Tag:

Corporate Accountability

Will The FTC Target Corporate Greenwashing In 2022?

“Soft on You, Softer on the Planet” declares an advertisement for the Icon-Impact Collection from UGG® which debuted this fall in a store near you. Touted as an innovative product with a positive impact on the environment, the newly introduced collection uses reclaimed wool, a sole made of sugarcane, and repurposed plastic from at least two recycled plastic bottles. It’s all part of the brand’s Feel Good initiative, and in partnership with One Tree Planted, UGG® promises to plant one tree for every pair of shoes bought at select UGG® stores and online. It’s also an example of “green marketing,” the practice of appealing to consumers’ preferences for sustainable and eco-friendly products, especially Millennial and Gen Z consumers who are willing to pay a little bit extra for their purchases.

The Story That Sounded Too Good to Be True Was, Indeed, Too Good to Be True.

The process of the criminal trial of the youngest woman self-made billionaire, has recently started up again after being stalled due to Covid restrictions in the past year. Former CEO and founder of Theranos, Elizabeth Holmes, and her former president and one-time boyfriend, Ramesh Balwani, have been accused of misleading investors and raising hundreds of millions of dollars by making false or exaggerated claims in defiance of the anti-fraud provisions of federal securities laws. While she is currently facing a federal indictment on twelve different charges, including two counts of conspiracy to commit wire fraud and ten counts of wire fraud, Holmes has already settled her civil charges, which were brought forth by the Securities Exchange Commission (SEC). The civil charges brought forth by the SEC have now put Silicon Valley on alert by ensuring that technology companies who claim that they have a new groundbreaking technology that can change the world must be based on factual evidence, not purely myths.

How Proxy Access for Shareholders Can Hold Corporations Accountable

Proxy access is not about giving shareholder’s rights, it is about checking C-suite power so that everyone wins instead of just the CEOs. Proxy access has the potential to address some of the pressing issues with corporate power. Corporate power and influence are concentrated in the board of directors, proxy access gives shareholders the opportunity to infiltrate this exclusive “inner circle” of power. Shareholder access to the board can push change towards greater diversity in the boardroom and demand greater transparency and compliance.

Evolving Regulatory Conditions Spur the Creation of Novel Insurance Protections for Corporate Officers

Consistent with modern financial regulation, United States regulators are increasingly focusing upon individual accountability of corporate officers and directors. Once a regulatory agency contacts a corporation regarding an inquiry into the actions of its agents, it is the duty of the corporation to front the costs of legal defense and representation. Historically, corporate directors and officers liability insurance (“D&O”) covered the costs of legal defense and costs associated with the regulatory investigation. In light of the increasing government emphasis on individual liability within corporations, traditional D&O liability insurance is no longer guaranteed to protect corporate exposure to regulatory inquiry. As a result of these changes to corporate exposure, insurance agencies have begun to create novel insurance solutions to solve the problems created by the new regulatory policy.