Daily Media Briefing

Daily Media Briefing

 

Posted in: Daily Media Briefing, Diversity, Employees, Ethics, Governance, Sustainable Investment, Technology & Innovation

Top Stories

May 16, 2019

Governance

Ethical lapses are more than ever the reason for corporate chief dismissals

Ethical lapses, rather than financial performance or boardroom struggles, were a greater reason for corporate leader dismissals last year than ever before, an annual study of the world’s biggest companies showed. The PwC report found that 39 percent of chief executives were dismissed for what it calls “ethical lapses”, defined as being the result of a scandal or improper conduct by the CEOs or other employees. This is an increase from 26 percent in 2017. Examples of ethical lapses include fraud, bribery, insider trading, environmental disasters, inflated CVs and sexual indiscretions. Chief executive turnover hit a record 17.5 percent in 2018. This was higher than the 14.5 percent rate in 2017 and above what has been the norm for the past decade, the study showed. Among the study’s other findings were that fewer women were promoted to chief executive last year, with the share of incoming female chief executives at 4.9 percent, compared with 2017’s record 6 percent. (Financial Times)*

Sustainable Investment

CFA UK to introduce ESG investing qualification

CFA UK, a membership body for investment professionals, is set to launch a new qualification in ESG investing for investment professionals later this year. The move has been recognised and supported by the Principles for Responsible Investment (PRI). The new ‘Certificate in ESG Investing’ will be the first formal qualification on ESG investing available sector-wide to investment professionals in the UK. The qualification, which is designed for investment professionals in all roles, sets out the fundamentals for ESG investing and aims to equip professionals with the skills and knowledge to integrate ESG issues into their day-to-day work. A pilot exam with professionals from firms including HSBC and Vanguard is scheduled to take place in early September. The first official open sitting of the exam will be available from 1st December this year. The launch of the qualification is a response to the surge of interest in ESG investing over the past few years. (Business Green)*

Digital Ethics

San Francisco bans agency use of facial-recognition tech

The San Francisco Board of Supervisors voted this week to ban the use of facial recognition by city agencies, a first-of-its-kind measure. San Francisco’s ban covers government agencies, including the city police and county sheriff’s department, but doesn’t affect technology that unlocks smartphones or cameras installed by businesses or individuals. The measure will require agencies to gain approval from the Board before purchasing surveillance technology and publicly disclose its intended use. Facial-recognition technology has been used by law enforcement to spot fraud and identify suspects, but critics say that recent advances in AI have transformed the technology into a dangerous tool that enables real-time surveillance. Studies by researchers at MIT and Georgetown have found that the technology has racial biases, which could perpetuate those already pervasive in law enforcement. Elsewhere in the US, President Donald Trump has declared a national emergency on the security risk posed by certain technologies. The decision is largely  focused on the alleged risks of5G networks developed by Chinese telecoms company Huawei. (Wired; BBC)

Gender

Chile’s Government creates a list of female candidates to spur increased Board diversity

The Chilean government has produced a list of 136 female board candidates, in response to claims by corporate executives that they are unable to find enough women to diversify their boardrooms. Following this, Bloomberg has announced that the annual round of shareholder meetings ended last month with four more women among the more than 250 directors in the benchmark IPSA index. Still, this progress equates to women making up just 9 percent of people on boards at the corporations, a slight improvement from 7.8 percent last year. Luis Hernan Cubillos, a partner at the recruitment firm Egon Zehnder International, said male-heavy boards have “become an issue and it will probably have a cost for companies” as investors increasingly look for gender parity when deciding which stocks to hold. Chile boasts better numbers than many South American countries, but activists and some Government officials are frustrated that the region’s wealthiest nation hasn’t made more progress. (Bloomberg)*

Employees

John Lewis removes link to final salary in staff pension scheme

UK retailer John Lewis is removing any link to final salary in its pension scheme in a bid to save £80 million annually. This latest cut to benefits at the staff-owned retail group, which has been seen as offering the gold standard in employment terms, comes after it reduced its annual staff bonus to the lowest level in 66 years after profits dived. Until now, John Lewis has been one of only a handful of UK businesses still offering a link to final salary in its pension scheme, matching staff contributions of up to 4.5 percent for all workers. Staff working at least five years for the company were also assured pension payments of 1/120th of their final salary for every year worked without having to make any contribution. John Lewis, which has faced increasing financial difficulties on the high street, said the redesigned scheme would also mean a more equal distribution of profits among its workers. Major retailers including Morrisons and Tesco closed their defined benefit schemes several years ago. (The Guardian)

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Image Source: Security Cameras by futureatlas.com on Flickr. CC BY 2.0

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