOC) issued updated guidance on May 28 stating that federal laws don’t prevent an employer from requiring workers to be vaccinated against Covid-19. But in some circumstances federal laws may require the employer to provide reasonable accommodations for employees who, because of a disability or a religious belief, aren’t vaccinated. For example, the EEOC said as a reasonable accommodation, an unvaccinated employee entering the workplace might wear a face mask, work at a social distance or be given the opportunity to telework.
The new guidelines also say that federal laws don’t prevent or limit incentives that can be offered to workers to voluntarily take the vaccine. Employers that are administering vaccines to their employees may also offer incentives, as long as the incentives are not coercive.
– Reuters reported that SEC chair Gary Gensler said the agency will review shareholder voting rule changes adopted under the administration of former president Donald Trump that have faced criticism for weakening investor power. Gensler said the SEC would consider drafting a new proposal for overseeing proxy advisers.
In August 2019 the SEC issued guidance requiring proxy voting firms to take more steps to disclose how they draft their shareholder recommendations. The agency also outlined steps the firms should consider to ensure they are voting the way investors designate. The agency last July finalized restrictions on proxy advisers by requiring them to show their voting recommendations to public companies at the same time as or before sending them to clients. The agency also raised the bar for these firms by mandating they inform their clients of public companies’ responses to their advice.
– The WSJ reported that, according to records it obtained, the SEC told Tesla last year that CEO Elon Musk’s use of Twitter had twice violated a court-ordered policy requiring his tweets to be pre-approved by company lawyers. In correspondence sent to Tesla in 2019 and 2020, the SEC said tweets Musk wrote about Tesla’s solar roof production volumes and its stock price hadn’t undergone the required pre-approval by Tesla’s lawyers.
Tesla, Musk and the SEC didn’t respond to requests for comment. The WSJ obtained the records under a federal Freedom of Information Act request.
– The Guardian reported that member nations of the G7 have put billions of dollars more into fossil fuels than they have into clean energy since the Covid-19 pandemic, despite their promises of a green recovery. New analysis from development charity Tearfund, the International Institute for Sustainable Development and the Overseas Development Institute shows that the countries attending the G7 summit committed $189 bn to support oil, coal and gas between January 2020 and March 2021. In comparison, the same countries – the UK, the US, Canada, Italy, France, Germany and Japan – spent $147 bn on clean forms of energy. The support for fossil fuels from the countries included measures to remove or downgrade environmental regulations as well as direct funding of oil, gas and coal.
– According to the WSJ, more companies are putting money behind US business leaders’ pledges to improve diversity, equity and inclusion by tying executive compensation to specific goals. For example, Starbucks in January said it would give top executives more shares if the company’s managerial ranks grow more diverse over three years. McDonald’s in February gave executives annual incentives to increase the share of women and racial minorities in leadership roles by 2025. In March Nike said it would for the first time tie some executive pay to five-year goals for improving racial and gender diversity in its workforce and leadership positions.
‘Metrics like these seem to be a kind of new evolution in what’s expected of executives,’ said Rick Hernandez, chair of McDonald’s board, who was involved in the company’s compensation changes. ‘It’s really a growth, a maturation of thinking about what’s really good for a company and what a company’s role is in society, how you serve your customers and at the same time serve your investors.’
– According to CNBC, the Biden administration is calling for corporate executives and business leaders to take immediate steps to prepare for ransomware attacks, warning that cyber-criminals are moving from stealing data to disrupting core operations.
‘The threats are serious and they are increasing,’ wrote Anne Neuberger, President Biden’s deputy national security adviser for cyber and emerging technology, in a June 2 memo. ‘The private sector also has a critical responsibility to protect against these threats. All organizations must recognize that no company is safe from being targeted by ransomware, regardless of size or location.’
The White House memo lists five best practices for safeguarding against ransomware attacks.
– CNN reported that Tobias Adrian, director of the International Monetary Fund’s monetary and capital markets department, said climate change poses serious risks to the stability of the financial system. The comments echo a warning made last September in a report published by the climate subcommittee of the Commodity Futures Trading Commission (CFTC) that acknowledged ‘climate change poses a major risk to the stability of the US financial system and to its ability to sustain the American economy.’ The report urged regulators to ‘more urgently and decisively’ work to address looming economic damage from climate change.
Adrian outlined four key areas where climate should be incorporated into financial regulation, including by introducing climate stress-testing of physical risks and how exposed economies are to the energy transition. SEC chair Gensler has told Congress he plans to introduce new rules around corporate climate disclosures later this year.
– A newly passed Senate bill would temporarily create a separate account to pay for the operation of the CFTC’s whistleblower program as the agency confronts a funding crisis over a large potential payout, according to the WSJ. A similar bill may be considered by the US House of Representatives. ‘We continue to work with Congress to ensure the program’s success,’ said a CFTC spokesperson.
– CNBC reported that United Airlines is offering new incentives to flight attendants and pilots who show proof they have received a Covid-19 vaccination. It is the latest plan from a company seeking to encourage employees to get inoculated.
United’s CEO Scott Kirby in January said he wanted to make vaccines mandatory for employees but so far the company has not made a decision. Delta Air Lines last month said the vaccine would be mandatory for new employees. Both Delta and American Airlines have offered employees extra time off to get vaccinated.
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...
