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Audit committees at the largest U.S. companies have expanded their oversight this decade beyond financial challenges to encompass risks in cybersecurity, sustainability and artificial intelligence (AI), according to a new report from EY. The proportion of companies citing sustainability as an audit committee responsibility surged to 22% this year from 6% in 2021, EY found in a survey of Standard & Poor’s 500 firms. A growing proportion of audit committees oversee cybersecurity risk at most large companies, EY said. The share of S&P 500 companies that cite cybersecurity as an audit committee responsibility increased to 77% this year from 25% in 2019, according to EY. Companies are beginning to disclose some level of oversight for AI risks, and most commonly cite the risk as a point of audit committee oversight, EY said.

 

CFO Dive

The Department of Justice (DoJ) is reportedly planning to tell Google that it must sell its web browser, Chrome, having previously ruled that the tech giant operates an online search monopoly. Google will also reportedly be asked to establish new measures around its artificial intelligence, Android operating system and use of data. In October, the DoJ suggested that it could seek a break-up of Google as it considered the remedies and penalties it could impose. In response, Google said "splitting off" parts of the business like Chrome or Android would "break them" and “change their business models.” Amid reports that the DoJ may force the sell-off of Chrome, Google executive Lee-Anne Mulholland observed: “The DOJ continues to push a radical agenda that goes far beyond the legal issues in this case.” She added: “the government putting its thumb on the scale in these ways would harm consumers, developers and American technological leadership at precisely the moment it is most needed.”

 

ABA Journal

BBC News

U.S. District Judge Sean Jordan has sided with the state of Texas and a group of business organizations and blocked a new rule from the Biden administration that would have expanded access to overtime pay to millions more salaried workers across the U.S. Under the federal law, nearly all hourly workers in the U.S. are entitled to overtime pay after 40 hours a week. However, many salaried workers are exempt from that requirement, unless they earn below a certain level. The Labor Department's now-moribund rule would have marked the biggest increase to that cap in decades. Employers were required pay overtime to salaried workers who make less than $43,888 a year in certain executive, administrative and professional roles as of July 1. The previous threshold of $35,568, which was set in 2019, is poised to go back into effect.

 

JD Supra

NPR

The U.K.'s Financial Conduct Authority (FCA) claims that Jes Staley, the former CEO of Barclays, made misleading statements about his relationship with disgraced financier Jeffrey Epstein. The FCA intends to ban Staley from senior roles and impose a fine of £1.8m ($2.3m) in connection with a letter sent by Barclays in 2019. The City of London watchdog said Staley, a former JPMorgan executive, had "recklessly approved" the letter, which the FCA says contained two misleading statements, about his relationship with Epstein. Staley is currently challenging the FCA's decision in London's Upper Tribunal, with a hearing scheduled for March next year. The FCA's lawyer, Leigh-Ann Mulcahy, said that Staley had "dishonestly or recklessly" misled the watchdog during interviews from 2019 to 2021, claiming he had "zero contact" with Epstein while serving as Barclays' CEO.

 

Reuters

T-Mobile has reported a breach linked to the Chinese state-sponsored hacking group known as Salt Typhoon. While the company asserts that customer data and critical systems remain largely unaffected, the hackers accessed sensitive information, including call records and private communications of high-ranking U.S. officials, indicating a targeted effort to gather intelligence. T-Mobile is actively collaborating with federal authorities to investigate the breach. T-Mobile is enhancing its cybersecurity measures, having recently settled a $31.5m case with the FCC to improve its security infrastructure.

 

Forbes

A recent survey by ZestyAI has revealed a significant shift in how insurance companies are addressing the risks posed by extreme weather events. The survey, which included 200 senior property and casualty insurance executives, found that 25% of insurers are now utilising AI to assess risks from severe storms, while 18% are applying AI in wildfire risk evaluations. A notable 73% of executives believe that AI models are essential for managing climate-related losses. Despite this, traditional actuarial models remain popular, with 54% favouring them for wildfire assessments. The cost of extreme weather is escalating, with insured losses from severe storms in the US rising from $30bn in 2022 to over $50bn in 2023. Attila Toth, Founder and CEO of ZestyAI, explained: “AI has an incredible capacity to transform the insurance industry by enhancing the capability of carriers to protect the assets and wellbeing of policyholders.”

 

Insurance Business Magazine America

According to a new research report by Fathom and IFI Global, the insurance industry is significantly lagging in establishing dedicated climate risk committees, with only 30% of firms having one. This is in stark contrast to banks, where 63% have such committees. Harry Vardigans, Head of Insurance at Fathom, stated: “This research highlights a significant opportunity for the insurance sector to enhance its climate risk management.” The report also reveals that 81% of interviewees identified a lack of accurate data as a major challenge in managing climate risk. Despite this, only 43% of insurance firms use external tools for climate risk assessments, compared to 56% of investment management firms. The findings suggest that improving governance and data resources could provide insurance firms with a competitive edge in a climate-conscious market.

 

Reinsurance news

The Associated Press (AP) has announced plans to reduce its workforce by approximately 8% through buyouts and layoffs, as part of a strategy to transition to a digital-first organization. Daisy Veerasingham, AP's president and CEO, said: “We all know this is a time of transformation in the media sector,” as she emphasized the need to adapt to changing customer demands. Eligible employees will receive buyout offers that include severance pay and partial health coverage for 18 months. The News Media Guild indicated that 121 members would be offered buyouts, although AP expects fewer job cuts among union members. The AP has faced challenges, including the loss of major clients like Gannett and McClatchy, which have ceased purchasing news from the organization. Despite diversifying its revenue streams, the AP continues to navigate the difficulties plaguing the news industry.

 

OregonLive.com

Ericsson CEO Börje Ekholm says Europe is one of the weakest telecom markets in the world - and policymakers must encourage more consolidation and cut regulation there or else the Swedish telecom equipment maker will continue to shift investments to overseas markets. “Europe is falling behind,” Ekholm said. “The natural conclusion of that is we’ll be shrinking in Europe and growing in North America.” Relocating Ericsson’s headquarters from Sweden to the US is “always a question that comes up,” he said, observing that Ericsson has deep ties to Sweden, “But, you know, we always need to also look at: How will the world look in the future? So we don’t know . . . Would we relocate at some point in time? That could well happen.”

 

Luxembourg Times

The U.S. government has initiated two investigations into Ford's recall practices following a civil fine for delays in addressing safety issues. The National Highway Traffic Safety Administration (NHTSA) is examining approximately 457,000 Ford Bronco Sport SUVs and Maverick pickups amid complaints of sudden power loss after a recall fix. The power loss is attributed to degraded 12-volt batteries. Additionally, about 113,000 Ford Expeditions from 2019 to 2020 are under scrutiny for seat belt issues. Ford is cooperating with the investigations. Recently, NHTSA imposed a civil penalty of up to $165m on Ford, marking the second-largest fine in its history, following the automaker's slow response to recalls and incomplete information provided to the agency.

 

The Columbian

House Speaker Mike Johnson (R-LA) expressed caution regarding President-elect Donald Trump's proposal to eliminate income tax on tips, emphasizing the need for financial feasibility. "You've got to do the math," Johnson stated during an interview on CNN's State of the Union. He acknowledged the urgency of advancing Mr. Trump's economic agenda, which includes significant tax cuts, as Congress prepares for a challenging tax landscape in the coming year. Mr. Trump's plans aim to extend personal income tax cuts and reduce corporate tax rates, but Mr. Johnson highlighted the importance of ensuring these savings are sustainable. Meanwhile, Donald Trump Jr. noted that some cabinet picks may face controversy, stating: "Some of them are going to be controversial because they'll actually get things done." The transition team is prepared with alternative candidates if necessary, he added.

 

Accounting Today

Vanguard has announced that clients will soon be able to direct proxy votes on approximately $250bn of its assets, significantly expanding its "Investor Choice" programme. This initiative aims to enhance corporate democracy by allowing shareholders of new funds to participate. John Galloway, Vanguard's global head of investment stewardship, stated: "We recognise that well-informed, smart people can have different opinions, and we want to deliver options to those investors."

 

Daily Mail

Reuters

Tropicana has faced a significant backlash after changing its iconic orange juice bottle from a clear carafe to a more traditional design, downsizing from 52 ounces to 46 ounces. Sales have plummeted, with a reported drop of 19% by October, and the brand has lost market share to Simply Orange. Customers are frustrated, claiming the new bottle is less ergonomic and accusing Tropicana of "shrinkflation".

 

CNN	Missoulian