Key Governance Developments - February 2024

EU member states’ deadlock results in postponement of Corporate Sustainability Due Diligence Directive vote
The EU Council's Belgian presidency has decided to withdraw a vote planned for February 9 on the proposed Corporate Sustainability Due Diligence Directive after it became apparent that ambassadors from Germany and probably Italy would abstain amid growing pressure from their countries' business sectors. Berlin's decision to abstain, flagged more than a week before the planned vote, was blamed on opposition from the pro-business Free Democrat Party, one of the three that make up the federal coalition. If Germany abstained, Italy and Austria were set to follow suit, threatening the qualified majority needed to approve the proposal. Business groups say the requirement to conduct human rights and environmental due diligence on companies in their supply chain will impose an unjustified burden on companies, especially smaller ones. The Belgian presidency says the vote will be held later, but no date has been set.

Best source: Reuters (free registration)
See also: Euractiv

ExxonMobil seeks to continue court case against activists despite withdrawal of AGM resolution on emission reductions
ExxonMobil has asked for a case it brought against activist investors to continue, even though Arjuna Capital and Follow This have withdrawn the shareholder resolution calling on the oil and gas company to set out a strategy for reducing its emissions. Amid concern that ExxonMobil’s lawsuit could silence critics including climate change advocates, the company says the case should be heard in order to resolve important issues relating to Securities and Exchange Commission rules on shareholder resolutions as well as the true motivations underlying activists' climate-related resolutions. Critics say the company is looking to establish a legal precedent enabling it to block shareholder pressure on decarbonisation as well as to land activists with heavy court costs.

Best source: Reuters (free registration)
See also: Financial Times (subscription required)

UK authorities accused of failing to act against senior executives over corporate misconduct
The UK Serious Fraud Office and Financial Conduct Authority are failing to take action against senior executives in cases of corporate misconduct, according to a report by campaign group Spotlight on Corruption. The financial regulator issued £4.1bn in fines against 139 companies between 2013 and 2022, but only 30 individuals were penalised, including just eight from large companies. No individuals were convicted.

Best source: City A.M.

Julius Bär CEO forced out as losses on private credit lead to 52% drop in 2023 profit
Julius Bär CEO Philipp Rickenbacher is stepping down with immediate effect after the Swiss bank reported a 52% drop in its profit for last year to CHF454m from CHF950m in 2022. The bank has written off its CHF606m exposure to stricken Austrian property group Signa, to which Julius Bär is one of the biggest lenders. Julius Bär says the five executive board members involved in credit decisions will lose their 2023 bonuses while other senior managers will have their variable remuneration reduced significantly. Rickenbacher’s deputy and chief operating officer, Nic Dreckmann, has been appointed interim CEO until a permanent successor is appointed. Julius Bär has announced that it is exiting the private debt business in the wake of its losses from Signa.

Best source: Le Temps (subscription required, in French)
See also: Financial Times (subscription required)
See also: Bloomberg (subscription required)

EFG International shrinks executive committee to enhance governance structure
Swiss private bank EFG International has reduced the size of its executive committee from 13 members to six as part of moves to streamline its governance. The bank will establish a new global business committee with 13 members, including regional heads, and combine its two divisions in Switzerland from July 1.

Best source: Reuters (free registration)

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