'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)?chief risk officers?(CROs)?at BMO, Desjardins Group and OMERS on the risk management challenges today/KPMG 2023 survey of?CROs?at the largest U.S, companies:?

? ? ? ? ? ? ? ? (a)?Below is from this?Globe and Mail?article on Friday,?"Chief risk officers have their work cut out for them",?inter alia quoting?Piyush Agrawal,?BMO's CRO;?Antoine Avril,?executive vice-president of risk management at?Desjardins Group; and?Deb Barnes,?CRO?of?OMERS:

? ? ? ? ? ? ? ? ? ? ? ? "Chief risk officers have the hardest jobs on Bay Street.?They are the real reason our banks, insurers and pension funds remain the envy of the world. But being a CRO is often a thankless profession. When they head off danger, they get none of the glory. But when disaster strikes, they get all the blame.....

? ? ? ? ? ? ? ? ? ? ? ? ?"Those unsung heroes deserve their due because of the increasing complexity of risk management. Not only are they troubleshooting financial risks stemming from liquidity,?interest rates?and credit markets, but?they are also mitigating emerging risks that are much harder to quantify.?CROs are finding themselves in the hot seat because financial regulators are paying closer attention to non-financial risks including artificial intelligence,?climate change??crypto and foreign interference......

? ? ? ? ? ? ? ? ? ? ? ??? "This slew of non-financial risks is contributing to increased workloads for CROs and their teams, according to a 2023 Thomson Reuters Regulatory Intelligence report.....There is no shortage of risks, so the independence of risk managers has never been more important, said Piyush Agrawal, who is Bank of Montreal’s CRO.?“There are always in a big organization multiple views on what things might be,”?Mr. Agrawal told delegates at the Global Risk Institute’s annual summit in Toronto.?“But for risk management to have the last word and have the stature to execute on beliefs is very important.”.....

? ? ? ? ? ? ? ? ? ? ? ? ??"Mr. Agrawal also pointed to what he called a?“unique convergence of risks”?that are harder to immediately gauge, such as social-media risk.?“Think about today the frustration between a customer not logging in and the microsecond it takes to go to social media and complain,” he said. “And if you’re an influencer, God help you, right?”

? ? ? ? ? ? ? ? ? ? ???"In addition to numbers and analytics, assessing risk involves having difficult conversations, Deb Barnes,?CRO of the?Ontario Municipal Employees Retirement System,?told attendees at the same conference.?“If we can’t get risk culture right, we can’t enable people to have the tough conversations at the right table with the right individuals. That is one of the biggest risks that an organization faces,”?Ms. Barnes said.?Equally important are having proper escalation channels in place and aligning incentives with behaviours, she added.

? ? ? ? ? ? ? ? ? ? ???"Antoine Avril,?executive vice-president of risk management at?Desjardins Group, said effective risk managers are naturally curious and skeptical thinkers. 'Just go beyond the assumptions – question, ask. And it’s fun. I think it’s how we get better.'......"

? ? ? ? ? ? ? ? ? ?(b) As reported in this?Compliance Week?blog post last Wednesday, "Survey: Risk chiefs feeling pressure from growing compliance mandates",?KPMG?released this month its "2023 Chief Risk Officer Survey",?based on a?survey it conducted from July to September this year of 390 CROs at companies with at least $4 billion in annual sales or $25 billion in assets under management.?Below is from the blog post describing some of the report's findings:

? ? ? ? ? ? ? ? ????? ? ? "Mounting compliance requirements and technological innovations have chief risk officers (CROs) facing more complex risk environments, according to a new report.?A?survey?of 390 CROs conducted by KPMG and Forbes Insight found those in the position feel pressure in five key areas: de-risking, growth and strategy, regulatory compliance, effectiveness and efficiency, and costs......

? ? ? ? ? ? ? ? ? ? ? ? ? ?"The CROs said the risk function within organizations is rapidly expanding beyond traditional risk management and into the area of threat management.?At the same time, they are being asked to cut costs and meet compliance requirements that allow their businesses to grow.?Compliance and regulation were the biggest risk management issues respondents expected to face during the next two to five years.?About 33 percent of CROs said they felt most pressure from regulators and government agencies, while 22 percent cited demands from stakeholders and investors.?

? ? ? ? ? ? ? ? ? ? ? ? ? ?“CROs should ensure that compliance and other risk activities are agile, tech-enabled, strategic, and support business growth while allowing for adaptation to new or evolving regulatory requirements,”?said Brian Hart,?KPMG’s U.S. network leader for financial services risk, regulatory, and compliance.

? ? ? ? ? ? ? ? ? ? ? ? ?? "While 80 percent of CROs said they were confident about their organization’s ability to deal with contemporary cybersecurity threats and data breaches,?53 percent said cybersecurity is a priority risk area to modernize during the next two years......Most cited AI and machine learning (ML) as the most important digital tools for enhancing risk management over the next five years. About 63 percent of companies already use AI and ML in risk management, according to the survey......"

? ? ? ? ? ? ? (ii)?update on climate disclosure in Canada:?new European climate reporting rules to apply to many Canadian companies/comments by the?chair of the?Canadian Securities Administrators?on?the coming climate reporting rules in Canada:??Below is from this?Globe and Mail?article last Wednesday, "Canadian companies swept up in new climate disclosure rules in Europe", inter alia with comments by?Stan Magidson, chair of the?Canadian Securities Administrators?(CSA),?and?Roopa Davé, partner, ESG and climate services at?KPMG, and with reference to this report earlier this month by?Canadian ESG?advisory firm?Millani,?"Millani’s 7th Annual ESG Disclosure Study: A Canadian Perspective" (see item (ii)(b) from Oct. 17):

? ? ? ? ? ? ? ? ??"Europe has ushered in a new era of sustainability reporting for companies, imposing new requirements to provide details about their?impact on the climate?and other environmental and social factors under new rules?that many Canadian corporations will have to adopt.?Last week, the European Union formalized standards that take disclosure beyond climate- and sustainability-related risks affecting corporate prospects. Called the?Corporate Sustainability Reporting Directive,?or?CSRD,?corporations will have to also disclose their effects on the environment and society.?A first group of companies will begin applying the new rules in 2024, and publish reports the following year......

? ? ? ? ? ? ? ? ??? ? ?"An estimated 10,000 corporations from outside the continent, many based in Canada, will have to report if they have met certain criteria.?Among those are listings on regulated EU stock exchanges, sizable operations on the continent or subsidiaries based in EU member countries. The regulation covers both public and private companies.

? ? ? ? ? ? ? ? ? ??"Beyond that,?some Canadian companies are starting to gather data, establish reporting systems and understand legal risks on the assumption that a version of the EU rules could also be adopted in other jurisdictions down the road, said Roopa Davé, partner, ESG and climate services, at?KPMG.?“Our clients are pragmatic in that they understand it’s coming. They want to understand the baseline: Where are we at? What are our gaps and what do we need to get started to get ready for this?”?Ms. Davé said.

? ? ? ? ? ? ? ? ? ???"Expanding disclosure into what is known as double materiality comes as Canada and rest of the world adopt the first two standardized reporting guidelines recently formalized by the International Sustainability Standards Board, or ISSB.?A new?Canadian Sustainability Standards Board?is consulting with industry?and studying how the international standards can be adapted to recognize the country’s heavy reliance on resource-based and export industries......In a recent survey of Canadian ESG disclosure, the Montreal-based consultancy Millani found that 19 per cent of companies listed on the S&P/TSX Composite Index, many of them in resource extraction, conduct double-materiality assessments in some form.?

? ? ? ? ? ? ? ? ? ???"It is not clear if Canadian regulators will force companies and financial institutions to adopt the EU-style requirements.?After an early attempt to set rules for climate-related disclosure stalled, securities commissions are now focused on the international standards, which start to come into effect next year, said Stan Magidson,?chief executive officer of the Alberta Securities Commission and?chair of?Canadian Securities Administrators.

? ? ? ? ? ? ? ? ? ? ?"Rather than European rules,?provincial securities watchdogs are more focused on developments at the U.S. Securities and Exchange Commission,?given how influential it is for the Canadian market, partly because so many companies are listed in both countries.?“When we are thinking about whether or not we would want to adopt ISSB, they have prefaced their instrument on materiality to the issuer and the investor. So that currently is consistent with the view we have at the CSA,” he said......

? ? ? ? ? ? ? ? ? ? ? "Even if it does not become a regulatory requirement in Canada in the near future, double materiality represents best practice and can bolster competitiveness, said Milla Craig, CEO of Millani. It is also an opportunity for companies to highlight positives they are achieving on the sustainability front that may not be reflected in risk reporting....."

? ? ? ? ? ???(iii)?press releases/SEC?filing?of the day:?

? ? ? ? ? ? ? ? ?(a)?Unilever PLC?announced in?this press release?on Thursday?the appointment of a new CFO from inside the company "after a?thorough internal and external search process", as well as "other changes to Unilever's Leadership Executive", as follows:

? ? ? ? ? ? ? ? ? ? ??? "Unilever today announced?Fernando Fernandez as its new Chief Financial Officer after a thorough internal and external search process.?Fernando, currently President of Unilever’s Beauty & Wellbeing Business Group, will replace Graeme Pitkethly, who announced his decision to retire from the company earlier this year. Fernando’s appointment is effective from 1 January 2024, and he will join the Board with effect from this date.....Unilever today also announced other changes to its Unilever Leadership Executive......";

? ? ? ? ? ? ? ? ? (b) Nasdaq-listed,?Internet media, news and entertainment company, Buzzfeed, Inc.,announced last Thursday in this press release?that its CFO was leaving the company "to pursue a new opportunity", to be replaced as CFO by the current V.P., Finance and Treasurer,?as follows:

? ? ? ? ? ? ? ? ? ? ? "BuzzFeed, Inc. today announced that its Chief Financial Officer, (“CFO”) Felicia DellaFortuna, will be leaving the company before the end of November to pursue a new opportunity. Matt Omer, currently Executive Vice President of Finance and Treasurer, was appointed by the Company’s Board of Directors as the next CFO and will succeed DellaFortuna on November 6, 2023.?Omer has been at BuzzFeed since 2019, leading Finance and Treasury......DellaFortuna joined BuzzFeed in 2015 as Senior Director of Finance, and has been the Company’s CFO since February 2020......"

? ? ? ? ? ? ? ? ? ? ? ?In connection with the appointment of the new CFO, they entered into an Offer Letter, the terms of which are summarized in the related Current Report filed with the SEC.

? ? ? ? ? ? ? ? (c) Last Wednesday,?Morgan Stanley?announced in?this press release?that?Co-President Edward (Ted) Pick would become CEO effective January 1, 2024.?with Co-President Andy Saperstein becoming Head of Wealth and Investment Management, and Dan Simkowitz to be Co-President and the Head of Institutional Securities (see item (v) from last Thursday).?As reported in this WSJ article, "Morgan Stanley Awards Next CEO, Other Candidates Awards Valued at $20 Million", last Friday Morgan Stanley disclosed in this Current Report filed with the SEC that the?Compensation, Management Development and Succession Committee of the Board,?in consultation with the company's independent compensation consultant, had?approved a "one-time staking award to each of Mr. Pick, Mr. Saperstein and Mr. Simkowitz", as follows:?

? ? ? ? ? ? ? ? ? ? "On October 25, 2023, in consultation with its independent compensation consultant, the Compensation, Management Development and Succession Committee of the Board approved a one-time staking award to each of Mr. Pick, Mr. Saperstein and Mr. Simkowitz.?The Committee determined that granting the Awards to each of our incoming Chief Executive Officer and Co-Presidents is in the best interests of the Company and its shareholders as the Company transitions from 14 years of exceptional leadership by Mr. Gorman.?The Committee granted the Awards in acknowledgment of the Board’s assessment of the criticality to the continued success of Morgan Stanley of ensuring that each executive continues their outstanding leadership in their new roles at the Company....."

? ? ? ? ? ? ? ? ? ?Terms of the stock awards are summarized in the said Current Report;

? ? ? ? ? ? ? ?(d) Teck Resources Limited announced today in this press release that its President and COO was retiring, with the CEO to assume the role of President and CEO, as follows:

? ? ? ? ? ? ? ? ? ? "Teck Resources Limited today announced that Harry “Red” Conger will retire as President and Chief Operating Officer and step down from Teck’s board of directors, effective November 1, 2023.?Red joined Teck in September 2020 as Executive Vice President and COO and was appointed President and COO in September 2022.....CEO Jonathan Price will assume the role of President and CEO, and a search will be conducted to fill the COO role."

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