Across the Board
SEC Adopts New Rules Requiring Disclosure of Cyber Attacks
The SEC’s interest in cybersecurity follows major corporate hacks in recent years, including 2020’s SolarWinds attack
“The Securities and Exchange Commission voted to adopt final rules requiring public companies to disclosure material cybersecurity attacks to the public at a meeting Wednesday. The rules will require companies to determine whether a cyber attack it has suffered will have a material impact on its operations, and then disclose the event within four days of that determination. Public companies will also have to describe any processes they have to manage material risks from cyber security threats. Any disclosures can be delayed if the U.S. Attorney General determines that immediate disclosure would pose a major risk to national security or public safety and notifies the SEC of that determination.” MARKET WATCH
AI Leaders Create Industry Watchdog
The Frontier Model Forum includes Google, OpenAI, Microsoft, and startup Anthropic
"Facing calls to put guardrails on artificial intelligence development, a group of tech companies including Alphabet Inc.’s Google and OpenAI Inc. are creating an industry body to ensure that AI models are safe. The effort, also backed by AI startup Anthropic and Microsoft Corp., aims to consolidate the expertise of member companies and create benchmarks for the industry” BLOOMBERG
Elliott Takes Big Stake in Drugmaker Catalent
Elliott is in the news again, talking to a slate of nominees to run in a proxy contest
“Activist investor Elliott Investment has built a significant stake in Catalent and is pushing for a shake-up on the contract drug manufacturer's board…The push comes at a turbulent time for the contract drug manufacturer, which said in April that slow production at three of its facilities would impact its fiscal 2023 results and that chief financial officer Thomas Castellano had stepped down.” REUTERS
FTC Withdraws Case Against Microsoft-Activision Deal
Microsoft and Activision can attempt to negotiate a settlement with the FTC
“The Federal Trade Commission will likely pause an internal trial opposing Microsoft’s $69 billion bid to purchase video game giant Activision Blizzard, just days after the FTC failed to stop the mega-merger in federal court…Microsoft has faced worldwide regulatory scrutiny due to concerns the acquisition would hurt competitors such as Sony, whose PlayStation console competes with Microsoft’s Xbox.” FORBES
Pandemic Practice Persists in Cutting C-Suite Salaries
With salary cuts, executives show that they acknowledge and are sympathetic to a difficult economy
“The pandemic-era pay cuts that swept across many C-suites are now a regular part of some companies’ road maps for tough times. Executives at technology companies such as Zoom Video Communications, Intel and Micron Technology have taken cuts to their base salary this year as their businesses trimmed spending and laid off workers. And as was the case during the pandemic, the cuts to base pay have gone beyond chief executives to include finance chiefs, operations leaders and corporate attorneys. Before the pandemic, compensation experts say, executives’ base salary typically had been left alone during periods of corporate belt-tightening.” THE WALL STREET JOURNAL
The Rise and Fall of the Chief Diversity Officer
Diversity executives are the first to go as company priorities shift
“Two years ago chief diversity officers were some of the hottest hires into executive ranks. Now, they increasingly feel left out in the cold. Companies including Netflix, Disney and Warner Bros. Discovery have recently said that high-profile diversity, equity and inclusion executives will be leaving their jobs. Thousands of diversity-focused workers have been laid off since last year, and some companies are scaling back racial justice commitments. Diversity, equity and inclusion—or DEI—jobs were put in the crosshairs after many companies started re-examining their executive ranks during the tech sector’s shake out last fall.” THE WALL STREET JOURNAL
The Shaky History of Corporate Makeovers
Five controversial company rebrandings should serve as a warning for the company formerly known as Twitter
“Elon Musk has suggested he could swap Twitter’s bird logo, which has adorned the site since its earliest days, for an ‘X’. The site’s billionaire owner said the switch could come as early as Monday morning if a suitable replacement emerges in time. However, such an overhaul could prove highly risky, given the history of customer backlashes to previous high-profile corporate rebrands…Oil giant BP unveiled a new sunburst logo in 2000, named the Helios mark after the Greek sun god, as it sought to rebrand itself as an environmentally aware energy firm. It said its name would stand in future for “beyond petroleum” rather than British Petroleum, but environmental campaigners were unimpressed and accused the firm of greenwashing.” THE GUARDIAN
It’s the ‘Golden Age’ for Lawyers Seeking Corporate Board Seats
Law firms are less worried about conflicts of interest and are more interested in putting lawyers on corporate boards
“Public companies are increasingly looking for lawyers to become corporate directors, bringing legal expertise to the boardroom and prestige to attorneys who can navigate potential conflicts…Lawyers have long served on the boards of privately held companies and nonprofits. US public companies are coming to see the value of having more legal know-how in the boardroom as the web of compliance and regulatory requirements grows…Market-changing events like the pandemic and new challenges arising from artificial intelligence, cybersecurity, and geopolitical concerns make lawyers attractive candidates” BLOOMBERG
Board Directors Skew Older as Companies Loosen Age Constraints
The data shows companies prefer board members to retire at 75
“Jim Nevels, a 71-year-old former board chairman of Hershey Co., figures his experience sitting on the boards of eight companies gives him an edge…He’s got plenty of company. Despite younger mandatory retirement ages for many rank-and-file workers, board directors for S&P 500 companies are increasingly skewing older. The percentage of directors in their late sixties has risen the largest, while younger directors in their forties and below have decreased in recent years.” BLOOMBERG
What Boards Need To Know To Remain Resilient Against Cyber Risk
Many boards are navigating unfamiliar territory as they work to find directors with cybersecurity experience
“Once the domain of the IT department, cybersecurity now encompasses the entire organization. From increasingly sophisticated cybercriminals and an exploding attack surface to heightened financial consequences of successful attacks and new cyber regulations, cyber risk is business risk—making cybersecurity a central element of board governance. Emphasizing the importance of board involvement in cybersecurity, the U.S. Securities and Exchange Commission (SEC) proposed new rules in 2022 for public companies that, among other things, would require disclosure about the cybersecurity expertise of board members.” FORBES
