Tagged: Corporate Governance

Boeing Settles Shareholder Litigation and Agrees to Reforms (Part IV of IV)

The crushing aftermath of the tragic 737 MAX scandal is disturbing at the least.  Innocent lives were lost because of Boeing’s culture misfires, poor leadership at the management and board level, and an arrogant disregard for the impact of safety concerns. Boeing’s 737 MAX fleet was grounded for twenty months, until November 18, 2020.  Boeing was ordered by the FAA to cure the defects in...

The Delaware Court’s Decision Highlights Boeing’s Defective Corporate Culture and Board Governance Failures (Part II of IV)

When considered in light of the Chancery Court’s decision, DOJ’s essential findings in its Boeing investigation are problematic at best.  The Chancery Court’s decision outlines how Boeing’s culture of safety deteriorated into a culture of cost-cutting and profits, while under supervision of a board with star-studded credentials.  The Delaware Court’s decision provides a perfect example of how weak corporate governance can have a direct and...

Implementing ESG Programs: Structure and Responsibilities (Part I of III)

ESG – the initials that are transforming corporate missions, purposes and structures, fueled by stakeholder and investor demand.  It is a significant moment in corporate and stakeholder interactions.  Companies recognize the responsibilities but even more importantly, the opportunities, to build a sustainable and financially profitable organization. But there are significant changes that have to occur along with the ESG objective.  I am dubious about the...

Delaware Court Rejects Motion to Dismiss Lawsuit Against Boeing Board Members for Failure to Conduct Proper Compliance Oversight (Part III of III)

The Delaware Chancery Court is continuing its trend of permitting Caremark claims against corporate board members who fail to exercise proper oversight and monitoring of compliance programs.  The Delaware Court’s latest decision involving the Boeing board and its failure to conduct proper oversight of the 737 MAX safety scandal is yet another example.  At bottom, the Chancery Court is raising the stakes on board member...

ESG and Business Risks – Leveraging Compliance Resources

Chief compliance officers are creative professionals.  This is one of many areas of expertise.  But when it comes to corporate politics, many CCOs know how to package and promote their mission. CCOs faced real constraints and challenges during the pandemic. CCOs were challenged as to why compliance was an important function to preserve in the time of a pandemic which threatened many companies’ very existence. ...

Culture and a Company’s Most Valuable Intangible Asset – its Reputation

Corporate leaders and executives like to mouth the words surrounding corporate culture.  It is part of the code they all use with each other.  Few of them, however, really know what the word means or even dare to understand the importance to their business. Let’s face it – corporate leaders and executives like to talk the talk but they rarely if ever understand what they...

Episode 189 — A Review of the ESG Movement

ESG is firmly implanted in the corporate governance landscape.  Prosecutors and regulatory agencies are quickly adding ESG to their lexicon. The real question for every organization is “what are you doing to address it?”  ESG is a terrific opportunity to leverage an organization’s corporate culture to address a broad set of values beyond ESG principles. In this Episode, Michael Volkov discusses the ESG movement and...

Episode 158 — Improving Corporate Board Governance

It has been almost one year since the Business Roundtable Restatement of Corporate Purposes to underscore expansion of broad governance and sustainability principles.  Yet, one year later, not much has changed.  Corporate board governance needs to improve and initiate reforms in response to recurring problems and scandals. Corporate boards can no longer represent resting places for business executives at the end of their respective careers. ...

The “Old” Board Governance Model Needs to Change

Corporate boards are under increasing attack by investors, shareholders and the public.  In the aftermath of corporate legal train wrecks, such as the Wells Fargo, Volkswagen Emissions, General Motors, J.P. Morgan 1MDB Malaysia, and increased demand for sustainability, ESG and other shareholder public policy objectives, corporate board members have a significant target on their respective backs. Corporate governance is at a critical juncture.  The old-line,...

Airbus Systemic Bribery and Export Violations: Understanding How a Company’s Compliance Program and Culture Failed (Part IV of IV)

When reviewing a major enforcement case, I always ask two basic questions: What was the role of Board and senior management in the failure, and how did they fail to exercise proper oversight and ensure compliance? What was the company’s culture and what steps did the Board and senior management take to implement and monitor an effective ethical culture? After reading the Airbus’ factual proffer,...