'THE DAILY CORPORATE GOVERNANCE REPORT’ (for public company boards, the C-suite and GCs)

? ? ??Please see the items below with the related links (NOTE: access to link content may be metered, require a no-charge registration or require a paid digital subscription)

? ? ? ? ? ? ? (i)?the rise in the number of COOs at the S&P 500 companies, and in the number of CFOs taking on the dual role of CFO/COO/having the CFO take on the role of interim CEO/McKinsey partner on more CEOs to come from the ranks of the CFO:?

? ? ? ? ? ? ? ? ? ?(a) Below is from the Sept. 18?Fortune?CFO Daily Newsletter, "The COO role is making a comeback—but the twist is that its often finance chiefs taking on the role as ‘CFO plus’ ", inter alia quoting?Moderna?CFO Jamey Mock?on the role of CFO today:

? ? ? ? ? ? ? ? ? ? ? ? "In my talks with CFOs, many tell me how it’s increasingly important for them to understand the operations and inner workings of their company to boost efficiency and growth.?“I consider the role of the CFO much more operational than just the finance department,”?Moderna CFO Jamey Mock told me last week. “I spend as much time with our manufacturing teams, our commercial teams, our research and development teams, and the rest of the functions.”

? ? ? ? ? ? ? ?? ? ? "Companies have recognized that some of what used to be managed by a COO [chief operating officer] has drifted into the CFO’s purview,”?says?Clem Johnson, the president of?Crist Kolder Associates,?an executive search firm.?Some organizations are choosing to give the?“dual title of CFO and COO,?or?president and CFO?in some cases,”?Johnson says. “When we are conducting a search, the casual term used is often ‘CFO plus.'”?

? ? ? ? ? ? ? ? ? ? ?"Jenna Fisher, managing director and head of the CFO practice at the global firm?Russell Reynolds Associates?(RRA), shares what she’s seeing. “Many CFOs are the de facto COO, even without that title,”?Fisher says. “Every company’s definition of what a COO does varies. It really depends on the industry—with manufacturing companies being more likely to have a COO.”?

? ? ? ? ? ? ? ? ? ?"Currently, just 1% of S&P 500 and Fortune 1000 companies have CFOs with the dual title of CFO/COO,?according to RRA. But?the COO role itself, which has gone in and out of popularity over the years,?is on the rise again.?RRA data shows that 39% of S&P 500 companies have a COO......And 42% of Fortune 1000 companies have a COO.?With the increase in popularity,?we may see more CFOs with the dual title soon, according to RRA.?

? ? ? ? ? ? ? ? ? ? "Finance chiefs who have added COO to their title this year include?Block CFO Amrita Ahuja;?Macy’s?CFO Adrian Mitchell;?Abercrombie & Fitch Co. CFO Scott D. Lipesky; and The Children’s Place CFO Sheamus Toal. And other executives joined a company for a CFO/COO role such as Ketchum’s Conor Nash and Sendero Wealth Management’s Kristina G. Craig......

? ? ? ? ? ? ? ? ? ?"COOs are making a comeback”?and the role is?“bigger, bolder, and more transformative than ever,”?recent?McKinsey?research finds.?The role has traditionally?“taken a backseat to other C-suite functions” and “its recent resurgence and increasing visibility showcase the importance of the job in building resilience,”?according to?McKinsey.?Being appointed COO may also be a test for the top job.?“The COO role can be a stepping stone on the way to CEO,”?Fisher says. “So, some companies will put someone in that spot if they see potential for them to ascend into the CEO role in time.”

? ? ? ? ? ? ? ? ?(b) When?BP announced on Sept. 12 the departure of its CEO because of an undisclosed office relationship (see item (iv) from Sept. 13), it also announced that?Murray Auchincloss, its CFO, would act as "CEO on an interim basis."??Below is from the Sept. 19?Fortune?CFO Daily Newsletter ?discussing?the effectiveness of a CFO taking on the role of interim CEO, with reference to this recent transition at BP:

? ? ? ? ? ? ? ? ? ???"Are CFOs effective interim CFOs? It may depend on how strategic they are. One particular example in the spotlight right now is at the British energy giant BP......

? ? ? ? ? ? ? ? ? ???"Are CFOs effective interim CEOs?:?The “strategic CFO” can be an “excellent fiduciary as an interim,”?says Shawn Cole, executive recruiter and president of?Cowen Partners, an executive search firm specializing in the C-suite. “But it really depends on the CFO, how they are viewed by the board, and if they’ve earned the title ‘strategic business partner.’ Many companies still perceive their CFO as ‘chief accountant,’ in which case they may not be considered as interim.”

? ? ? ? ? ? ? ? ? ? ? ? ?“Some industries have seen a CFO step into the role of interim CEO, however, upon completion of the term, stepped back into the role of CFO,”?says Alyse Bodine, global managing partner of the Financial Officers Practice,?Heidrick & Struggles.?Some roles the firm sees being sought after for interim CEO include chief strategy officer, COO, and chief commercial officer, Bodine says......."

? ? ? ? ? ? ? ? ?(c) Below is from today's Fortune CFO Daily Newsletter, "How generative AI is placing CFOs at the forefront of company strategy ", inter alia quoting?Ankur Agrawal, a partner at McKinsey’s corporate strategy and finance practice:?

? ? ? ? ? ? ? ? ? ?"An exciting time to be a CFO:?“I think the chief financial officer is now no longer a financial officer alone,” Agrawal said. “They’re asked to do a lot more. And that’s part of the reason why the digital and technology evolution is so powerful because it allows them to enable the organization to do many things. CFOs are driving and shaping the agenda for companies. I would argue this is a very exciting time to be a CFO.”?He predicts that more CEOs will come from the ranks of CFOs. Along with driving the strategy, data analysis is a strong skill for finance chiefs, Agrawal said. Boards that are looking for CFOs of the future are asking for those skills along with an aptitude for technology, like generative AI, he said......"

? ? ? ? ? ? ? (ii)?'supply chain' expertise in the boardroom?(at Apple, P&G and Colgate-Palmolive): Earlier this month,?executive search firm?Russell Reynolds?posted on its website this client memorandum, "Supply Chains: From Out of Sight To Front and Center on the Board Agenda ." While noting that "supply chain expertise is not required in every boardroom", it adds that companies "should assess whether it belongs in the mix of skills for their industry and specific situation", noting as well the "increased demand for supply chain expertise in consumer organizations’ boardrooms." Below is from the section of the memorandum, "Best in class organizations have operations and supply chain expertise in the boardroom", inter alia with refence to the?supply chain expertise at?Apple, P&G?and?Colgate-Palmolive:

? ? ? ? ? ? ? ? ? ? ? "To understand how the best-in-class supply chain organizations are governed, we assessed the top 10 firms from Gartner’s 2022 Supply Chain Top 25.?Additionally, we examined the five organizations that Gartner lists as “Masters.”

? ? ? ? ? ? ? ? ? ? ? ?"We learned that:

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? --?All 15 of these organizations have explicit operations and/or supply chain expertise in the boardroom?

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? --?60% of these organizations have 4 or more board directors with senior operations and/or supply chain experience

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? --?Nearly all (13 out of 15) have operations and supply chain leaders reporting directly to the CEO or in the C-suite

? ? ? ? ? ? ? ? ? ? ? ? ? ? ?-- The current CEOs of 8 of these 15 organizations have, at some point in their career, worked in a senior operations and/or supply chain role......

? ? ? ? ? ? ? ? ? ? ? ??? ?"Below, we’ll take a more?in depth look into three of these companies:?Apple, Procter & Gamble?(P&G) (both from Gartner’s “Masters” list),?and?Colgate-Palmolive?(ranked #3 in 2022).

? ? ? ? ? ? ? ? ? ? ? ? ? ?? ? --?Apple:?6 out of 9 board members have operations and/or supply chain experience?and the firm has 2 operations executives in the C-suite. Apple’s CEO, Tim Cook, is a prime example of a successful CEO who worked his way to the top through manufacturing, distribution, procurement, supply chain, and operations roles.2

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? --?P&G:?5 out of 11 board members have worked in senior operations, logistics or transportation roles, and 1 member worked as the chief operating officer (COO) and is now the CEO of FedEx. The firm’s COO sits in the C-suite and leads among other functions P&G’s market operations, purchasing, manufacturing, and distribution. The current CEO and board chair also held the COO role prior to taking the top job.3

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? --?Colgate-Palmolive:?7 out of 11 board members have worked in senior operations and/or procurement roles,?and the firm’s chief supply chain officer is part of the C-suite. The current CEO and board chair also held the COO role....."

? ? ? ? ? ? ? ? ? ? Below is from the concluding section of the memorandum, "Recommendations for incorporating supply chain talent into future boards":

? ? ? ? ? ? ? ? ? ? "As the demands on boards become greater, chairs and nomination committees are looking for?T-shaped?directors with deep expertise in at least one domain, as well as an ability to contribute broadly.?Supply chain management is emerging as an area of increased interest and relevance.....

? ? ? ? ? ? ? ? ? ??"Supply chain considerations:

? ? ? ? ? ? ? ? ? ? ? ? ? ?-- Is the supply chain a source of strategic advantage in your industry?

? ? ? ? ? ? ? ? ? ? ? ? ? ?-- Does supply chain complexity warrant governance oversight?

? ? ? ? ? ? ? ? ? ? ? ? ? ?-- Has the supply chain risk profile changed from a business and/or sustainability perspective?

? ? ? ? ? ? ? ? ? ? "Broader board considerations:

? ? ? ? ? ? ? ? ? ? ? ? ? ?-- Does your board have the right mix of backgrounds, skills, and experiences to thrive?

? ? ? ? ? ? ? ? ? ? ? ? ? ?-- Will it remain effective in the future, given anticipated challenges and opportunities?....."

? ? ? ? ? ? ? (iii)?scope 3 emissions 'best practices':?Susan McNichols is a sustainability expert and a senior consultant at one of the world's largest professional services firms,?WSP Global Inc.. She spoke on?"best practices" for Scope 3 emissions?at a session on?Sept. 19?of?Compliance Week’s annual virtual ESG Summit. What she said appears in this Sept. 21?Compliance Week?blog post, "Scope 3 emissions best practices: Be transparent, thorough ", and below are excerpts:

? ? ? ? ? ? ? ? ? ??"You have a lot of influence over your supply chain”?and the GHGs that lead to global warming, Susan McNichols, a senior consultant at engineering and design firm?WSP,?said during a session Tuesday detailing best practices for Scope 3 emissions......

? ? ? ? ? ? ? ? ? ? "The general steps to determining your business’s emissions, according to McNichols, are:

? ? ? ? ? ? ? ? ? ? ??? 1. Identify the emissions;

? ? ? ? ? ? ? ? ? ? ? ? 2. Collect the data;

? ? ? ? ? ? ? ? ? ? ? ? 3. Perform calculations;

? ? ? ? ? ? ? ? ? ? ? ? 4. Verify the data; and

? ? ? ? ? ? ? ? ? ? ? ? 5. Report publicly.

? ? ? ? ? ? ? ? ? ???"The final Scope 1, 2, and 3 figures will be your baseline and what you will use to measure your progress toward reducing your emissions through the years, McNichols said.?Set a measurable reduction target, she said. McNichols recommended companies refer to the Science Based Targets initiative,?a nongovernmental consortium, for help in setting targets aligned with what is needed to keep the Earth below the global warming tipping point.?Calculations can be done using any number of standard multipliers.?The?Environmental Protection Agency ?has a verified multiplier available to businesses, as well as other resources to aid in measuring emissions......

? ? ? ? ? ? ? ? ? ??? "Choose a framework to guide you through the Scope 3 process. It will list?15 categories? of Scope 3 activities;?McNichols recommended going through each category and noting any activities in which your company engages......McNichols advised companies new at Scope 3 calculations use the spend method,?which relies on sales and accounting information and is fairly straightforward.?“Be transparent, so you can create an audit trail,”?she said. Disclose any assumptions you made, the methods used, and sources for data.

? ? ? ? ? ? ? ? ? ? ??"Best practice is to disclose your GHG emissions in your annual financial statements or sustainability report.?It’s also advised to list Scope 3 emissions by category, as well as a grand total, McNichols said."

? ? ? ? ? ? ?(iv)?chief sustainability officer at HanesBrands on the value of COSO's?sustainability reporting?guidance: In March of this year,?COSO released this guidance on internal control over sustainability reporting (ICSR):?see item?(ii) from April 4/23.?Christopher Fox, chief sustainability officer at NYSE-listed, multinational clothing company HanesBrands, along with independent consultant Doug Hileman, spoke about the value of the COSO guidance at?Compliance Week’s annual virtual ESG Summit last week, as reported in this Compliance Week blog post on Tuesday, "Assessing the value of COSO sustainability reporting guidance ." Below are excerpts:

? ? ? ? ? ? ? ? ? "COSO’s internal control over sustainability reporting (ICSR) guidance, released?earlier this year, can help companies incorporate controls, monitoring, and reporting into their sustainability programs......Today, with financial internal controls a broad requirement of many regulators, “everyone is using COSO ICFR,” Hileman said.?The ICSR guidance is a supplement to the financial reporting framework and is one of many sustainability frameworks available globally. It shows businesses how to apply internal controls to a sustainability program. Many companies are already using the ICSR, including the Big Four accounting firms, Hileman said.....

? ? ? ? ? ? ? ? ? "COSO’s ICSR guidance outlines 17 principles of sustainable business reporting,including independent board oversight of the sustainability program, holding people accountable, identifying risks, considering the potential for fraud, and generating information technology controls.?There are differences between financial and sustainability controls. Perhaps the biggest is that financial controls are limited to looking back. Sustainability reporting is prospective as well, with a look ahead to meeting environmental targets.?“It’s a different mentality for reporting and for compliance professionals to understand,” Hileman said. A sustainability program might also rely on qualitative data, not just quantitative, as in financial reporting........

? ? ? ? ? ? ? ? ? "Hanes’s (sustainability) program has matured over time and become more rigorous, Fox said. "Let’s face it, 10 years ago there were no controls” in the sustainability space, he said.?Meeting sustainability requirements is “more of a cross-functional exercise” that includes the procurement, financial, and audit teams, among others, Fox said.?Over the past decade, “We’ve done a lot of work to bring functions in like auditing and financial controls,” he said......"

? ? ? ? ? ? ?? (v)?head of investor sustainability at?British American Tobacco?(BAT)?on his role at BAT and communicating sustainability to investors:?William Houston is head of investor sustainability at BAT, having?switched from IR to the sustainability team last December after?Mike Nightingale, formerly BAT’s head of IR, became the company’s first chief sustainability officer. He spoke last week with?IR Magazine,?and below are excerpts from the?IR Magazine?blog post last Thursday, "‘ESG data is becoming more like financial data,’ says William Houston, BAT’s head of investor sustainability ":

? ? ? ? ? ? ? ? ? ? ?"IR teams today have a strong focus on sustainability. But?should sustainability teams be more focused on IR??That’s the thinking at British American Tobacco (BAT), the FTSE 100 constituent, where William Houston works as head of investor sustainability.?‘The one-liner would be: it’s trying to ensure the sustainability work we do inside BAT delivers what investors require,’?Houston tells?IR Magazine......

? ? ? ? ? ? ? ? ? ? ?"His current role has many similarities to an IR position, but with the tasks replicated for sustainability information. The responsibilities include organizing investor engagement, such as ESG roadshows and capital markets days.?There is also a strong focus on reporting and communications: he owns the sustainability information in the half and full-year results, and offers an investor lens on the ESG content in the annual report.

? ? ? ? ? ? ? ? ? ? "In another parallel with IR,?Houston helps support the overall sustainability strategy.?‘Through the meetings, you learn what investors are particularly focused on,’?he says. ‘And then you can feed that back into the business to help ensure we’re targeting our activities internally on what really matters.’.........

? ? ? ? ? ? ? ? ????? "Houston says it’s hard to generalize about how investors want to receive sustainability information, but the overall direction of travel is for?more?of everything. ‘Generally, we’re seeing more demand for sustainability information, more demand for meetings, more demand for color and context about what we’re doing,’?he says.?Engagements with smaller investors that don’t have their own sustainability teams may still be high level, notes Houston.?At the other end of the spectrum, however, the deeper dives are getting deeper.?‘You’ll have one or two hours on one specific material topic,’?he explains.?‘Clearly, when you’re going to that depth, you change who you bring to the meeting. We’ll have our subject matter experts join. They will have a much more technical interaction to help show the progress we’re making on the topic and how we’re committed to driving change, and try to show leadership in key areas.’

? ? ? ? ? ? ? ? ? ? "Houston says BAT is also trying to be more proactive in how it communicates around sustainability with investors.?‘In the past, potentially, it’s been a little bit more reactive,’ he explains. ‘Again, we’re trying to focus on the material topics that matter most to given investors. We’ve got 11 material topics. Generally, investors will be particularly focused on between one and three of those. And they won’t always be the same from investor to investor. We’re trying to be very mindful of engaging more proactively with investors on the topics that matter most to them.’?

? ? ? ? ? ? ? ? ? ? "Sustainability information is also delivered in a number of different formats. BAT has a databook, thematic reports covering human rights and a 55-slide presentation called ‘What ESG means at BAT’.?The annual report, meanwhile, features an ESG scorecard?that shows all the company’s key material topics, along with related metrics, three-year historical performance (where available) and a color-coded progress indicator.?The overall aim is that?‘everything becomes like financial information,’?says Houston......"

? ? ? ? ? ? ? (vi)?publicly disclosing a?cybersecurity?incident/SEC?filing?of the day: NYSE-listed,?building infrastructure supplier?Johnson Controls International plc?disclosed in this Current Report filed yesterday with the SEC that it had experienced a cybersecurity incident, as follows:

? ? ? ? ? ? ? ? ? ? ?"Johnson Controls International plc has experienced disruptions in portions of its internal information technology infrastructure and applications resulting from a cybersecurity incident.?Promptly after detecting the issue, the Company began an investigation with assistance from leading external cybersecurity experts and is also coordinating with its?insurers. The Company continues to assess what information was impacted and is executing its incident management and protection plan, including implementing remediation measures to mitigate the impact of the incident, and will continue taking additional steps as appropriate.?

? ? ? ? ? ? ? ? ? ? ?"To date, many of the Company’s applications are largely unaffected and remain operational. To the extent possible, and in line with its business continuity plans, the Company implemented workarounds for certain operations to mitigate disruptions and continue servicing its customers. However, the incident has caused, and is expected to continue to cause, disruption to parts of the Company’s business operations. The Company is assessing whether the incident will impact its ability to timely release its fourth quarter and full fiscal year results, as well as the impact to its financial results.?The Company’s investigation and remediation efforts are ongoing."

? ? ? ? ? ? ? ? ? ? ?(For other recent corporate disclosures of cybersecurity incidents, see item (ix) from Sept. 18/23)

? ? ? ? ? ? ? (vii) press release/(other)?SEC filing of the day:

? ? ? ? ? ? ? ? ? ?(a)?Uber Technologies, Inc. announced yesterday in this press release the appointment of a new CFO from outside the company, as follows:

? ? ? ? ? ? ? ? ? ? ? ? "Uber Technologies, Inc. today announced that Prashanth Mahendra-Rajah will join the company as Chief Financial Officer on November 13, 2023.?Mr. Mahendra-Rajah is currently Chief Financial Officer of Analog Devices (ADI). At ADI, he set financial strategy and oversaw the company’s global finance organization, with responsibility for financial management, planning, controls, and reporting.....He....serves on the board of directors of Goodyear Tire & Rubber Company......"

? ? ? ? ? ? ? ? ? ? ? Terms of the Employment Agreement with the new CFO are described in the related Current Report filed with the SEC, as follows:

? ? ? ? ? ? ? ? ? ? ? ? "On September 25, 2023, the Company entered into an employment agreement with Mr. Mahendra-Rajah, which provides that Mr. Mahendra-Rajah’s employment will be at-will. Under the Employment Agreement, Mr. Mahendra-Rajah will be entitled to an annual base salary of $800,000 and will be eligible to participate in the Company’s Executive Bonus Plan. Mr. Mahendra-Rajah will receive a restricted stock unit award of $10,000,000, which is subject to time-based and performance-based vesting conditions, and an option to purchase $4,000,000 of the Company’s common stock, which is subject to a time-based vesting condition. Mr. Mahendra-Rajah also?will receive a signing bonus of $1,000,000. If Mr. Mahendra-Rajah voluntarily resigns or is terminated for Cause (as defined in the Company’s Amended and Restated 2019 Executive Severance Plan) from the Company before the two-year anniversary of his start date, he will be required to repay the full amount of the signing bonus, less 4.17% for each full month of continuous employment with the Company after his start date."

? ? ? ? ? ? ? ? ? ? (b) Nasdaq-listed, information?technology?services and consulting company?Cognizant Technology Solutions Corporation announced today in this press release the appointment of a new CFO from outside the company, as follows:

? ? ? ? ? ? ? ? ? ? ? "Cognizant, one of the world's leading professional services companies, today announced the appointment of?Jatin Dalal?as Chief Financial Officer, with the appointment anticipated to be effective in?December 2023. Dalal will report to Ravi Kumar S, Cognizant's Chief Executive Officer, and oversee, among other responsibilities, Cognizant's worldwide financial planning and analysis, accounting and controllership, tax, treasury and internal audit, corporate development, investor relations and enterprise risk management functions.

?

? ? ? ? ? ? ? ? ? ? ? ? ?"Dalal will succeed?Jan Siegmund, who, as previously disclosed, intends to retire in early 2024. Upon Dalal's assumption of the role of CFO, Siegmund will remain with the Company as a non-executive officer and special advisor to support an orderly transition.?Dalal brings extensive executive-level financial expertise from complex, multinational organizations. He joins Cognizant from Wipro, a publicly traded multinational technology services and consulting company, where he had served as CFO since?April 2015?and assumed additional responsibilities as President beginning in?December 2019......."

? ? ? ? ? ? ? ? ? ? (c) NYSE-listed,?global health company?The Cigna Group?disclosed in this Current Report filed with the SEC earlier this month that, inter alia, its?Chief Administrative Officer and General Counsel was taking the additional responsibility for the Human Resources function, with her base annual salary being increased from $850,000 to $900,000, as follows:

? ? ? ? ? ? ? ? ? ? ? ? "On September 14, 2023, The Cigna Group approved compensation changes for Noelle K. Eder and Nicole S. Jones to reflect expansion of their roles and responsibilities.? Ms. Eder, Executive Vice President, Technology and Operations, now leads the new Technology and Operations function,?and Ms. Jones, Executive Vice President, Chief Administrative Officer and General Counsel, now also has responsibility for the Human Resources function.? In connection with their respective expanded responsibilities, Mss. Eder and Jones received offer letters, the material terms of which are included in the table below.??Mss. Eder and Jones will continue to be eligible to participate in the Company’s employee benefit plans, in accordance with their terms."

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