In Focus

CII Report Suggests Ways Boards Can Combat Sexual Harassment

In a new report, CII offers public company boards of directors a range of steps to consider to mitigate the risk of sexual harassment. The 11-page guide details practical steps that touch on personnel, training, policies and procedures, board composition and diversity. “From Weinstein to Wynn (Resorts), we have seen how allegations of sexual misconduct can have profound repercussions for companies—damaging operations and reputation, driving up legal costs, driving down share value and casting an ethical pall over a company,” CII Executive Director Ken Bertsch said. “Overseeing how top executives manage risk is one of the most important duties of a board. Sexual harassment is now on boards’ radar screens but reports suggest many have not done enough to address this risk. CII’s report offers practical ideas on how to tackle this threat.” The report also includes a list of questions shareholders can ask directors to assess the quality of their oversight of sexual harassment.

CII’s Co-Signed Letter Outlines Proxy Advisor Bill’s Worrisome Provisions

CII sent a letter co-signed by 48 institutional investors and investor organizations February 27 to the chair and ranking member of the Senate Banking Committee expressing serious concerns about H.R. 4015, the Corporate Governance Reform and Transparency Act of 2017. The bill was passed by the House in December and referred to the Senate committee. The correspondence says if enacted the legislation would increase costs for pension plans and other institutional investors with no clear benefits and bias proxy advisory firms in favor of corporate management. Specifically, the letter takes issue with provisions in the legislation to: 1) grant companies the right to review the proxy advisory firms’ research reports before investors; 2) mandate that proxy advisory firms hire an ombudsman to resolve corporations’ complaints; 3) require proxy advisory firms to publish a company’s statement “detailing its complaints” in the proxy advisory firms’ final reports to their clients; and 4) increase barriers to new entrants and potentially lead some current proxy advisory firms to exit the industry. CII sent a similar co-signed letter November 9 to the chair and ranking member of the House Financial Services Committee.

Hong Kong Exchange Proposes Permitting Weighted Voting Rights

The Stock Exchange of Hong Kong (HKEx) on February 23 proposed new rules to permit listings of companies with weighted voting rights (WVR), and other changes. HKEx seeks comments, which are due by Friday, March 23. HKEx has been a bulwark for the principle of one-share, one-vote, which it inisists “continues to be the optimum method of empower shareholders and aligning their interests in a company.” However, HKEx hopes that permitting WVR for certain emerging growth companies will help the exchange attract more listings. See the HKEx presentation here.