'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) JP Morgan CEO Jamie Dimon on DEI: JPMorgan CEO Jamie Dimon spoke at an event hosted by the Female Quotient?at the recent World Economic Forum, and he is quoted on, inter alia, DEI in this Fortune?article last Wednesday, "JPMorgan’s Jamie Dimon talks DEI: ‘I’m a full-throated, red-blooded, patriotic, unwoke, capitalist CEO’:

? ? ? ? ? ? ? ? ? “I’m going to start by telling you that I’m a full-throated, red-blooded, patriotic, unwoke, capitalist CEO,” JPMorgan CEO Jamie Dimon said to laughter at an event hosted by the Female Quotient at the World Economic Forum last week. “I’m not woke anything,” he emphasized. Still, the bank.....isn’t retreating from its diversity efforts despite the?“ridiculous ESG, DEI groups coming at us,” Dimon said.?

? ? ? ? ? ? ? ? ?"Though?he acknowledged the Supreme Court’s revocation of affirmative action as a must-heed edict, stating, “They spoke, we’ll salute, we’re going to follow the law,”?the firm still plans to reach out to marginalized communities, though it will have to modify its processes around racial and gender quotas to remain compliant. Otherwise, little will change in regard to DEI programs, Dimon said, while simultaneously chastising how some diversity initiatives are run. “The thing about these programs is that some work and some don’t. Some companies just give it lip service.”

? ? ? ? ? ? ? ? ? "JPMorgan’s DEI approach mimics that of any other line of business, requiring that its leads are fanatic about the details, facts, and analysis, Dimon said, stressing.....“Your heart can be in the right place, but if you don’t really think about the execution stuff, you’re gonna fail.”

? ? ? ? ? ? ? ? ? "The CEO, who has steered the world’s most valuable bank for 18 years now, hearkened back to his earlier days with an anecdote. He recalled JPMorgan’s HR department bragging some years ago about the firm’s diversity progress, but fusing all underrepresented groups.?(Think: women, Blacks, LGBTQ, Muslims.) He responded, 'Don’t lump it together. Come back and show me the numbers by VPs, EDs [executive directors], MDs [managing directors], and hiring and retention.'......"

? ? ? ? ? ? ? (ii) RTO policy at BofA (and at some of the other Wall Street banks): As a follow-up to item (i) from last Tuesday, note this FT article last Wednesday, "Bank of America warns return-to-office laggards with ‘letters of education’":

? ? ? ? ? ? ? ? ? "Bank of America?has sent “letters of education” to employees who have not been showing up at the office, warning them of disciplinary action, in the latest move from a large company to push staff back to the workplace. One of the messages said its recipient had failed to meet the bank’s “Workplace Excellence Guidelines” for work location “despite requests and reminders to do so”. “Failure to follow the workplace excellence expectations applicable to your role within two weeks of the date of this notification may result in further disciplinary action,” according to the text of?the letter that a BofA employee posted online. A bank spokesperson said the text was consistent with the warning letters that have been sent, without verifying their exact contents.......

? ? ? ? ? ? ? ? ? ?"JPMorgan Chase,?the largest US bank by assets, last April began requiring all senior managers to be in the office five days a week, up from three. The bank declined to comment.?

? ? ? ? ? ? ? ? ? "Citigroup?last summer sent a notice to its UK employees that it would begin tracking office visits, as well as enforcing its attendance requirement, which is three days a week for nearly all employees. “We remain committed to our hybrid work model,”?said a Citi spokesperson.?

? ? ? ? ? ? ? ? ? ?"Goldman Sachs, which was earlier than most banks in requiring employees to return to the office in 2021, said attendance from Monday to Thursday had returned to pre-pandemic levels while it was still lower on Fridays.....

? ? ? ? ? ? ? ? ? ?"BofA issues letters of education to employees for a variety of workplace issues, and began using them to address office attendance concerns last autumn....."

? ? ? ? ? ? ? ?(iii) ESG roundup: analysis?finds best-managed companies integrate ESG into their businesses/more criticism of ESG ratings and Norway's SWF posts its views on ESG ratings/fix 'ESG' by changing its name?:?

? ? ? ? ? ? ? ? ?(a) Below are the opening paragraphs of this WSJ article last Thursday, "Forget the Term ‘ESG.’ But Don’t Ignore the Power of the Concept" (subtitled: "The best-managed companies are integrating ESG considerations into their businesses, data show"):

? ? ? ? ? ? ? ? ? ? ??"Executives who consider environmental, social and corporate-governance criteria have been under attack lately, accused by critics of practicing “socialism,” or trying to act “woke.” But our latest analysis, based on a gauge of corporate effectiveness from the Drucker Institute at Claremont Graduate University, suggests that those who are integrating ESG considerations into their business are guilty of nothing more than good management.

? ? ? ? ? ? ? ? ? ? ? ? "The institute’s model, which is rooted in the core principles of the late management scholar Peter Drucker,?measures how companies fare across five areas through standardized scores?with a typical range of 0 to 100 and a mean of 50: customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength. Those categories are then rolled up into a cumulative score that captures overall effectiveness—defined by Drucker as “doing the right things well.”

? ? ? ? ? ? ? ? ? ? ? ? "The results underpin the Management Top 250, an?annual ranking produced in partnership with The Wall Street Journal.?The 2023 list?published in December, was drawn from a total universe of 794 companies that we evaluated through the lens of 34 separate indicators....

? ? ? ? ? ? ? ? ? ? ? ? ? "The power of ESG:?In our latest research, we took a look at the 50 biggest gainers in overall effectiveness since 2018, among a group of 442 companies for which we have data going back that far, to determine what had propelled their scores higher.?For the 50 biggest gainers, the leading factor in their rise was the social responsibility category, which is made up of metrics from several ESG ratings providers......."

? ? ? ? ? ? ? ? ? ? ? (b) As noted in several recent past items, there has been much criticism of ESG ratings, inter alia pointing to the inconsistency of the ESG scores as calculated by the different major ESG ratings providers (see, for example, item (vi) from Sept.14/23). Note this further criticism of ESG ratings in this FT article last Friday, "What is the point of ESG ratings?" Note also that on Jan.16, Norway's SWF, Norges Bank Investment Management, the world’s largest investor, posted on its website it's [https://the world’s largest investor]view on ESG ratings, as discussed in this Governance Intelligence blog post last Thursday, "Norway’s SWF calls for greater transparency around ESG ratings":

? ? ? ? ? ? ? ? ? ? ? ? ?"The world’s largest investor, Norges Bank Investment Management (NBIM), has called for greater transparency and governance when it comes to ESG ratings.?The investment management giant acknowledges that while ESG ratings play a critical role in guiding investment decisions, risk monitoring and stewardship activities, the lack of disclosure regarding methodology, data sources and estimation surrounding the rating can be off-putting.

? ? ? ? ? ? ? ? ? ? ? ? ? ?"We are a user of ESG ratings and have an interest in a well-functioning global ESG data market. As an investor, we need information on companies’ exposure to sustainability risks and opportunities, how these are managed, and relevant performance metrics,’ NBIM says......‘Better transparency around ESG ratings could enhance pricing efficiency and [promote] well-functioning markets. We welcome steps toward regulation and encourage harmonization of policy initiatives,’ NBIM adds."

? ? ? ? ? ? ? ? ? (c) Below is from this Bloomberg piece yesterday, "How to Fix ‘ESG’ by Changing Its Name":

? ? ? ? ? ? ? ? ? ? ??"As ESG comes under fire for yet another year,?a Morgan Stanley banker-turned-finance professor said it’s finally time to get rid of those deeply divisive three letters. The ESG moniker has become so politicized that it now prevents clear-headed thinking, said Alex Edmans, who teaches at London Business School. He’s instead proposing the term “rational sustainability.”?It may be bland, he said, but sustainability is about producing long-term value—and that’s hard to politicize.

? ? ? ? ? ? ? ? ? ?"Advocates and critics have become so caught up in cheerleading and criticizing ESG, or scoring points against the other side, that they’ve lost sight of the shared goal to create long-term value,” he wrote in?a Jan. 20 paper.?He said it’s time to get back to basics and closer to the original intent of those United Nations officials who created the?environmental, social and governance?movement roughly two decades ago.

? ? ? ? ? ? ? ? ??? "Rational sustainability” considers all factors that create value, regardless of whether they fall under the ESG label, Edmans said. It discounts ESG factors that aren’t material,?it’s grounded on evidence and analysis and it focuses on ultimately determining which companies are truly sustainable, he said. In effect, it guards against being caught up in “irrational sustainability bubbles,” Edmans said......

? ? ? ? ? ? ? ? ? ?"The fact is ESG is “under attack from all sides,” Edmans wrote. ESG started off with much promise and good intentions, but failed because of?“true believers implementing it naively, ardent adversaries opposing it blindly and opportunists exploiting it for self-interest,” he said.....In his paper, Edmans lays out 10 reasons for using the term rational sustainability. They include its focus on the long term and its emphasis on outcomes rather than labels. Rational sustainability is “about value creation, not politics,” he wrote. It shouldn’t be controversial for anyone regardless of their job titles, political leaning or age, Edmans said.?By contrast, ESG is currently perceived as being of interest only to ESG executives, those on the political left and younger people, he said....."

? ? ? ? ? ? ? ?(iv) Bloomberg with latest data on board diversity at the S&P 500 companies: Below is from this Bloomberg article last Tuesday, "Women’s Boardroom Gains Keep Them Decade Away From Parity":

? ? ? ? ? ? ? ? ? ?"Women keep reaching new highs in America’s boardroom — but they’re still a decade away from reaching parity.?While women occupied a record 33.5% of S&P 500 companies’ board seats at the end of last year, the ratio was 50-50 or more at just 29 companies, according to data compiled by?Bloomberg.?At the current pace, the gender ratio won’t reach parity until 2032 as last year’s gains were below the pace set in 2019 and 2020, when boards responded to heightened activist pressure by adding more women and people of color......

? ? ? ? ? ? ? ? ??"Intercontinental Exchange Inc., owner of the New York Stock Exchange, Hasbro Inc.,?Paramount Global,?American Water Works Co. and Omnicom Group Inc.?are the S&P 500 companies with female representation of at least 60% on their boards, according to the Bloomberg data.....The average number of female directors was unchanged at 3.7, out of an average board size of 11.1......."

? ? ? ? ? ? ? (v) biodiversity reporting: GRI publishes a major update to its 'Biodiversity Standard': As reported in this Accounting Today blog post last Thursday,?"GRI issues biodiversity standard",?the Global Reporting Initiative (GRI) published last Thursday this major update to its Biodiversity Standard, "GRI 101: Biodiversity 2024", described in its press release?announcing the updated standard, as follows:

? ? ? ? ? ? ? ? ? "As nature faces unprecedented pressures, with human activity the leading cause for one million animal and plant species being pushed to the brink of extinction,?GRI has today published a major update to its Biodiversity Standard.?Setting a new global benchmark in accountability for biodiversity impacts, GRI 101: Biodiversity 2024 supports organizations around the world to comprehensively disclose their most significant impacts on biodiversity, throughout their operations and value chain.

? ? ? ? ? ? ? ? ? ? ? "Enabling companies to meet growing demands from multiple stakeholders for information on biodiversity impacts, the GRI Biodiversity Standard delivers: ..... The revised GRI Standard builds on key global developments in the biodiversity field, such as the UN Kunming-Montreal Global Biodiversity Framework (GBF), the Science Based Target Network (SBTN) and the Taskforce on Nature-related Financial Disclosures (TNFD)...."

? ? ? ? ? ? ? ? ?Below is from the Accounting Today blog post:

? ? ? ? ? ? ? ???"The Global Reporting Initiative published a major update Thursday to its biodiversity standard?for organizations to disclose their most significant impacts on the number of plant and animal species throughout their operations and supply chain. The standard replaces one from 2016.....

? ? ? ? ? ? ? ? ? "The GRI Biodiversity Standard aims to provide transparency across the supply chain,?where some of the most significant impacts on biodiversity can go under reported. Location-specific reporting on impacts includes countries and jurisdictions, with detailed information on the place and size of operational sites. The updated standard includes new disclosures on the direct drivers of biodiversity loss covering land use, climate change, overexploitation, pollution and invasive species. It also includes requirements for reporting impacts on society, including those on communities and indigenous peoples, and how organizations engage with local groups? in the restoration of affected ecosystems.

? ? ? ? ? ? ? ? ?"The arrival of the updated standard comes as the International Sustainability Standards Board is considering a request to expand its future agenda to include biodiversity reporting. GRI already works with the ISSB on its sustainability and climate disclosure standards, and the GRI biodiversity standard would likely be an important input for such a project.....", and,

? ? ? ? ? ? ? (vi) press release of the day: NYSE-listed and the world's largest private equity firm,?Blackstone Inc., announced yesterday in this press release the appointment of a "Vice Chairman, Strategy and Client Relations", as follows:?

? ? ? ? ? ? ? ? ?"Blackstone announced today that Thomas R. Nides, former long-time Vice Chairman of Morgan Stanley, Deputy Secretary of State, and Ambassador to Israel has joined the firm as Vice Chairman, Strategy and Client Relations. In this new role, Mr. Nides will support a variety of strategic firmwide initiatives and special projects, as well as?focus on senior client relationships globally......

? ? ? ? ? ? ? ???"Mr. Nides has extensive experience in both the public and private sector. He served as the United States’ Ambassador to Israel from 2021 to 2023. Prior to that, he spent over a decade at Morgan Stanley in various capacities including Chief Operating Officer and Vice Chairman......"

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