LEGAL
New corporate governance principles
Public companies should take note of the recently issued Commonsense Principles of Corporate Governance (Governance Principles) and consider whether some or all of the principles may be applicable to their own circumstances.
In July 2016, a group of CEOs of prominent companies and institutional investors released a set of corporate governance principles on the roles and responsibilities of boards, companies, and shareholders. The Governance Principles address eight key topics:
The Governance Principles are not meant to be a one-size-fits-all solution, but instead should be used by company directors, executives, institutional shareholders, and in-house and outside counsel to start a discussion on what constitutes good corporate governance.
Companies should review the Governance Principles and keep them in mind when evaluating their own corporate governance structure and guidelines and engaging with their shareholders.
For more information on the Governance Principles, see Practice Note, Corporate Governance Practices: Commentary.
Online reviews and endorsements
To ensure regulatory compliance across international borders, companies handling online reviews and endorsements should review the guidelines recently published by the International Consumer Protection Enforcement Network (ICPEN), an organization that consists of the FTC and consumer protection agencies from more than 50 other countries.
The ICPEN guidelines provide:
While the ICPEN guidelines cannot substitute for an analysis of each country’s laws, they do offer common best practices for administrators and marketing professionals for the solicitation, publication, and moderation of online reviews and endorsements.
The ICPEN guidelines advise that companies handling online reviews should:
The ICPEN guidelines recommend that companies handling endorsements should:
When creating online review programs and endorsement agreements, companies should review and follow the ICPEN guidelines, as well as relevant FTC regulations and recommendations.
Ensuring arbitration for employee disputes
The recent dispute between former Fox News anchor Gretchen Carlson and former Fox News executive Roger Ailes illustrates the potential difficulty of enforcing arbitration for inter-employee disputes where an arbitration provision does not explicitly require arbitration for these disputes and does not broadly define the company to include its employees.
In Carlson v. Ailes, a sexual harassment dispute, the terms of an arbitration provision in Carlson’s employment agreement required arbitration for any dispute arising out of the agreement or Carlson’s employment. However, the only parties to the agreement were Carlson and Fox News. The agreement also did not define Fox News to include any executives or other employees of the company.
After Carlson sued Ailes (but not Fox News), Ailes sought to compel confidential arbitration and stay all judicial proceedings based on the arbitration provision in Carlson’s agreement with Fox News. Carlson opposed the motion in part by arguing that she did not have an agreement to arbitrate with Ailes. Carlson also argued that the alleged sexual harassment:
To help ensure that all employment-related disputes are subject to arbitration, especially those involving highly confidential information or sensitive allegations, arbitration provisions in both employment-related agreements and any company alternative dispute resolution program or policy should explicitly require confidential arbitration for an inter-employee dispute. The provisions should:
This look at the major issues on the horizon for corporate counsel comes from Practical Law – an online legal know-how service. View all the looming issues now compliments of Practical Law The Journal, which covers the latest transactional and compliance topics that impact your practice. To gain access to more related know-how resources, please visit us.practicallaw.com.
-->
