Corporate Governance

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The idea that investors might choose to consider certain environmental, social, and governance factors when deciding whether to buy shares of a company—a concept commonly known as ESG—continues to gain popularity with trillions of dollars currently held in investment funds that take into account ESG principles. Yet recently, the use of ESG investment measures has been the target of intense scrutiny and political pushback that threatens to produce inconsistent regulation and enforcement approaches at the federal, state, and local levels. The United States Securities and Exchange Commission (“SEC”), for example, has focused on ESG by investigating and taking action against companies that tout business practices such as consideration of environmental sustainability, but fail, in practice, to live up to their claims. In contrast, a number of state governors, legislatures, and attorneys general have passed laws or issued cease-and-desist-type letters to stop or discourage companies from considering ESG factors, in whole or in part, when making investment decisions. These varied and seemingly conflicting approaches to ESG can easily create a conundrum for companies that have incorporated or are seeking to incorporate ESG initiatives into their operations. When dealing with ESG, businesses today face the difficult task of determining how best to implement ESG-based policies, procedures, and practices, while mitigating the risk that such actions may draw the ire of officials and regulators who view the consideration of ESG factors in investment decisions to be a breach of the fiduciary duty to prioritize return on investment over non-financial considerations.Continue Reading An Evolving High-Wire Act: Navigating Conflicting Laws, Regulations, and Guidance in the ESG Space

The United States Department of Justice (DOJ) released updated guidance regarding its Evaluation of Corporate Compliance Programs on June 1, 2020.  The release comes just over a year since the guidance was last updated in April 2019.[1]  While these latest changes are less extensive than the most recent ones, there are some key differences that suggest the DOJ may be shifting some areas of focus when it comes to assessing the effectiveness of corporate compliance programs.
Continue Reading DOJ Updates Corporate Compliance Guidance

By David Gallacher 

Last month we wrote about a provision in the proposed 2013 National Defense Authorization Act (“NDAA”) that would have given the Defense Contract Audit Agency (“DCAA”) statutory authority to demand a company’s internal audit reports in order to audit the efficacy of a company’s internal business systems. Surprisingly, the authorization, as originally proposed, was modified in the final legislation. While Congress directed DCAA to issue new guidance regarding auditor access to internal audit reports, Congress stopped short of giving DCAA actual authority to demand such reports. As such, contractors will remain at loggerheads with DCAA auditors who try to exceed their statutory authority.Continue Reading Smash & Grab Redux – Congress Seems to Give DCAA Permission But Forgets to Give It Authority

By David Gallacher 

The Defense Contract Audit Agency (“DCAA”) has long sought access to contractors’ internal audit reports in connection with the routine audit of contractors’ business systems. Contractors have, in most cases, successfully resisted requests for such access on the grounds that DCAA has no statutory authority to request such documents. But that may soon change. Section 843 of the Senate version of the 2013 National Defense Authorization Act (S. 3254) would grant DCAA broad access to contractor internal audit information.Continue Reading Smash & Grab – DCAA Poised to Gain Access to Contractor Internal Audit Reports

By Peter Menard

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) became law on July 21, 2010. A primary purpose of the Act is to further incentivize whistleblowers…

Continue Reading The Dodd Frank Act: A Guide to the Corporate Governance, Executive Compensation, and Disclosure Provisions

As we discussed here last November, the United States Navy, the other military services, and the Department of Defense, have all recognized that their personnel are using social media and have responded by establishing detailed social media policies.  Similarly, there is not a shred of doubt that your company’s employees are using social media. And, just like the military services and DoD, if you’re a government contractor then you must establish a social medial policy—and it cannot be a “cookie cutter” version of standard corporate social media policies. Among other things, it must address the risk of classified information being leaked, and the ways in which your employees’ security clearances can be put in jeopardy if they are not using social media prudently.
Continue Reading 10 Social Media Must Haves for Your Company’s FAR-Mandated Compliance Program