The week in GRC: Trump pauses FCPA enforcement and Missouri AG sues Starbucks over DEI policies

– The BBC reported that President Trump halted enforcement of the Foreign Corrupt Practices Act (FCPA) that allows the prosecution of Americans accused of bribing foreign officials. The law prohibits US companies from trying to retain or win new business with other countries by bribing government figures. A White House statement said ‘over-expansive’ and ‘unpredictable’ enforcement of the FCPA risked the ‘economic advancement of the US.’

Trump has also directed US authorities to review current and past actions related to the law and to find new guidelines for the FCPA’s enforcement. The White House said: ‘US companies are harmed by FCPA over-enforcement because they are prohibited from engaging in practices common among international competitors, creating an uneven playing field.’

Transparency International said Trump’s order ‘diminishes – and could pave the way for completely eliminating – the crown jewel in the US’s fight against global corruption.’

– The Wall Street Journal reported that activist Elliott Investment Management disclosed a stake in Phillips 66 and said it is pushing the oil refining company to consider operational changes to boost its stock. Elliott is seeking to streamline Phillips 66, most notably with the sale or spinoff of its big midstream business, as the WSJ reported previously.

Elliott had first pushed Phillips 66 for strategic improvements in late 2023. A few months later, the parties came to an agreement on a new board member and said they would work together to name a second director in the coming months. That second director has yet to be named. Elliott said it believes Phillips 66 hasn’t fulfilled its commitment to further board changes.

In a statement, Phillips 66 said its 2024 results reflect its success in achieving its strategic commitments and that its targets for the coming years are designed to drive greater long-term shareholder value. It said it welcomes constructive dialogue with all of its shareholders.

– US Vice President JD Vance said the US believes overzealous rulemaking could ‘kill’ the AI sector, CNN reported. ‘We believe that excessive regulation of the AI sector could kill a transformative industry just as it’s taking off,’ Vance told heads of state and CEOs gathered in Paris for the Artificial Intelligence Action Summit. ‘And I’d like to see that deregulatory flavor making its way into a lot of the conversations [at] this conference.’

Vance’s address followed the repeal by Trump last month of an executive order signed by former President Joe Biden that set out actions to manage AI’s national security risks and prevent discrimination by AI systems, among other goals.

– Meanwhile, The Guardian reported that the impact of AI on the environment and inequality also featured in exchanges at the Paris summit. Emmanuel Macron’s AI envoy, Anne Bouverot, opened the gathering with a speech referring to the environmental impact of AI, which requires vast amounts of energy and resources to develop and operate. ‘We know that AI can help mitigate climate change, but we also know that its current trajectory is unsustainable,” Bouverot said. Sustainable development of the technology would be on the agenda, she added.

The general secretary of the UNI Global Union, Christy Hoffman, warned that without worker involvement in the use of AI, the technology risked increasing inequality. The UNI represents about 20 mn workers worldwide in industries including retail, finance and entertainment. ‘Without worker representation, AI-driven productivity gains risk turning the technology into yet another engine of inequality, further straining our democracies,’ she told attenders.

– Reuters reported that a spokesperson for Goldman Sachs said the bank had cancelled a four-year-old policy to only take public companies that had two diverse board members. ‘As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy,’ the spokesperson said. ‘We continue to believe that successful boards benefit from diverse backgrounds and perspectives and we will encourage them to take this approach.’

Trump has issued a series of executive orders aimed at dismantling diversity, equity and inclusion (DEI) programs in the federal government and the private sector. Goldman Sachs’ DEI policy had existed since 2020, when it announced that it would only take public a company in the US or Western Europe if at least one of its board directors counted as diverse. In 2021 it raised this to two diverse board members, one of whom had to be a woman.

– According to the WSJ, Trump administration officials are discussing plans to curb and combine the power of banking regulators – without Congress’ input. In recent discussions, Trump advisers and allies have examined whether it is possible to collapse the Federal Deposit Insurance Corp (FDIC) into the US Department of the Treasury, according to people familiar with the matter. They have also discussed combining the FDIC’s regulatory role with the Office of the Comptroller of the Currency under the Treasury Department.

– The Guardian reported that the state of Missouri has sued Starbucks for alleged discrimination because its workforce has ‘become more female and less white.’ The state’s Republican attorney general filed a lawsuit accusing the coffee company of engaging in ‘systemic racial, sexual and sexual orientation discrimination’ through its DEI policies, including hiring quotas, advancement opportunities and board membership.

The lawsuit alleges that as of August 23, 2020, the company’s US employee breakdown was 69 percent women, and that by 24 September 2024 the figure was 70.9 percent women. It also says that in 2020 the company’s US workforce was ’47 percent black, indigenous and people of color,’ compared with September 28, 2024 figures showing ‘8.1 percent black, 31.7 percent Hispanic, 5.6 percent Asian, 47.8 percent white, 0.6 percent American Indian or Alaska Native and 0.5 percent Native Hawaiian or other Pacific islander’ – adding up to 46.5 percent non-white, a slight drop from 2020.

Despite the figures appearing to show no major changes, the lawsuit emphasizes that ‘since 2020, Starbuck’s workface [sic] has become more female and less white.’

‘We disagree with the attorney general and these allegations are inaccurate,’ a Starbucks spokesperson said in a statement. ‘We are deeply committed to creating opportunity for every single one of our partners (employees). Our programs and benefits are open to everyone and lawful.’

– Siemens’ board lost its attempt to allow the company to continue to hold virtual-only AGMs in future, according to Reuters. Some 71 percent of shareholders approved the change to the company’s rules, which would allow virtual AGMs to be held for the next two years, missing the 75 percent needed. The move had been criticized by some shareholders who said it prevented them showing their support or opposition to company proposals or speaking with each other.

Chair Jim Hagemann Snabe said he regretted the outcome, particularly as most shareholders had voted for online AGMs, which Siemens has held since 2021, to continue. Snabe was re-elected to the company’s board for another two years.

– President Trump nominated a former Commodity Futures Trading Commission (CFTC) commissioner and crypto-currency policy lead at venture-capital firm a16z to run the derivatives market regulator, the WSJ reported. Brian Quintenz, a Republican, was a CFTC member between 2017 and 2021 and led the agency’s technology advisory committee that hosted public policy discussions and briefings.

Quintenz most recently worked as the head of policy at a16z crypto, Andreessen Horowitz’s crypto-currency arm. Quintenz also serves as a board member at event contracts trading exchange Kalshi and previously was an advisory council member at crypto exchange Crypto.com, according to his profile on LinkedIn.