ESG Losing Steam; Shareholders Back Kohl’s Board, Await Deal
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ESG investing has become ubiquitous in recent years, but its rise in popularity has also attracted a growing number of prominent critics. Former Vice President Mike Pence is among those voices, calling to “rein in” environmental, social and governance factors in decision-making by businesses.
Investors Peter Thiel and Bill Ackman are backing the financial firm Strive, which is urging companies to steer clear of political issues. Even some of the most staunch advocates of ESG investing are re-evaluating shareholder initiatives when it comes to climate change amid a changing geopolitical landscape for energy. BlackRock, the world’s largest asset manager, has said it will vote against more climate resolutions this year because they are too “extreme” or “prescriptive”.
This shift from BlackRock is noteworthy considering the influence of its CEO Larry Fink’s Annual Letter to CEOs in 2020, which asserted “climate risk is investment risk.”
In activism news, Scott Deveau of Bloomberg reports that Wisconsin-based retailer Kohl’s defeated Macellum Capital Management in the investor’s attempt to overhaul the department store’s board the same day that Kohl's neighbors Milwaukee Bucks snatched a victory from the Boston Celtics in game 5 of the Eastern Conference semifinals. Macellum, along with other activists, have advocated over the past two years for the company to overhaul its board or sell itself. Kohl’s was successful because the board effectively put the company up for sale and took the wind out of Macellum’s sails despite losing ISS.
Last night, GPP put down iPhones and laptops and held a special team dinner with colleagues from San Francisco and New York in support of a cause dear to our hearts—Cookies for Kids’ Cancer. We want to extend our deepest admiration and thanks to Gretchen Holt Witt, Co-Founder of Cookies for Kids’ Cancer, who through her sheer will created a leading organization to fund pediatric cancer research in honor of her late son Liam; and big thank yous to Peasant and its owner and Chef Marc Forgione for hosting us and donating the amazing meal; and Skurnik Wines and David Skurnik for donating the array of Italian wines. Please visit the charity’s website to learn more about the work they do to support life-saving pediatric cancer research and how you can join the effort.
Have a great weekend,
The GPP Team
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Bloomberg: Pence Rips Socially Minded Investing, Wants to ‘Rein In’ ESG
Former Vice President Mike Pence criticized investor-activist campaigns to force companies such as Exxon Mobil Corp. to follow socially conscious investing principles. Read More
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DealBook: The Pushback on E.S.G. Investing
Calls to rein in investing based on environmental and social principles are growing louder. Read More
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Financial Times: BlackRock Warns It Will Vote Against More Climate Resolutions This Year
BlackRock has warned that it will not support most shareholder resolutions on climate change this year because they have become too extreme or too prescriptive. Read More
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Bloomberg: Kohl’s Fends Off Activist Macellum’s Bid to Overhaul Board
Activist investor Macellum Capital Management’s bid to overhaul the board of Kohl’s Corp. was rejected by investors on Wednesday. Read More
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CNBC: Kohl’s Shareholders Vote to Keep Current Slate of Directors Despite Activist Pressure
Kohl’s shareholders voted to reelect the company’s current slate of 13 board directors, as the retailer faced mounting pressure from activists for an overhaul, Kohl’s announced Wednesday. Read More
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Wall Street Journal: Kohl’s Proxy Fight Victory Is Only the Beginning
A bitter campaign and a poison pill later, Kohl’s has emerged the victor in the proxy fight against an activist investor. Read More
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Bloomberg: Musk Declares $44 Billion Twitter Takeover ‘On Hold’
Elon Musk tweeted that his $44 billion takeover of Twitter Inc. is “temporarily on hold” until the billionaire receives more information about the proportion of fake accounts, sending the social media giant into a tailspin. Read More
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The Information: Combative FTC Could Complicate Homestretch of Musk’s Twitter Deal
When Elon Musk first tried to buy Twitter, the social media app’s executives tried to rebuff him. Now they just want the deal done. Read More
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The Deal: Activist Investing Today: Alexander Talks Stakeholders and Twitter
The Shareholder Commons advocate suggests investors should demand that the social media giant set up an independent trust or become a PBC to ensure healthy discourse. Listen Here
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Breakingviews: Twitter Board Is Dangling Over Hot Water
Twitter’s investors are worried about Elon Musk’s $44 billion takeover. The social media company’s shares fell 4% on Monday after a research report by a short-selling firm highlighted risks to the deal. Read More
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Columbia Law School's Blog on Corporations and Capital Markets: The Twitter Board Bears Personal Responsibility for a Bad Outcome in the Twitter Sale
Let’s be clear about this: The Twitter board was under no legal compulsion to accept Elon Musk’s offer for the company and, from a corporate governance structural point of view, was in an unassailable position until the 2024 shareholders meeting. Read More
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Bloomberg: Southwest Gas Rises After Reaching Deal With Icahn to Oust CEO
Southwest Gas Holdings Inc. shares edged higher after reaching a deal with Carl Icahn to replace the utility’s chief executive officer and allow the billionaire activist to name up to four directors to the board. Read More
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Bloomberg: U.S. Foods CEO Satriano to Step Down in Sachem Head Settlement
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Stanford Graduate School of Business: Masterclass on Effective Corporate Governance
From what structures make sense to employ, and when you should use them, Alexey Volynets of International Finance Corporation provides advice and insights on how corporate governance can be a powerful tool in business. Listen Here
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Wharton Business Daily: Why More Companies Are Standing Up on Social Issues
Wharton management professor Stephanie Creary explains why silence is no longer golden for firms. Listen Here
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Harvard Law School Forum on Corporate Governance: How to Identify Top ESG Priorities
Though integrating ESG goals into the existing compensation program may seem like the obvious next step, there are several processes that board members need to implement first—and critical questions that they need to address—to ensure the new compensation structure is appropriately tied to corporate strategy. Read More
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Social Science Research Network: Does Enlightened Shareholder Value Add Value?
Unlike shareholder value maximization (SV), which merely calls on corporate leaders to maximize shareholder value, enlightened shareholder value (ESV) combines this prescription with guidance to consider stakeholder interests in the pursuit of long-term shareholder value maximization. Read More
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The World Economic Forum Annual Meeting 2022 convenes at the most consequential geopolitical and geo-economic moment of the past three decades and against the backdrop of a once-in-a-century pandemic. The meeting will bring together over 2,000 leaders and experts from around the world in Davos-Klosters, Switzerland.
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The Program on Corporate Governance seeks to foster research and scholarship about corporate governance and facilitate discourse in this field among academics, practitioners, and policy-makers.
Harvard's next in-person roundtable will include a keynote and Q&A session with Renee Jones, Director of the U.S. Securities and Exchange Commission’s Division of Corporate Finance.
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The conference will give you information on what others are doing and the best practices for things like: how to collect and report ESG data, how to conduct your virtual or in person annual meeting, how to disclose risk factors on the Ukraine war or cybersecurity threats, or how to orient new directors, to name a few.
A sample of breakout topics for companies of all sizes include, SEC update, ESG, the modern workplace, proxy updates, 10b-5 trading plans, technology, Ethics, activism and diversity.
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