– CNBC reported that Chevron agreed to buy Hess for $53 bn in stock, the second proposed huge merger among the biggest US oil companies after ExxonMobil bid $60 bn for Pioneer Natural Resources earlier in the month. The deal signals Chevron’s plans to continue boosting investments in fossil fuels as oil demand remains strong and big producers use acquisitions to replenish their inventory following years of under-investment.
Hess Corp CEO John Hess is expected to join Chevron’s board of directors once the deal closes around the first half of 2024. Chevron said that following the completion of the deal, it plans to increase its share repurchases program by $2.5 bn to the top of its $20 bn annual range.
– Reuters (paywall) reported that dozens of US states are suing Meta Platforms and its Instagram unit, accusing them of contributing to a mental health crisis among young people through the addictive nature of their social media platforms. In a complaint filed in the Oakland, California federal court, 33 states including California and Illinois said Meta has repeatedly misled the public about the substantial dangers of its platforms and knowingly induced young children and teenagers into addictive and compulsive social media use.
‘Meta has harnessed powerful and unprecedented technologies to entice, engage and ultimately ensnare youth and teens,’ the complaint states. ‘Its motive is profit.’
Meta said it had sought to make young people safe online. ‘We’re disappointed that instead of working productively with companies across the industry to create clear, age-appropriate standards for the many apps teens use, the attorneys general have chosen this path,’ Meta said in a statement.
– Top US banking regulators completed a revamp for the online banking era of anti-redlining rules aimed at making banks lend more in lower-income communities, The Wall Street Journal (paywall) reported. The 1977 Community Reinvestment Act (CRA) sought to end banks’ historical practice of denying or limiting financial services in minority neighborhoods. The present rules generally require banks to serve everyone in the communities surrounding their branches, including lower-income people.
Regulators say those requirements are outdated now that much financial activity happens over the internet and with mobile phones. They are updating the rules to focus more on where banks do business, rather than their physical locations. ‘The final rule takes a critical step forward in modernizing the CRA regulations,’ said Michael Barr, the Federal Reserve’s vice chair for banking supervision, in a statement.
Agency officials said they had made adjustments to the final version of the rules and that it will be possible for banks to get outstanding ratings.
– Reuters reported that according to two people familiar with the matter, VF Corp is facing pressure from activist investor Legion Partners Asset Management. VF Corp was already being pushed to make changes by Engaged Capital. Legion has built a stake in VF Corp, which owns The North Face, Vans and Timberland brands, the people said. VF did not immediately respond to a request for comment. Legion declined to comment.
Engaged has called on VF to cut costs, make no additional acquisitions in the near future and hire advisers to review its non-core assets. VF recently added former Nike executive Trevor Edwards to its board. It noted that it has appointed three new directors to the board over the past 18 months who have footwear and apparel, retail and design experience.
– Reuters reported that conservative group the Alliance for Fair Board Recruitment, which lost a challenge to Nasdaq’s board diversity disclosure rule, appealed the decision and requested a full court review, saying the rule discriminates based on race and sex. The rule approved by the SEC requires companies listed on Nasdaq to have women and minority directors on their boards or explain why they do not. A panel of three judges on the 5th US Circuit Court of Appeals recently rejected lawsuits seeking to block the rule, saying constitutional claims do not apply to Nasdaq, which is a private entity.
The Alliance for Fair Board Recruitment, one of the groups that sued, is now requesting that the full 5th Circuit review the ruling. The group was created by Edward Blum, the conservative legal activist behind the US Supreme Court’s ruling that declared unlawful the race-conscious student admissions policies used by Harvard University and the University of North Carolina.
A Nasdaq spokesperson did not immediately reply to a request for comment.
– A bipartisan group of legal experts including a federal appeals court judge and a former US solicitor general gave their support to 18-year term limits for US Supreme Court justices, calling the proposal a ‘vital reform’ that would reduce partisanship and improve the judiciary’s overall reputation, Reuters reported.
In a report released by the American Academy of Arts & Sciences, the group argued that Congress should end life tenure among the justices through a statute and empower the US president to appoint new members to the high court every two years. The 11-member group convened by the scholarly society to study how to implement term limits included US Circuit Judge Diane Wood, a member of the Chicago-based 7th US Circuit Court of Appeals and appointee of former president Bill Clinton.
– The Financial Times (paywall) reported that Hein Schumacher, Unilever’s new CEO, said the idea of corporate purpose could be an ‘unwelcome distraction’ for some brands. The consumer group’s results were not matching its potential, Schumacher said, as he set out a strategy focused on faster growth, productivity and building a ‘performance culture’, as well as an overhaul of the group’s leadership team.
Unilever has faced criticism in the past for focusing on brand purpose and sustainability at the expense of financial performance. Schumacher said that for some brands, purpose was central to the marketing and positioning to consumers, but for others it was an ‘unwelcome distraction’, adding that the time and investment the company had put into sustainability may have ‘diluted efforts’ in areas such as performance.
‘Not every brand should have a social or environmental purpose. And we don’t want to force fit that on brands unnecessarily,’ he said.
– Morgan Stanley said Ted Pick will succeed James Gorman as CEO at the start of 2024, CNBC reported. Pick, a company veteran who rose to lead the bank’s Wall Street operations, will also join the board. Gorman will stay on as executive chair for an undisclosed period. Morgan Stanley had announced in May that Gorman intended to step down within a year and that it would select his successor from one of the bank’s three main division heads. Pick led the bank’s institutional securities group, which includes investment banking and trading activities, and was co-president of Morgan Stanley for the last two years.
– According to Reuters, the National Labor Relations Board (NLRB) issued a final rule making it easier for workers and unions to hold companies liable for labor law violations by their franchisees and contractors. The NLRB rule will treat companies as ‘joint employers’ when they have control – even if it is indirect or not exercised – over essential terms and conditions of employment such as pay, scheduling, hiring & firing and supervision. A company that is found to be a joint employer would likely be required to become more involved in setting and implementing workplace policies and could be required to bargain with unions. The rule takes effect on December 26 and will be applied to cases filed after that date.
NLRB chair Lauren McFerran in a statement called the new rule ‘a legally correct return to common-law principles’ and a practical approach to ensure the entities that effectively exercise control over workers’ terms of employment respect their bargaining obligations.
– The FT reported that Sarah Bloom Raskin, a former Federal Reserve board member conducting a United Nations consultation, said policy changes and backtracks by national governments are holding back corporate plans to curb global warming. Raskin said companies are struggling to make climate plans. ‘It’s hard to plan to invest when a policy context is either patchy, non-existent [or] not well designed,’ she said.
Raskin, now a climate policy consultant who teaches corporate law at Duke University, is co-lead of the UN consultation with Bing Leng, a member of the International Sustainability Standards Board. The findings will be released at the UN COP28 climate summit, to be held in Dubai from November 30, as part of the groundwork for a new UN framework on accountability of net-zero goals.
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...
