October 12, 2015

Conflict Minerals: Would the FBI Challenge You?

Here’s a note from Lawrence Heim of Elm Sustainability Partners:

Not ones to cry wolf, we had a bit of a shock at the ThomsonReuters Governance and Risk Seminar we participated in this morning. One of the sessions included a representative from the FBI’s International Corruption Unit. Just to be clear, this is the US Federal Bureau of Investigation. The topic was current enforcement of the Federal Corrupt Practices Act (“FCPA”). We asked if matters such as conflict minerals, human rights abuses and human trafficking were on their radar screen, expecting a blank stare or an overly-general “non-answer answer.” Instead, a direct – and rather unnerving answer – was given. To summarize:

– The FBI has already identified linkages between known instances of FCPA violations/concerns (corruption, doing business in ”low integrity countries”) and human trafficking/human rights abuses. Human rights matters are of current interest to them.
– FBI’s FCPA enforcement resources have grown dramatically in recent years.
– FBI has unlimited global reach for FCPA compliance enforcement.
– Conflict minerals experts would do well to have at least a basic understanding of FCPA.

We don’t know what that all means just yet, but we do think it adds another dimension of risk to the SEC filings, compliance status and supplier relationships.

Lawrence will be among the speakers of our upcoming webcast: “Conflict Minerals: Tackling Your Next Form SD“…

Pay Ratio: Another House Bill Seeks to Repeal

Here’s a blog by Cooley’s Cydney Posner:

On September 30, the House Financial Services Committee approved, by a vote of 32 to 25, H.R. 414, the Burdensome Data Collection Act, following committee consideration and a mark-up session. Given that the bill is only one paragraph long, there was not too much to mark up. The bill will now go to a full vote of the House. The bill would repeal Section 953(b) of Dodd-Frank, the pay-ratio provision, and make any regulations issued pursuant to it of no force or effect.

Any of this sound familiar? It should. The very same bill was introduced in 2011, but went nowhere. (See this news brief.) With President Obama still holding the veto pen and a substantial constituency supporting the pay-ratio provision, a different result seems unlikely this time.

Europe: Director Duties & Liabilities

This 31-page “Guide to Directors’ Duties & Liabilities” was released last week by the European Confederation of Directors’ Associations. See the heading entitled “Comply-or-explain needs more explanation.” I guess that caption is tongue-in-cheek…

– Broc Romanek