Board Accountability and Risk Management – How IR Can Help the Board Identify and Avoid Risk
Tuesday, June 7, 2022 | 2:00PM
- 2:50PM | Room: Ensemble B
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Education Session
| Niels Holch | Maureen Bujno | Ellen Richstone | Timothy Sedabres, IRC |
Recent Developments suggest that both the Securities & Exchange Commission and the Department of Justice have identified the Board as the entity where “The Buck Stops Here.” Corporate Fraud, Risk oversight and ESG practices - how boards oversee these situations under such scrutiny – is the topic of this panel.
ESG is becoming an increasingly important topic. With the recent ESG driven proxy contest at Exxon (by Engine No 1) certain investors are increasingly attempting to influence companies to improve climate related plans and disclosures. Also, investors are having more success in court regarding “Caremark” claims with Boards whose Directors were deemed to have failed to make a “good faith” effort to oversee the company’s operations. Courts are becoming less friendly to corporations on this issue and Plaintiffs are able to gain more information now to help them become successful. Investors are increasingly willing to vote against Directors at companies who they feel lack adequate risk and compliance programs. Boards cannot pass on the responsibility of risk oversight to management, they are increasingly being held more accountable. Product Safety, Financial integrity and regulatory compliance issues are front and center. How can the Board implement good ESG and Governance practices which will be well received by regulators, key investors, and other stakeholders?
Learning Objectives:
- How Boards can implement effective oversight to avoid negligence and criminal liability. Boards cannot pass along this oversight responsibility to management. Special care must be taken to document risk management in board minutes.
- What should the company look for in recruiting new directors and what board committees are involved
- How to install increased board accountability for ESG issues, corporate culture, purpose, and sustainability and working with the CEO to incorporate these factors into business strategy.
- How can the IR team identify shareholders who could become plaintiffs and help prepare management and the Board with actionable information.
- New SEC guidance makes it more difficult for companies to exclude shareholder proposals as economically irrelevant or as a matter of ordinary business when the proposal relates to environmental, social or governance (“ESG”) issues. How can the IR team help to attain a successful vote?