On June 1, 2020, the Criminal Division of the U.S. Department of Justice (the “Department”) released revisions to its guidance regarding the Evaluation of Corporate Compliance Programs, which the Department uses in assessing the “adequacy and effectiveness” of a company’s compliance program in connection with any decision to charge or resolve a criminal investigation, including
Corporate Law
Changes to the German Foreign Direct Investment Control Regime Take Shape Amid the COVID-19 Crisis
Even before the COVID-19 pandemic, the German Federal Ministry of Economics and Energy (Bundesministerium für Wirtschaft und Energie – BMWi), led by federal minister Peter Altmaier, announced a major revision of Germany’s foreign direct investment control regime (FDI Regime) to come into force in 2020, in what would become the third amendment of the FDI Regime since 2017. This announcement was made as part of the introduction of the BMWi’s “National Industry Strategy 2030”. The aim of this new industrial policy is to “protect and regain Germany’s commercial and technical expertise, competitiveness and industrial leadership at national, European and global level”.
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The Gig is Up? COVID-19 & Remote Work Trend Toward Growth in Gig Labor*
The COVID-19 pandemic is likely a watershed moment for the traditional structure of America’s business workforce. Although there is much uncertainty and opaqueness about the future, it seems clear that in the short term “remote” work arrangements – remote from large commercial office complexes and from concentrated city centers – will become more common for a substantial part of the workforce.
In the medium and longer terms, the pandemic may also support trends toward a more gig-based workforce in sectors of the labor market that are not currently significantly gig-based, specifically for workers in white-collar, business service industries. We lay out below a few of the reasons to anticipate that result and briefly explore the principal legal implications for business. As virtually all companies are considering the impact of the pandemic on their businesses, and specifically the cost-saving potential tied to remote work where feasible, they should take the opportunity now to also consider the possibility that gig-based workforce trends will impact them and how the steps they take in the short term may influence any such impact. For many public companies, the trends and issues discussed below fall under the umbrella of human capital management strategy, as to which the board of directors may be expected to exercise oversight.[1]
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UPDATE: Cuomo Executive Order Gives New York Corporations Relief on Physical Annual Meetings
This is an updated version of our prior post to address Governor Cuomo’s most recent Executive Orders.
In response to the COVID-19 pandemic, Governor Cuomo declared a disaster emergency and ceased operation of all non-essential businesses in New York state with the March 7 Executive Order 202 and its successor Executive Orders. In particular, the March 20th Executive Order 202.8 provided temporary suspension of several state law regulatory requirements, including with respect to shareholder meetings of New York corporations.
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Glass Lewis Revised Guideline Regarding Virtual Meetings for 2020 Proxy Season
Glass Lewis recently announced an update of its guidelines, which temporarily relaxes its standard policy against virtual meetings in light of COVID-19. The update provides that “[f]or companies opting to hold a virtual-only shareholder meeting during the 2020 proxy season (March 1, 2020 through June 30, 2020), [Glass Lewis] will generally refrain from recommending to vote against members of the governance committee on this basis, provided that the company discloses, at a minimum, its rationale for doing so, including citing COVID-19.”[1] This formal update of Glass-Lewis’s guidelines comes on the heels of statements by both Glass-Lewis and ISS indicating openness to relax their positions on virtual meetings, which we discussed here.
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UPDATE: Coronavirus & Virtual Annual Meetings
This is an updated version of our prior post to address a new guideline issued by Glass Lewis.
With rising concerns around the spread of COVID-19 (“coronavirus”) in the United States and globally, in order to mitigate health risks, many public companies may consider adding a virtual component to the format of their annual shareholder meetings. In the United States, state law generally governs the availability of a virtual meeting format. At the federal level, the SEC regulates the filing and mailing of proxy solicitation materials. While we have not seen direct guidance from state legislatures on virtual or hybrid meetings in the context of the coronavirus pandemic, on March 13, 2020, the SEC released guidance (“SEC Coronavirus Guidance”) addressing annual shareholder meetings[1] in light of recommendations by the Centers for Disease Control and Prevention (“CDC”) and other public health officials to cancel, or explicitly state policies that prohibit, large, in-person gatherings[2] in an effort to prevent the spread of coronavirus.[3] Set forth below are various considerations that a company should take into account when determining whether to move from an in-person to a virtual or hybrid[4] annual meeting
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Coronavirus & Postponing/Adjourning Annual Meetings
In light of the growing concern about COVID-19 (“coronavirus”) in the United States and globally, the U.S. Centers for Disease Control and Prevention (“CDC”) and other public health officials have recommended cancelling large, in-person gatherings for the next several weeks.[1] As a result, some companies may be considering, or may in the coming weeks need to consider, postponing the date of their shareholder meeting. While moving to a virtual or hybrid meeting, as discussed in our blog post, “Coronavirus & Virtual Annual Meetings,” may be a good solution for certain companies, other companies may determine (or due to a lack of vendor capacity may be forced to determine) that the better course of action for them is to postpone or adjourn their annual meetings.
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Federal Reserve’s Final Rule on “Control”: Observations and Analysis
On January 30, 2020, the Federal Reserve issued a highly-anticipated final rule amending its regulations governing when one company will be deemed to control another. The final rule will provide greater certainty and transparency by codifying and clarifying a number of principles for analyzing control that have never before been set out in a comprehensive…
London’s Premium Segment and High-growth Companies: Return of the Dual-class Structure?
In recent years there has been a material reduction in the number of companies seeking admission to the Premium Segment of the London Stock Exchange. In addition, a number of market participants believe that high-growth tech companies are materially under-represented on the Premium Segment. In an article published in late 2019, the Financial Times indicated…
Cleary Gottlieb Participates in Panel Discussion on Outlook for the 2020 Proxy Season
On December 2, 2019, The Conference Board and Cleary Gottlieb Steen & Hamilton LLP hosted a panel discussion on key corporate governance considerations for the 2020 proxy season. The panelists were Sandra L. Flow, Partner, Cleary Gottlieb, Mary E. Alcock, Counsel, Cleary Gottlieb and William Ultan, Managing Director, Corporate Governance, Morrow Sodali. The panel was moderated by Paul Washington, Executive Director, ESG Center, The Conference Board.
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