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First Hawaiian Proxy Voting Recommendation

Corporate Governance -

First Hawaiian, Inc. (FHB) operates as a bank holding company for First Hawaiian Bank that provides a range of banking services to consumer and commercial customers in the United States. Although First Hawaiian is controlled by BNP Paribas (“BNPP”), it is still worth it for non-controlling shareholders to vote and express our wishes because of […]

The post First Hawaiian Proxy Voting Recommendation appeared first on Corporate Governance.

HLS Program Seeks Academic Fellows

The Harvard Law School Forum on Corporate Governance and Financial Regulation -

The Harvard Law School Program on Corporate Governance is seeking applications from highly qualified candidates who are interested in working with the Program, and Program Director Lucian Bebchuk, as Post-Graduate Academic Fellows in the areas of corporate governance and law and finance. Candidates should be interested in spending two to three years at Harvard Law School (longer periods may be possible). Candidates should have a J.D., LL.M., or S.J.D. from a U.S. law school, or a Ph.D. in economics, finance, or related areas by the time they commence their fellowship. Candidates still pursuing an S.J.D. or Ph.D. are eligible so long as they will have completed their program’s coursework requirements by the time they start.

During the term of their appointment, Post-Graduate Academic Fellows work on research and corporate governance activities of the Program, depending on their skills, interests, and Program needs. Fellows may also work on their own research and publishing in preparation for a career in academia or policy research. A significant number of former Fellows of the Program now teach in leading law schools in the U.S. and abroad.

Applications are considered on a rolling basis, and the start date is flexible. Interested candidates should submit a CV, transcripts, a writing sample, a list of references, and cover letter to the coordinator of the Program, Ms. Jordan Figueroa, at coordinator@corpgov.law.harvard.edu. The cover letter should describe the candidate’s experience, reasons for seeking the position, career plans, and the kinds of projects and activities in which he or she would like to be involved at the Program. The position includes Harvard University benefits and a competitive fellowship salary.

Ten Crypto-Financing Caveats

The Harvard Law School Forum on Corporate Governance and Financial Regulation -

Posted by John Reed Stark, John Reed Stark Consulting, LLC, on Wednesday, April 18, 2018 Editor's Note: John Reed Stark is President at John Reed Stark Consulting, LLC. This post is based on a publication authored by Mr. Stark.

Floyd “Money” Mayweather is one of the greatest pound-for-pound boxers in history, while DJ Khaled is a brilliant musical artist and wildly popular Internet phenomenon. The two superstars actually have a lot in common.

They are both: astute, accomplished and prosperous entrepreneurs; larger-than-life personas, with tens of millions of online followers and fans; and extraordinary success stories rooted in hard work, endless creativity and brilliant execution.

But those are not the only traits they share.

(more…)

The Investor View on Executive Compensation in 2018

The Harvard Law School Forum on Corporate Governance and Financial Regulation -

Posted by Chris Wightman and David Martin, CamberView Partners LLC, on Wednesday, April 18, 2018 Editor's Note: Chris Wightman is a Partner and David Martin is a Principal at CamberView Partners LLC. This post is based on a CamberView publication by Mr. Wightman and Mr. Martin.

In the first few months of 2018, significant media attention has been focused on new pay-ratio disclosures and how the repeal of the Section 162(m) performance-based compensation tax deductions will impact executive-compensation decisions. But behind the headlines, top of mind for investors voting proxies are perennial and emerging topics such as the alignment of metrics with company strategy, rigor of goal setting, pay magnitude and the responsiveness of compensation committees to low say-on-pay votes. This proxy season, companies should be prepared to engage with investors on their evolving view of compensation as a window into long-term value creation.

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Compliance into the Weeds-Episode 78, an episode about Weed

FCPA Compliance & Ethics -

In this episode, Matt Kelly and I go meta as we go into the weeds about Weed, in the context of the recent announcement by the administration that it would not prosecute persons or producers in states where marijuana sales are legal. In exchange for this concession, Colorado Senator Corey Gardner says he will lift [...]

The post Compliance into the Weeds-Episode 78, an episode about Weed appeared first on Compliance Report.

Stop the Presses!

Corporate Compliance Insights -

The Fifth Circuit Vacates the DOL Fiduciary Rule On March 15, 2018, the U.S. Court of Appeals for the Fifth Circuit, in a 2-1 decision,1 vacated the U.S. Department of Labor’s (DOL) Fiduciary Rule. The Fifth Circuit found that the DOL overstepped its authority and acted unreasonably by enacting the Fiduciary Rule. with co-authors Michael R. Manley, The post Stop the Presses! appeared first on Corporate Compliance Insights.

(This is only a summary. Click on the headline to view the entire article at Corporate Compliance Insights and participate in the discussion.)

The Henman Innovative Approach to Hiring

Corporate Compliance Insights -

How to Build a Bench of Future Leaders When putting plans in place for a future leadership team, timing is crucial. Will successors be ready to step into the positions they’re being groomed for when the executives in those roles are ready to retire? What if there’s a gap of a few years or more? The post The Henman Innovative Approach to Hiring appeared first on Corporate Compliance Insights.

(This is only a summary. Click on the headline to view the entire article at Corporate Compliance Insights and participate in the discussion.)

Farewell to Hall Greer: The Role of a Compliance Committee Chair – Part I

FCPA Compliance & Ethics -

The National Basketball Association (NBA) playoffs have begun and there is some great hoop action going on for the next 37 days. It was in this context that I was saddened to read about the death of Hal Greer. Greer was an eight-time all-star for the Syracuse Nationals and later Philadelphia Seventy-Sixers. He was a [...]

The post Farewell to Hall Greer: The Role of a Compliance Committee Chair – Part I appeared first on Compliance Report.

We Need To Approach AI Risks Like We Do Natural Disasters

BRINK News -

The risks posed by intelligent devices will soon surpass the magnitude of those associated with natural disasters. Tens of billions of connected sensors are being embedded in everything ranging from industrial robots and safety systems to self-driving cars and refrigerators. At the same time, the capabilities of artificial intelligence algorithms are evolving rapidly. Our growing reliance on so many intelligent, connected devices is opening up the possibility of global-scale shutdowns.

The good news is that natural disasters themselves, which Munich Re says caused $330 billion in economic losses globally in 2017, provide a template for how to mitigate the growing and catastrophic risk posed by AI. Like they have for extreme weather and natural disasters, companies can begin to establish international protocols and standards to govern AI within their own walls as well as in their relationships with other companies, insurers, and policymakers.

Intelligent Device Recovery Plans

Today, many companies are exposed to intelligent device risks that could harm both their own operations as well as their customers. Yet few have formally quantified the size of their revenue at risk and potential liability. Nor have they set up safety and security protocols for potential black swan AI events.

They should. Like the risks associated with natural disasters, companies cannot completely protect against smart-device risks by buying insurance; they must have worst-case scenario recovery plans. Managers have to figure out their higher- and lower-risk intelligent device vulnerabilities, add in redundant systems, and potentially set up the AI equivalent of tsunami early warning systems. In addition, they need the ability to switch to manually controlled environments in case artificially intelligent systems have to be shut down and to recall faulty smart products.

Contingency plans must go beyond a natural disaster playbook. Given the many potential points of connectivity, it will be much more difficult to predict, identify, and correct the cause of large-scale smart-device failures. Debugging and reprogramming a faulty intelligent device is even more complicated than creating a patch to fight against a malevolent cyberattack, because it can be unclear what rules the machines are following.

As a result, no company will be able to recover on its own. To rebound from the potential impact of a cascading set of global AI-related shocks, managers will have to consider the vulnerabilities that exist everywhere, from their suppliers to their customers. Addressing those vulnerabilities will require coordination across a large number of technology service providers and other companies that could catch or spread an AI infection to others, regardless of who is at fault.

Reducing the risks of more intelligent and interconnected networks will be difficult and costly. We can’t afford not to do it.

AI Insurance Products and Services

Insurers should quantify their exposure to a global intelligent device meltdown, offer new products, and advise companies and governments. Even with about $700 billion in capital available in the United States and hundreds of billions of dollars more around the globe, property and casualty insurers’ balance sheets are too small to cover all the potential losses from a global intelligent device disaster. But insurers can use data collected on losses across industries to advise companies and governments on how best to quantify their potential exposure to a worst-case scenario.

As they have for natural catastrophes, insurers can also encourage public sector safeguards. Since insurers cannot completely mitigate the outsized risks posed by extreme weather events, governments of many developed countries and international organizations provide natural catastrophe relief through government agencies such as the Federal Emergency Management Agency and public flood insurance programs. Insurers need to help mobilize similar public sector resources to help the potential victims of an AI-enabled smart device disaster.

In addition, they can start to advise clients on how they can enhance their safety and security protocols to head off the dangerous repercussions of an intelligent device meltdown. Today, some leading insurers are suggesting security procedures that companies could follow to attend to information breaches and interruptions in the event of a global failure of interconnected systems. But they should also begin to explore steps to address the potential of smart devices becoming even more sophisticated and potentially setting and following their own objectives.

AI International Protocols

Finally, policymakers should establish international trust and ethics guidelines to govern the development and implementation of ever more advanced AI products and systems. To reduce the future impact from natural disasters, governments and international organizations such as the American Red Cross and the World Bank collect and share data concerning the destructive ramifications and the support required to help victims. Similar intelligence will be critical to curb the impact of potential smart device shocks as artificial intelligence evolves and the number of connected IoT devices, sensors and actuators reaches over 46 billion in 2021, according to Juniper Research.

About a dozen governments, technology companies and international organizations such as the Institute of Electrical and Electronics Engineers and the World Economic Forum are starting to explore global AI trust and ethics protocols for retaining control of interconnected AI-driven systems and products. These forums are beginning to deepen understanding of the potential harm that intelligent devices could cause and the need for best practices. But much more has to be done.

Establishing the resources required to reduce the risks that will come with the world’s transition to more intelligent and interconnected networks will be difficult and costly. But we can’t afford not to do it, and our experience responding to some of the world’s worst “100-year storms” offers a valuable starting point for figuring out how to get ahead of potentially even more severe disasters. We just need companies, insurers, and policymakers to recognize that such efforts are an essential investment in our future.

This piece first appeared in Oliver Wyman’s Insurtech blog.

Survey finds that energy security professionals are concerned about 'catastrophic failure' caused by cyber attacks

Continuity Central.Com -

Tripwire, Inc., has announced the results of a survey conducted by Dimensional Research examining industrial control systems (ICS) security in the energy industry. The survey was conducted in March, and its respondents included 151 IT and operational technology (OT) security professionals at energy and oil and gas companies.

New obligation for Spanish companies to disclose their ultimate beneficial owners

Global Compliance News -

On 21 March 2018, the Spanish Ministry of Justice issued Ministerial Order 319/2018 which requires Spanish non-listed companies to disclose their ultimate beneficial owners (“UBO“) to the Companies Registry and keep said information updated. The new UBO reporting measure is motivated by Directive 2015/849 of the European Parliament and of the Council on the prevention of the use of financial system for the purposes of money laundering or terrorist financing (the “Fourth Directive“) which imposes an obligation upon the Members States to hold the beneficial ownership information in a central register and make it available with certain restrictions. Paradoxically, Spain has not yet fully implemented the Fourth Directive.

Starting with the financial statements of year 2017 (which shall be filed with the Companies Registry in 2018), all non-listed companies are obliged to file, together with their annual accounts, a declaration form of beneficial ownership of the company. For these purposes, the UBO is defined as the individual who directly or indirectly owns or controls (i) more than 25% of the share capital of the company; or (ii) has more than 25% of the voting rights of the company; or (iii) through other means exercises direct or indirect control of the management of the company. Only listed companies are exempt from the UBO reporting obligation. Additionally, those companies that have an indirect UBO will need to disclose the information on the legal persons that intervene in the chain of control of the Spanish company. If a company does not have a direct or indirect UBO, it needs to identify in the form the members of its management body. In subsequent years this form will only need to be completed if there have been changes in relation to the previously identified. This UBO reporting obligation aims at improving transparency in (very often) complex ownership structures of legal entities.

The companies’ beneficial ownership information will be made available to competent authorities (including the Financial Intelligent Units), ‘obliged entities’ under the Fourth Directive (for the purpose of performing customer due diligence), and any person or organization that has a legitimate interest. This enhanced public scrutiny should prevent the misuse of legal entities and tax evasion.

The post New obligation for Spanish companies to disclose their ultimate beneficial owners appeared first on Global Compliance News.

Risk Management to Management? Is “Decision Support” the future?

Protecht Risk Management Insights -

Three key treasures of good risk management

The future of “Risk Management” would look brighter if we removed the word “Risk”. It is just “Management”. If “Risk” is “the effect of uncertainty on objectives”, Risk Management must be “managing the effect of uncertainty on objectives”. This is “Outcome Management”.  

Business Management involves making decisions aimed at achieving business objectives. Outcome management is therefore just management.

The future success of risk management relies on making it an integral part of management. This will only happen if risk management provides the right incentives. Humans and hence organisations run by humans, respond to incentives. Read related article: '10 keys to Risk Management Success'.

Psychologists have discovered that when a person is handed an unexpectedly hot cup of coffee, they typically drop the cup if they perceive it to be inexpensive but manage to hang on if they believe the cup is valuable.

CCOs and Compromising Positions

Corruption, Crime & Compliance Blog -

The chief compliances officer is the guardian of a company’s most important intangible asset – its culture.  Everyone at a company is responsible for a company’s culture; the board of directors, CEO, senior executives play an important leadership role and have to exercise responsibility for preserving and promoting a company’s culture.

CCOs, however, are responsible for a company’s ethics and compliance program.  I have regularly advocated for CCOs to focus their work to include oversight, measurement and promotion of the company’s culture.  Like any other aspect of an effective ethics compliance program, CCOs have to add or replace items on its dashboard that are relevant to its culture.

A recent Ethics Resource Initiative survey (Here) confirmed increasing pressure on  employees to circumvent company rules and controls.  No one is surprised by this trend.  Pressure on managers and employees has been increasing for years.    History is replete with instances where CEOs, senior managers, general counsels and others have engaged in misconduct, sometimes as leaders of illegal conduct and other times as willing participants.

There is pressure on corporate actors to generate profits.  The slavish devotion to quarterly financial reporting creates inevitable pressure on senior leaders to cut corners, ignore business ethics and maintain a singular focus on financial reports.  Such a narrow focus inevitably creates an environment in which misconduct is much more likely to occur, corporate scandals are likely to occur and government investigation and prosecutions are a significant risk.

In such an environment, CCOs are likely to face a real professional dilemma.  CCOs will face pressure to compromise their own position as guardian of the company’s culture.  It is in these critical times that CCOs have to speak up, calculate when and where to raise concerns, and how to navigate the corporate governance system to ensure that business ethics and culture are included in any decision-making process.

CCOs face a difficult choice – if they speak up, they may be marginalized; if they keep their mouth shut, they are sacrificing their responsibility to key stakeholders to protect and promote the company’s culture.  Every CCO has faced this quandary – even in ethical companies, CCOs may face these issues.  In the less ethical companies, CCOs may be heard only when senior management believes it is “convenient,” meaning there is no “cost” to the business.

Every CCO has to ask themselves two important questions:

  • Is this an issue that requires me to speak up?
  • If I do not, what are the implications for my role in this company?

Most, if not all, CCOs do not find this situation to be a hard question.  Many CCOs have responded to these situations by speaking with their feet – and leave the company.   It is unfortunate that CCOs are limited to this solution – it is not fair to the company, the CCO and ultimately company shareholders, the real party in interest.

CCOs often face these pressures and sometimes may give in to the pressure based on the reality that perfection in the corporate governance world is impossible to achieve.  But if the CCO does not stand up, who will?  Is it fair for a CCO to always speak as the conscience of the company?

We all hope that CCOs never are put in a compromising situation.  CCOs have a significant burden to carry – they speak for a company’s culture and have to adhere to a company’s values and principles.   If the CCO is compromised, you can rest assured that other C-Suite leaders have embraced circumvention of the company’s ethical culture.

In this case, CCOs may have no option other than to speak up, advocate his/her position, and continue to promote the company’s culture.  If the CCO’s influence is diminished as a result of his/her advocacy, the CCO has to continue to act in accordance with ethical principles.  A CCO has to continue to demonstrate the importance of integrity.  A company that retaliates or compromises integrity may cause the CCO to leave the company.  It is an unfortunate result but it reflects the reality of today’s corporate governance world.

The post CCOs and Compromising Positions appeared first on Corruption, Crime & Compliance.

Scoop – Top Targets of Fed HIPAA Enforcers & Simple Steps to Take Control

Corporate Compliance Insights -

Training Options Duration: 60 Minutes Thursday, May 3, 2018 | 10:00 AM PDT | 01:00 PM EDT Overview: This webinar for HIPAA Covered Entities and Business Associates will identify the top OCR HIPAA enforcement priorities for 2018 and explain simply how you can master HIPAA compliance requirements for each enforcement priority. Why should you Attend: The post Scoop – Top Targets of Fed HIPAA Enforcers & Simple Steps to Take Control appeared first on Corporate Compliance Insights.

(This is only a summary. Click on the headline to view the entire article at Corporate Compliance Insights and participate in the discussion.)

Regulatory Update on Employment Practices Liability Insurance: Risks & Ways to Minimize Risks

Corporate Compliance Insights -

As we enter 2018, what employment practices liabilities threats businesses have to handle? These threats and growing and increasing liabilities can threaten organizations. This will negatively affect their reputation and employment brand and put them down in the competitive market. Therefore, handling the employment practices liabilities (EPL) risk needs a new coordinated and holistic approach. The post Regulatory Update on Employment Practices Liability Insurance: Risks & Ways to Minimize Risks appeared first on Corporate Compliance Insights.

(This is only a summary. Click on the headline to view the entire article at Corporate Compliance Insights and participate in the discussion.)

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