June 9, 2020

Change: One Asset Manager’s Call for Companies to do More

As a lifelong Minnesota resident, I was jolted by the killing of George Floyd and the protests and unrest that followed, which are bringing a slew of other historical & current incidents to light.  Many CEOs were also moved by these events and quickly issued “anti-racism” statements.  But there are already calls for companies to follow those statements with more tangible steps. A recent blog post with a call to action from John Streur, President and CEO of Calvert Research and Management, says Calvert will start holding companies accountable for inaction – so at least some asset managers are using this moment to push for more change.  Streur’s post says Calvert will call on companies to do the following:

– Publicly provide the information required to accurately assess racial diversity – Calvert acknowledges that companies aren’t required by law or regulation to disclose publicly the racial makeup of their board and management, but says companies generally have this information to the extent employees have self-identified, and companies should make the information public

– Disclose pay equity information across race and gender

– Make clear to local, state and federal governments that they must address police brutality against black people

– Publicly state what they are doing to combat racism and police brutality

– Take action to address systemic failures in our education system

The blog post concludes by saying that Calvert will take more action to push for changes needed to eliminate racism and police brutality in America.  It also says investors need to do a better job of differentiating companies based on where they stand on these issues and hold them accountable for inaction.

Improving Board Oversight of Human Capital Management

As Covid-19 has brought increased focus to workplace safety, employee pay and other human capital issues, a recent EY white paper provides insight from directors to assist with improved board oversight of human capital.  The report’s findings are based on a director survey about governance of human capital.  Although the report says most boards spend more time on talent strategy than they did just five years ago, it also identifies areas of opportunity for boards, including:

– Making, or reaffirming, oversight of human capital and culture as a strategic priority as 30% of directors indicated that they are either unsure or unable to articulate their company’s cultural strengths and weaknesses

– Enhancing board knowledge and understanding through more regular interactions with and reporting from the CHRO – nearly half of directors surveyed said the CHRO doesn’t regularly report on human capital to the board

– Beyond hearing from the CHRO, bringing an outside perspective into the boardroom is crucial to keeping a pulse on external trends, challenging internal bias, identifying blind spots and bringing an objective viewpoint and new ideas to the strategic planning process

– Regularly incorporating a more comprehensive set of culture and talent-related metrics will make those discussions more robust and productive, and assigning explicit responsibilities at the full board or committee level will provide greater visibility and foster accountability

May-June Issue of “The Corporate Counsel”

We’ve wrapped up the May-June issue of “The Corporate Counsel” print newsletter – and will be mailing it soon (try a no-risk trial). The topics include:

– A Word From Our Founder — What We Each Can Be Doing Now

– Forward-Looking COVID-19 Disclosure: Watch Your Step!

– Corp Fin CDIs and FAQs on COVID-19 Exemptive Order

– Planning for Continuity of Board Operations During the COVID-19 “Emergency”

– Lynn Jokela