Risk Channel delivers the latest, most relevant and useful business intelligence to key decision makers and influencers, each weekday morning.
North American Edition
23rd September 2021
Together with

U.S. steps closer to delisting Chinese companies for audit violations
The U.S. audit watchdog, the Public Company Accounting Oversight Board, has adopted a new framework that would help it implement a law banning foreign companies from U.S. exchanges if their auditors haven't been inspected by American regulators. The move threatens hundreds of China-based businesses which the Chinese Communist Party bans from making their auditing results available. Jeff Mahoney, general counsel for the Council of Institutional Investors, which represents pension funds and other large money managers, said the rule benefits investors because it improves transparency and reduces regulatory uncertainty. And although company delistings could cause some investors to suffer losses, “the alternative of letting one country ignore our federal securities laws is worse for investors and the capital markets in the long run.”
U.S. oil producers fail their tax standards
U.S. oil producers including Exxon Mobil, Chevron and ConocoPhillips are among companies that fail to report all their tax payments despite being members of the Extractive Industries Transparency Initiative (EITI), the global anti-corruption agency has said. The EITI revealed that a third of its members failed to uphold its tax transparency expectation in June, and identified them for the first time. Civil society groups say the oil majors reap the reputational benefits of being EITI members without compliance to its principles. “The assessment was a first step, and work remains to clarify and explain the expectations, but our hope is that it will encourage a ‘race to the top’ to meet or exceed them,” EITI board chair Helen Clark said. Carly Oboth, interim director of the U.S. branch of Publish What You Pay, observed: “We consider it fundamentally untenable for the EITI to be led by a Board composed of members who refuse to disclose their payments.”
SEC asks dozens of companies for improved climate disclosures
The Securities and Exchange Commission has been sending out requests to the CFOs of dozens of public companies asking them to provide more information to investors about how climate change might affect their financial earnings or business operations. The requests from SEC staff in the recent letters focus on risks to companies stemming from potential litigation or the transition away from fossil fuels, capital expenditures for climate-related projects, the potential for lower demand for goods and services that produce significant greenhouse-gas emissions and the effects of severe weather on company operations, among other things.
Draft capital rules make cryptoassets too costly to trade, banks say
The proposed capital rules for banks holding cryptoassets on their books from the Basel Committee on Banking Supervision could block lenders from competing in the sector, nine industry bodies have said. In a letter to the Committee, they asserted that more banking involvement would help make the underlying blockchain technology more widely available and bring "tangible benefits for the real economy.” The nine bodies include derivatives associations ISDA and FIA, the Institute of International Finance, European markets body AFME and the Chamber of Digital Commerce.
FTC: Health apps must notify consumers about data breaches
Apps and devices that collect personal health information must notify consumers if their data is breached or shared with third parties without their permission, the US Federal Trade Commission (FTC) has warned. A new policy statement to clarify a decade-old 2009 Health Breach Notification Rule, which requires companies handling health records to notify consumers if their data is accessed without permission, such as the result of a breach, was agreed by the FTC in 3-2 vote. FTC chair Lina Khan said this now been extended to apply to health apps and devices — specifically calling out apps that track fertility data, fitness and blood glucose — which “too often fail to invest in adequate privacy and data security.” 

The Tenth Annual NAVEX Next Risk & Compliance Virtual Conference

If ever there was a time that tested the limits of an organization's culture, risk, compliance, and ESG programs, this past year was it. A massive, sudden shift to remote work amidst a global pandemic. Essential workers serving on-site, facing new risks and uncertainty. And employee health and safety top-of-mind for everyone. The strengths and weaknesses of any risk and compliance program was on full display.
We'll cover hybrid workplace models, changing workforce paradigms, constant shifts in an increasingly regulated environment, regional impacts for global organizations, and innovative best practices all human resources, legal, risk, and compliance practitioners should and will care about in the coming year.
Register Now

Troubled workers can raise employee anxiety levels
Research suggests that levels of anxiety, depression and stress among an organization’s employees can be raised when a troubled new worker joins the business. A study published online in the Administrative Science Quarterly finds that hiring a professional who was previously diagnosed with at least one of these ailments increases the incidence rate, or the number of co-workers at the new organization who develop similar diagnoses, by about 6.32%. The study examined 250,000 employees at 17,000 companies in Denmark between 1996 and 2015. “The paper looks at the spread of mental health disorders through an epidemiological lens,” said study co-author Julia Kensbock, an assistant professor at the Maastricht University School of Business and Economics in the Netherlands. Viewed from this perspective, she says, mental health disorders can spread from one organization to another through new hires.
Faltering attempt to revive prohibition on employee political activities
A federal appeals court is unlikely to allow the judiciary's administrative agency to revive a ban on the political activities of its employees, including attendance at campaign events and making contributions to candidates. One member of the three-judge U.S. Court of Appeals for the District of Columbia Circuit panel described the attempt by the Administrative Office of the U.S. Courts to restrict its 1,100 employees' speech as a "bogus issue." U.S. Circuit Judge Harry Edwards noted that employees were already prohibited  from pursuing political activities on-the-job and said the presumption should be in favor of protecting their speech.
Private child care situation has worsened further during the pandemic
The New York Times reports on how the Biden administration is seeking to address a shortage of private child care that has worsened during the pandemic. Eight in 10 providers said they had a staffing problem, and half said hiring was now more difficult than it had been before the pandemic, according to a summer poll of 7,500 of them by the National Association for the Education of Young Children. The lack of child care is also contributing to other labor shortages, because many parents who cannot find reliable child care can't return to work. “The free market works well in many different sectors, but child care is not one of them,” Treasury Secretary Janet Yellen said, adding “Those who provide child care aren't paid well, and many who need it can't afford it.”
Judge rejects Greenpeace lawsuit against Walmart
A federal judge has ruled in favor of Walmart in a case alleging that the retailer labels some of its house-brand plastic products "recyclable" when that option is not available for most consumers. U.S. District Judge Maxine Chesney dismissed Greenpeace's claims that it violates California's Unfair Competition Law by marketing and selling single-use plastic products labeled No. 3 to No. 7 as recyclable even though their U.S. consumers' recycling programs rarely accept them. The complaint claimed that customers of Walmart plastics products, including fruit snack cups, party cups and cutlery, do not have access to recycling programs that accept them or there is no market for those plastics given their low resale value.
U.S. single-family housing starts decline further in August
U.S. single-family homebuilding fell for a second straight month in August as builders continued to struggle with shortages of materials and labor. The Commerce Department said that single-family starts, which account for the largest share of the housing market, dropped 2.8% to a seasonally adjusted annual rate of 1.076m. Overall housing starts advanced 3.9% to a rate of 1.615m, ahead of a Reuters poll estimate of 1.555m. The report showed backlogs continued to climb, with the number of single-family houses under construction but not yet completed rising to the highest since 2007. Houses that are authorized but not yet started rose to the most since 1979, further underscoring builders’ struggle to keep up with demand. The backlog of homes yet to be started increased 3.7% to 251,000 units, a record high. Single-family homes yet to be started were near a 15-year high.
Fed prepares to roll back stimulus program
Federal Reserve officials indicated on Wednesday that they expect to soon slow the asset purchases they have been using to support the economy. Fed Chair Jerome Powell said that the central bank’s bond purchases, which have totaled $120bn per month, “still have a use, but it’s time for us to begin to taper them.” Mr. Powell said officials hadn’t made a formal decision on how quickly to reduce purchases, but most agreed that a gradual process “that concludes around the middle of next year is likely to be appropriate.” The Fed is also holding benchmark interest rates near zero but indicated that rate hikes could be coming sooner than expected. 
Unilever faces backlash over Ben & Jerry’s Israel boycott row
American pension funds have threatened to sell their stakes in Unilever because of the decision of its Ben & Jerry’s brand to stop selling ice cream in Israeli-occupied territories. The brand, which has become known for its corporate activism, said in July that it would end its licence in the Israel-occupied West Bank. The brand said then that “we believe it is inconsistent with our values for Ben & Jerry’s ice cream to be sold in the occupied Palestinian territory”. However, New Jersey’s $92.7bn pension fund has written to Alan Jope, the group’s chief executive, to say that it is enforcing a state law that orders the pension fund to act against companies imposing economic boycotts in Israel or in Israel-controlled territory. 
COVID restrictions in Vietnam a headache for retailers
CNBC looks at how prolonged coronavirus restrictions in Vietnam have become a bigger headache for retailers, particularly those that rely on the region for manufacturing footwear and apparel, as the holiday season approaches. On Monday, authorities announced a two-week extension of restrictions in Ho Chi Minh City. Under the restrictions, factories have been subject to rules that require them to either keep workers on site or completely suspend operations. However, some retailers have expressed hope the pressure will ease. Lululemon has said it anticipated factories in Vietnam would start a phased reopening in the middle of September. Meanwhile, the high-end furniture chain RH has targeted a restart in southern Vietnam in October. It hopes to ramp up production to full capacity by the end of the year. CNBC notes that the retailers with some of the greatest exposure to Vietnam include Ugg and Hoka parent Deckers Outdoor, Michael Kors parent Capri Holdings, Columbia Sportswear, Nike, Coach owner Tapestry, Under Armour and Lululemon.
World Bank cancels business report after investigation
The World Bank has canceled Doing Business, a prominent report rating the business environment of the world’s countries, after an investigation concluded that senior bank management pressured staff to alter data affecting the ranking of China and other nations. Implicated individuals include then-World Bank Chief Executive Kristalina Georgieva, now managing director of the International Monetary Fund, and then-World Bank President Jim Yong Kim. Doing Business, which looks at taxes, red tape, regulation and other business conditions, is cited by some governments in trying to attract investment. It ranks countries on factors such as how straightforward or burdensome it is to register a business, legally enforce a contract, resolve a bankruptcy, get an electrical connection or obtain construction permits. Chinese officials in 2017 and 2018 were eager to see their ranking improve, and so Mr. Kim and Ms. Georgieva and their staff held a series of meetings to discuss ways that the report’s methodology could be altered to improve China’s rankings, according to the investigative report by the law firm WilmerHale. Ms. Georgieva said she fundamentally disagrees with the findings and interpretations of the report. 
iPhone features aim to help detect depression and cognitive decline
Apple researchers are developing technology to help diagnose depression and cognitive decline. Sensor data around mobility, physical activity, sleep patterns, typing behavior and more could help identify digital signals associated with the target conditions so that algorithms can be created to detect them reliably. Apple has announced research collaborations with the University of California, Los Angeles, to study stress, anxiety and depression, and pharmaceutical company Biogen to study mild cognitive impairment.

Risk Channel delivers the latest, most relevant and useful business intelligence to key decision makers and influencers, each weekday morning.

Content is selected to an exacting brief from hundreds of influential media sources and summarised by experienced journalists into an easy-to-read digest email.

Risk Channel enhances the performance and decision-making capabilities of individuals and teams by delivering the most useful news and knowledge in a cost-effective way, while promoting a sponsor's brand to the risk and leadership communities.

If you would like to sponsor a Risk Channel special report, reaching thousands of influential professionals, companies, business leaders and decision makers through our US and/or UK & Europe editions, please get in touch with us via email sales team

This e-mail has been sent to [[EMAIL_TO]]

Click here to unsubscribe