Key Governance Developments - February 2020

Credit Suisse CEO forced out over surveillance of executives

Credit Suisse CEO Tidjane Thiam has resigned after losing a boardroom battle over surveillance of senior executives that was first revealed in September and will be replaced this week by the head of the bank’s Swiss business, Thomas Gottstein. Thiam had been under mounting pressure in the wake of reports about the bank's surveillance of executives, including departing wealth head Iqbal Khan, as well as spying on Greenpeace after activists from the environmental organisation disrupted the group's shareholders’ meeting. David Herro, chief investment officer of Harris Associates, a major investor in Credit Suisse which had publicly backed Thiam, has led calls for the resignation of chairman Urs Rohner to give the bank a fresh start.

Best source: Financial Times (subscription required)

See also: The Telegraph (subscription required)

See also: Le Temps (subscription required, in French)

See also: The Guardian


Siemens CEO clashes with investors and protestors over coal contract

Siemens CEO Joe Kaeser says he has sympathy with environmental activists protesting about the group's involvement in an Australian coal-mining project, but is not prepared to cancel the €18m contract to supply rail signalling equipment to Indian company Adani Group. Protestors attended the company’s annual general meeting, at which institutional investors also raised concerns. BlackRock’s Investment Stewardship team says Siemens faces risks with the project, and needs to do more to assess environmental, social responsibility and governance issues arising from its activities in the future. Under the contract signed last year, Siemens will provide signals technology for a railway line to transport coal from a remote mine in Queensland.

Best source: Citywire Selector

See also: Reuters 

UK fund manager takes aim at combination of CEO and chairman roles

Director of investment stewardship Sacha Sadan says Legal & General Investment Management will vote against proposals by listed companies worldwide to combine the chief executive and chairman roles, an issue that the asset manager says is most pressing in the US, France and Spain. LGIM will also vote against board membership resolutions at Topix 100 listed companies in Japan that do not have at least one woman board member, and against US S&P 500 and Canadian listed companies with less than 25% women on their boards. Sadan says the firm is not taking a position on the individuals involved but believes separating the roles is in the best long-term interests of companies and investors.

Best source: City A.M.

See also: Reuters 


ECB urges banks to improve internal governance

European banks need to improve the effectiveness of their management bodies and strengthen internal controls, the European Central Bank says in a report on its annual Supervisory Review and Evaluation Process. Banks' scores for internal governance, business models and conduct risk have declined significantly, according to the report, and the ECB says it is concerned about weak management boards and inadequate outsourcing controls.

Best source: Loyens & Loeff 


Former BBVA chairman knew about corporate espionage case: anti-corruption agency

Spain's Fiscalía Anticorrupción agency has accused BBVA’s former president, Francisco González, of being directly involved in the alleged corporate espionage case in which the bank hired former police agent José Manuel Villarejo to spy on executives at construction company Sacyr in 2004. Despite his denial, the agency says González would have known of the contract with Villarejo’s company.

Best source: El País (in Spanish)