'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) characteristics of an effective code of conduct (with examples form the codes of Procter & Gamble, FedEx, ConocoPhillips and GE HealthCare): Useful report on codes of conduct by communications firm Labrador, "Modernizing your Code of Conduct to Elevate its Impact", filled with examples from the codes of conduct of several prominent U.S. companies, including Procter & Gamble, FedEx, ConocoPhillips?and GE HealthCare (at pp.6-29). Below is from the section of the report, "What then does a good and effective Code of Conduct look like?":

? ? ? ? ? ? ? ? ? ? ? ? ?"?? – The Code of Conduct should be both an impactful call to ethical behaviors and an inspiring user experience to ensure “readability” created by visually engaging design, an easy to reference structure, and clear, inclusive language.

? ? ? ? ? ? ? ? ? ? ? ? ? ? ?– The document should be comprehensive, explaining the purpose of the Code and who it applies to and detailing expectations around various themes, such as: anti-corruption and ethical business practices; fair labor, employment practices and work environment; employee behavior expectations; confidentiality, information security and protection of intellectual property.

? ? ? ? ? ? ? ? ? ? ? ? ? ? ?-- A Table of Contents should appear at the outset to help readers see what is covered by the Code and easily navigate to specific?topics.

? ? ? ? ? ? ? ? ? ? ? ? ? ? ?– It should begin with a letter from the Chief Executive Officer or the Chief Compliance Officer of the company setting the “Tone from the Top”.

? ? ? ? ? ? ? ? ? ? ? ? ? ? ?-- The document should include a section outlining reporting procedures, and making clear that the company prohibits retaliation against those that report concerns......"

? ? ? ? ? ? ? ? ? ? Below is from the section, "Benchmarking":

? ? ? ? ? ? ? ? ? ?"With focus on ESG in recent years, and ESG reporting frameworks calling for disclosure of ethical practices, it follows that codes of conduct are starting to be more consistently reviewed and updated.

? ? ? ? ? ? ? ? ? ? ? ? ? - 63% have a document dated and produced or updated within the last two years

? ? ? ? ? ? ? ? ? ? ?"Most companies include a letter from the CEO explaining why the policies and practices in the code of conduct are important to company culture and business, as well as setting expectations for strict compliance. This letter is often found at the beginning of the document, along with an overview of cultural values.

? ? ? ? ? ? ? ? ? ? ? ? ? ?- 80% include a letter signed by the CEO

? ? ? ? ? ? ? ? ? ? ? ? ? ?- 51% of the letters mention the importance of (i) ethics, compliance, and integrity, (ii) following the code, and (iii) reporting a concern

? ? ? ? ? ? ? ? ? ? ? ? ? ?- 74% present company values at the beginning of the document

? ? ? ? ? ? ? ? ? ? ? "Encouraging reporting of ethical concerns requires practical guidance and instructions. Fact patterns with guidance on how to manage the situation and Q&A formats are helpful. Codes of conduct should also have visual cues to easily locate key information and understand how to report a concern.

? ? ? ? ? ? ? ? ? ? ? ? ? ? - 31% include decision-making tree graphic

? ? ? ? ? ? ? ? ? ? ? ? ? ? - 8% include a graphic depicting the reporting procedure"

? ? ? ? ? ? ? ? ? ? ? ?Note that for other useful reports on codes of conduct, see this recent Code of Conduct Report?by LRN,?a?provider of ethics and compliance training and resources, based on its "review?of the codes of conduct of nearly 200 of the top publicly traded companies", and LRN's?follow-up report, "9 ethical code of conduct examples": see item (i) from Sept. 25/23.

? ? ? ? ? ? ? (ii) Lyft's CEO on the misplaced zero in the EBITDA number in the company's Q4/FY 2023 earnings press release (which caused the stock to soar some 60%), and the process the company has put in place to prevent a repeat: As widely reported in the business press at the time (such as in this WSJ article, "Lyft Earnings Typo Sends Stock Soaring") Lyft, Inc.'s?Q4/FY 2023 earnings press release issued on Feb.13/24 contained an error in the EBITDA number which caused the company's stock price to initially soar some 60% (see item (iii) from Feb. 14/24 and item (i) from Feb.19/24, where the "typo", a misplaced zero, is discussed). Here is how Lyft CEO David Risher explains what happened, and the new process the company has put on place to prevent a reoccurrence,?in this wide-ranging Fortune interview last Wednesday, "What’s it like to take over the CEO job from a company founder? Lyft’s David Risher can answer that":

? ? ? ? ? ? ? ? ? ? "Fortune: Our listeners would never forgive us if we didn’t ask you about the EBITDA mistake because it was such a fascinating moment. It was a misplaced zero in a press release that caused the stock to soar, came back down. You now have class action lawsuit. What did you learn from that??Did you learn anything? Was there? Were there any…

? ? ? ? ? ? ? ? ? ? "Risher: Oh, yeah, we learned a lot. Yeah. I mean, the first thing I have to say and I’ve said this before, I’ll say it again. That’s on me. That’s on me. And I want people really to understand that when you’re the leader of the organization, someone makes a mistake, it’s your problem.?And so now I will also say, Man, did our team hustle? And what happened? What happened? It literally was an extra zero that got inserted into an early version of the press release and it just rolled forward. And this despite, literally no exaggeration, hundreds of peoples’ eyes, including my own, seeing it over and over again.?But what happened? It was in a forecast piece which gets a little less scrutiny?than the backwards looking stuff, the basis point versus percentage that I mean, they’re very, very different words. But unfortunately, of course, they mean something very, very different. And so and we literally found it in real time as we were reading out the sort of earnings report. And we changed it within two minutes, I think. And all of a sudden, our legal team again and actually our policy team jumped into action.?So very, very quick response. Absolutely fantastic. And I certainly learned how fast a team can work when it is under that kind of pressure.

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?Now, what have we also learned? Well, we’ve learned that even though we have really exactly the same process that every other public company has, all sorts of eyes [hard to hear], it wasn’t sufficient. It wasn’t sufficient. So what are we doing? We actually now have a process. We’re just about to go through this as our next earnings come out, where we take all of our materials, we now give them to an outside third party we’ve hired to do exactly this. And what they do is without having any other context, they look not just and sort of double check the numbers, but they try to build the model that our press release and earnings statement is suggesting they build. And then look at what that model results in. And then we compare that back to our internal models and if those models vary by anything that’s significant, we know there was a problem along the way. So it’s a new process. It’s one again, we got so much feedback from other investor relations and CFOs and so forth saying, You know, there but for the grace of God, go I. In other words, you know, you know these mistakes, it’s a one in a million sort of thing, but it happens. We’ve got a tighter process now."

? ? ? ? ? ? ? (iii) disclosing the results of an audit committee internal investigation into an accounting issue/press release of the day: ?On April 1/24,?Nasdaq-listed,?engineering and construction software?company?Autodesk, Inc. disclosed in this Notification of Late Filing?filed with the SEC that an internal investigation had been commenced by the audit committee over an accounting issue (the company's free cash flow and non-GAAP operating margin practices), and on April 16/24 provided an update in this press release?(see item (iii) from April 18/24). On Friday, Autodesk?announced in this press release?the results of the audit committee investigation, as well as the appointment of an interim CFO,?as follows:

? ? ? ? ? ? ? ? ? ?"Autodesk Inc. announces the results of the Audit Committee investigation. As previously announced on?April 1, 2024, the Audit Committee of the Board of Directors initiated an internal investigation regarding the company's free cash flow and non-GAAP operating margin practices. The Committee has completed its planned procedures with respect to the investigation. The company's management has determined that there will be no restatement or adjustment?of any audited or unaudited, filed or previously announced, GAAP or non-GAAP financial statements.......

? ? ? ? ? ? ? ? ? ? ?"The company also announces the following executive appointments.?Elizabeth "Betsy" Rafael has been appointed by the Board as Interim Chief Financial Officer?(Principal Financial Officer), effective?May 31, 2024. As Interim Chief Financial Officer, she is not currently an "independent director" for purposes of the Nasdaq Stock Market and has stepped down from the Audit Committee. She remains a director of the company......

? ? ? ? ? ? ? ? ? ? ?"Summary of the principal findings of the Audit Committee: The relevant time period for the investigation was fiscal years 2022, 2023, and 2024. A summary of the principal findings of the Audit Committee are set forth below: ........The Audit Committee proposed certain remedial measures including:?reviewing certain processes around financial communications and disclosures; assessing certain company organizational functions and responsibilities; and adopting and enhancing policies and processes related to the matters investigated......"

? ? ? ? ? ? ? (iv) Fortune releases the 2024 (and 70th.)?edition of the 'Fortune 500': Here it is, released this morning, the 70th. edition of the list of the Fortune 500 companies, ranking?the largest U.S. companies by revenue (methodology here), the "key trends" in this year's list described in?today's Fortune CEO Daily Newsletter. Topping the list for the 12th. year in a row was Walmart, and note this feature Fortune interview?today with Walmart CEO Doug McMillon which accompanies the list. Also accompanying the list, note this Fortune article, "The share of Fortune 500 companies run by women CEOs stays flat at 10.4% as pace of change stalls", which inter alia lists?the 52 women CEOs?in the Fortune 500.

? ? ? ? ? ? ? ? (v) (other) press release of the day:?

? ? ? ? ? ? ? ? ? ? ?(a) Hertz Global Holdings, Inc. announced yesterday in this press release the appointment of a new CFO from outside the company, and the resignation of the COO, as follows:

? ? ? ? ? ? ? ? ? ? ? ? ? "Hertz Global Holdings, Inc., a leading global rental car company, today announced the appointment of?Scott M. Haralson?as Chief Financial Officer, joining the company by the end of June. Haralson will succeed?Alexandra Brooks, who is leaving the Company to pursue other opportunities but will remain until the end of the month to ensure an orderly transition.....

? ? ? ? ? ? ? ? ? ? ? ? ? "Haralson?is a seasoned executive and veteran of the transportation industry with over 25 years of leadership and corporate finance experience, having most recently served as Chief Financial Officer of Spirit Airlines.....In addition, Hertz and Chief Operating Officer?Justin Keppy?have agreed that Mr. Keppy would resign from the Company,?effective?June 3, 2024...."

? ? ? ? ? ? ? ? ? ? ? ? ? ?As disclosed in the related Current Report?filed with the SEC, Hertz and the new CFO entered into an Employment Offer Letter, the terms of which are summarized in the said Current Report; the Current Report also discloses the severance arrangements with the departing COO;

? ? ? ? ? ? ? ? ? ? (b) NYSE-listed Spirit Airlines, Inc. announced yesterday in this press release?the appointment of the VP, Controller as interim CFO to replace the current CFO departing to become CFO at Hertz Global?(see (a) above), as follows:

? ? ? ? ? ? ? ? ? ? ? ? ? "Spirit Airlines today announced that Brian McMenamy, Vice President and Controller, has been named as Interim Chief Financial Officer, effective?June 14, 2024. McMenamy succeeds?Scott Haralson, Executive Vice President and Chief Financial Officer, who is departing to become CFO of a larger, publicly traded company outside of the airline industry. Haralson will continue in his role through?June 14, 2024to ensure a smooth transition. Spirit will initiate a comprehensive search for a CFO with the assistance of a leading executive search firm......Brian McMenamy?brings nearly 40 years of experience in corporate finance......joining Spirit in 2017......"

? ? ? ? ? ? ? ? ? ? ? ? Amended compensation arrangements with the interim CFO are disclosed in the related Current Report filed with the SEC.

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