ESG and the “E” and the “S” and the “G” – ESG + Sustainability + Climate Action

ESG criteria refers to an organization’s environmental, social and governance policies, practices and processes, some of which depend upon whether the organization is a public corporation or business, private corporation or business, nonprofit, not for profit or NGO, governmental organization or entity, or a hybrid or mixed organization or entity. ESG criteria will also vary depending on the size of the organization or entity, its industry, and whether it primarily provides a service, a product or manufacturing, or a combination of both.

The following criteria can be used for reference; indeed, however, whereas applicable criteria have been set in some circumstances or for some situations, applicable criteria otherwise often remain in a state of change, discretion, suggestion or proposal, and choice. The various services that evaluate and rate ESG also each individually decide which criteria they will use. Indeed, the below listed possible criteria are intended to be fairly encompassing so as to promote thought and consideration, but are not necessarily in the whole a list of required criteria. Each organization and entity must evaluate its own requirements and circumstances.

Environmental criteria broadly refer to some or all of the following:

Resource materials and energy evaluation, selection, use, and discharge, management and conservation;

Environmental risks and management;

Waste;

Emissions;

Pollution;

Hazardous and toxic wastes and emissions;

Ownership and management of contaminated materials and land;

Treatment of animals; and

Compliance with laws and regulations.

Depending on the processes that are being used sometimes the environmental component of ESG can be the more clear-cut or direct component to identify and measure.

Social criteria broadly refer to some or all of the following:

The organization’s or entity’s internal and external relationships, values and culture and its adherence to and enforcement of values with employees and independent contractors in the workplace and work environment;

Its working relationship employees, independent contractors and in the workplace, with customers, with suppliers, in the community, and with other stakeholders;

Human capital, as it has been called – I don’t particularly like the term “human capital” as to me it sounds a bit faceless or depersonalized – instead I prefer something such as simply the category “People”;

Health and safety;

Well-being;

Diversity;

Opportunities provided, inclusiveness and equality, training, mentorship, advancement and advancement opportunities;

Talent acquisition and retention;

Social engagement and active involvement;

Discrimination;

Organizational openness and communications;

Organizational trust, integrity and reputation; and

Compliance with laws and regulations.

I view the social criteria component of ESG as being the more currently challenging component because of the very large numbers of criteria that people can argue are or should be included, and its sometimes difficulty of measurement or more subjective nature.

Governance criteria broadly refer to some or all of the following:

The organization or entity overall, and to its leaders and their actions and leadership including such criteria as:

Board and management roles, makeup, structure, policies, processes and practices;

Decision making;

Accounting methods and related transparency;

Shareholder engagement and shareholder rights;

Avoidance of unlawful practices, and legally or ethically questionable business practices;

Strong, transparent and enforced governance policies and practices;

Codes of conduct and ethics, and enforcement;

Board, executive officer and senior management diversity;

Measurement of corporate and organization performance;

Corporate and organization values, trust, integrity, and reputation;

Board oversight;

Accountability for actions;

Oversight of internal controls;

Oversight of compliance with laws and regulations;

Compensation;

Avoidance of unlawful conflicts of interest;

Information disclosure;

Corporate and organization sustainability;

Oversight of environmental, social and governance criteria;

The organization’s use of information and private information, and information and cyber security;

Protection of the organization’s assets including intellectual property;

Officer, director, and management openness to appropriate challenges, disagreement, and criticism, and the manner and processes for learning about, addressing, evaluating and debating, decision making, and resolving those ongoing occurrences and situations; and

Board and director structure, agenda setting, demeanor, meeting processes, independence, and adherence to prudent business judgment and diligent, active and proactive business judgment rule practices.

Whereas the above list of possible governance criteria might suggest that the governance component of ESG is more well-defined, I view the governance criteria as currently being perhaps the more challenging component of ESG because a large number of possible criteria can be identified but in practice the criteria that are recognized as being accepted tend to be less numerous, and as a group governance criteria still tend to be more vague, undefined and less agreed upon, and identification, evaluation and measurement of governance criteria also tend to vary more from organization and entity to organization and entity.

Best to you. David Tate, Esq. (and inactive CPA)

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Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this post. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only

Litigation, Disputes, Mediator & Governance: Business, Trust/Probate, Real Property, Governance, Elder Abuse, Investigations, Other Areas

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com

Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance and governance committee, responsibilities and rights, compliance, investigations, ESG + sustainability, and risk management  http://auditcommitteeupdate.com

My law practice primarily involves the following areas and issues:

Trust, Estate, Probate Court, Elder and Dependent Adult, and Disability Disputes and Litigation

  • Trust and estate disputes and litigation, and contentious administrations representing fiduciaries, beneficiaries and families; elder abuse; power of attorney disputes; elder care and nursing home abuse; conservatorships; claims to real and personal property; and other related disputes and litigation.

Business, Business-Related, and Workplace Disputes and Litigation: Private, Closely Held, and Family Businesses; Public Companies; Nonprofit Entities; and Governmental Entities

  • Business v. business disputes including breach of contract; unlawful, unfair and fraudulent business practices; fraud, deceit and misrepresentation; unfair competition; licensing agreements, breach of the covenant of good faith and fair dealing; etc.
  • Misappropriation of trade secrets.
  • M&A disputes.
  • Founder, officer, director and board, investor, shareholder, creditor, VC, control, governance, decision making, fiduciary duty, conflict of interest, independence, voting, etc., disputes.
  • Buy-sell disputes.
  • Funding and share dilution disputes.
  • Accounting, lost profits, and royalty disputes and damages.
  • Insurance coverage and bad faith.
  • Access to corporate and business records disputes.
  • Employee, employer and workplace disputes and processes, discrimination, whistleblower and retaliation, harassment, defamation, etc.

Investigations, Governance, Boards and Committees, Officers, and Responsibilities and Rights

  • Corporate, business, nonprofit and governmental internal investigations.
  • Board, audit committee, governance committee, and special committee governance and processes, disputes, conflicts of interest, independence, culture, ethics, compliance, ESG, sustainability, etc.; and advising audit committees, governance committees, officers, directors, and boards.

Mediator Services and Dispute Resolution

  • Trust, estate, elder and elder abuse, conservatorship, power of attorney, and other probate court cases.
  • Business: breach of contract.
  • Business: owner, founder, partner, shareholder, investor, board and committee, officer, and governance disputes.
  • Employment and workplace, discrimination, wrongful termination, and harassment.
  • Real estate.
  • Personal injury.
  • ADDITIONAL AREAS – ASK

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Regulation S-K Disclosure Of Human Capital Resources, By Hedley Lawson, Aligned Growth Partners, LLC – Including Tate Comments: Also Useful In Relation To “S” In ESG

The following is a link to an article by Hedley Lawson of Aligned Growth Partners discussing new SEC amendments to Regulation S-K and requiring disclosure of human capital resources measures and objectives that the company focuses on in managing its business:

I particularly note (and I have pasted below) the discussion wherein Hedley lists broad categories that should receive consideration while also recognizing that “each company will need to evaluate its own particular circumstances to identify its human capital resources and determine their materiality to an understanding of its business.” The categories are also helpful for consideration in the context of the employer and workforce component of the “S” (social) criteria in ESG (environmental, social and governance). The following are the broad categories that are listed in the article:

CATEGORY
POTENTIAL TOPICS
Workforce governance
· Board or committee oversight of human capital strategy
· Role and expectations of the Chief Human Resources Officer
· Legal and ethical compliance
Workforce composition
· Agile and transformational talent acquisition and recruiting
· Meaningful, measurable, and sustainable diversity, equity, and inclusion
· Experience and education of workforce
Workforce stability
· Voluntary and involuntary turnover analytics
· Actionable succession planning and employee promotability
· Meaningful employee satisfaction surveys
Workforce skills and development
· Professional and personal development opportunities
Workforce culture
· Employee engagement
· Work-life initiatives
· Employee health, safety, and well-being programs
· Employee recognition programs
Workforce compensation (in the absence of a Compensation Committee)
· Gender, racial, and generational pay equality
· Incentives and cash and non-cash benefits
· Targeted market compensation data and analysi
s

More to follow on these topics including human capital and ESG + Sustainability.

Best to you. David Tate, Esq.

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Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this post. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only

Litigation, Disputes, Mediator & Governance: Business, Trust/Probate, Real Property, Governance, Elder Abuse, Investigations, Other Areas

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com

Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance and governance committee, responsibilities and rights, compliance, investigations, ESG + sustainability, and risk management  http://auditcommitteeupdate.com

My law practice primarily involves the following areas and issues:

Trust, Estate, Probate Court, Elder and Dependent Adult, and Disability Disputes and Litigation

  • Trust and estate disputes and litigation, and contentious administrations representing fiduciaries, beneficiaries and families; elder abuse; power of attorney disputes; elder care and nursing home abuse; conservatorships; claims to real and personal property; and other related disputes and litigation.

Business, Business-Related, and Workplace Disputes and Litigation: Private, Closely Held, and Family Businesses; Public Companies; Nonprofit Entities; and Governmental Entities

  • Business v. business disputes including breach of contract; unlawful, unfair and fraudulent business practices; fraud, deceit and misrepresentation; unfair competition; licensing agreements, breach of the covenant of good faith and fair dealing; etc.
  • Misappropriation of trade secrets.
  • M&A disputes.
  • Founder, officer, director and board, investor, shareholder, creditor, VC, control, governance, decision making, fiduciary duty, conflict of interest, independence, voting, etc., disputes.
  • Buy-sell disputes.
  • Funding and share dilution disputes.
  • Accounting, lost profits, and royalty disputes and damages.
  • Insurance coverage and bad faith.
  • Access to corporate and business records disputes.
  • Employee, employer and workplace disputes and processes, discrimination, whistleblower and retaliation, harassment, defamation, etc.

Investigations, Governance, Boards and Committees, Officers, and Responsibilities and Rights

  • Corporate, business, nonprofit and governmental internal investigations.
  • Board, audit committee, governance committee, and special committee governance and processes, disputes, conflicts of interest, independence, culture, ethics, compliance, ESG, sustainability, etc.; and advising audit committees, governance committees, officers, directors, and boards.

Mediator Services and Dispute Resolution

  • Trust, estate, elder and elder abuse, conservatorship, power of attorney, and other probate court cases.
  • Business: breach of contract.
  • Business: owner, founder, partner, shareholder, investor, board and committee, officer, and governance disputes.
  • Employment and workplace, discrimination, wrongful termination, and harassment.
  • Real estate.
  • Personal injury.
  • ADDITIONAL AREAS – ASK

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New Fiduciary Duty In The 21st Century: California Roadmap Paper – Regarding ESG

I have provided below a link to a pdf of a new paper (September 2020) that is written as “the result of a collaboration between the PRI and the Climate Risk Initiative at UC Berkeley School of Law’s Center for Law, Energy & the Environment.” The UNEP Finance Initiative also appears to be an author or sponsor.

The paper and its recommendations are not law. However, the paper is potentially (i.e., appears to be) more than simply discussion when you view the Acknowledgements (page 4) and the Forwards (pages 5-7).

The paper contains 40 recommendations in 7 categories which encourage California to enact legislation and/or regulations that require ESG standards or processes and disclosures for the listed entities and organizations.

I will not be spending much time on this paper for the reason that as a general rule I don’t spend much time on discussion papers that are not proposed or actual legislation, regulations or rules. However, I am mentioning this paper because I am presuming that it was written with at least some buy-in from other people who have the authority to make some or all of the provisions enforceable by law. And I note that at page 26, under the heading “Challenges” with respect to ESG integration, the paper notes “A lack of consistent, comparable, robust, and widely available ESG data . . . ,” and the paper also does contain the 40 specific recommendations many of which relate to statutes (law) or regulations (also law).

One additional comment about the paper and ESG standards, while the paper in part discusses legislation to require and mandate that certain non-governmental businesses implement certain ESG standards and reporting or disclosure, the paper also discussed or provides ESG recommendations for governmental organizations in California – for which I presume that ESG standards and reporting (i.e., standards and reporting for governmental entities and organizations) could be ordered or required immediately or relatively easily right now – thus, one approach would be for governmental entities and organizations to lead the way by example.

The following is a link to the paper:

Best to you. David Tate, Esq.

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Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this post. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only

Litigation, Disputes, Mediator & Governance: Business, Trust/Probate, Real Property, Governance, Elder Abuse, Investigations, Other Areas

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com

Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance and governance committee, responsibilities and rights, compliance, investigations, ESG, and risk management  http://auditcommitteeupdate.com

My law practice primarily involves the following areas and issues:

Trust, Estate, Probate Court, Elder and Dependent Adult, and Disability Disputes and Litigation

  • Trust and estate disputes and litigation, and contentious administrations representing fiduciaries, beneficiaries and families; elder abuse; power of attorney disputes; elder care and nursing home abuse; conservatorships; claims to real and personal property; and other related disputes and litigation.

Business, Business-Related, and Workplace Disputes and Litigation: Private, Closely Held, and Family Businesses; Public Companies; Nonprofit Entities; and Governmental Entities

  • Business v. business disputes including breach of contract; unlawful, unfair and fraudulent business practices; fraud, deceit and misrepresentation; unfair competition; licensing agreements, breach of the covenant of good faith and fair dealing; etc.
  • Misappropriation of trade secrets.
  • M&A disputes.
  • Founder, officer, director and board, investor, shareholder, creditor, VC, control, governance, decision making, fiduciary duty, conflict of interest, independence, voting, etc., disputes.
  • Buy-sell disputes.
  • Funding and share dilution disputes.
  • Accounting, lost profits, and royalty disputes and damages.
  • Insurance coverage and bad faith.
  • Access to corporate and business records disputes.
  • Employee, employer and workplace disputes and processes, discrimination, whistleblower and retaliation, harassment, defamation, etc.

Investigations, Governance, and Responsibilities and Rights

  • Corporate, business, nonprofit and governmental internal investigations.
  • Board, audit committee, governance committee, and special committee governance and processes, disputes, conflicts of interest, independence, culture, ethics, etc.; and advising audit committees, governance committees, officers, directors, and boards.

Mediator Services and Dispute Resolution

* * * * *

New ESG/SDGs Metrics From International Business Council (IBC) of the World Economic Forum (WEF)

The following is a link to a pdf of Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation (a 96 page paper):

The paper, which was published in September 2020, is a project of the International Business Council (IBC) of the World Economic Form (WEF) in collaboration with Deloitte, EY, KPMG and PwC. I believe that this is the first time that the Big 4 have gotten together in an effort to develop ESG and sustainability standards.

The paper defines the finished project as follows: “This work defines a core set of “stakeholder Capitalism Metrics” (SCM) and disclosures that can be used by IBC members to align their mainstream reporting on performance against environmental, social and governance (ESG) indicators and track their contributions towards the SDGs [UN Sustainable Development Goals] on a consistent basis.”

The paper and its ESG metrics are based on four pillars:

Pillar 1: Principles of Governance;

Pillar 2: Planet;

Pillar 3: People; and

Pillar 4: Prosperity.

This paper is a good initial effort to define measurable standards and metrics. In light of the authors and contributors this paper and its further related amendments, tweaks, and discussions will become a direct standard for IBC members, and some parts of it will become indirect or voluntary standards for some other organizations.

Many provisions in the paper are heavily focused on GRI (Global Reporting Initiative) standards. Thus, for example, the paper does not focus on SASB (Sustainability Accounting Standards Board) standards. You might also be aware that the SASB and the IIRC (International Integrated Reporting Council) announced on November 25, their intent to merge into a unified organization “in major step towards simplifying the corporate reporting system.” A lot of significant developments and changes are occurring in the ESG and sustainability areas.

As the IBC/Big-4 paper is heavily focused on GRI standards, and UN Sustainable Development Goals, it is or will be relevant or more relevant for US corporations that operate internationally. The extent, if any, to which select provisions in the paper are made applicable to US corporations and/or other organizations what operate solely or primarily domestically in the US is yet to be seen.

Best to you. David Tate, Esq.

——————————————————————–

Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this post. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only

Litigation, Disputes, Mediator & Governance: Business, Trust/Probate, Real Property, Governance, Elder Abuse, Investigations, Other Areas

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com

Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance and governance committee, responsibilities and rights, compliance, investigations, and risk management  http://auditcommitteeupdate.com

My law practice primarily involves the following areas and issues:

Trust, Estate, Probate Court, Elder and Dependent Adult, and Disability Disputes and Litigation

  • Trust and estate disputes and litigation, and contentious administrations representing fiduciaries, beneficiaries and families; elder abuse; power of attorney disputes; elder care and nursing home abuse; conservatorships; claims to real and personal property; and other related disputes and litigation.

Business, Business-Related, and Workplace Disputes and Litigation: Private, Closely Held, and Family Businesses; Public Companies; Nonprofit Entities; and Governmental Entities

  • Business v. business disputes including breach of contract; unlawful, unfair and fraudulent business practices; fraud, deceit and misrepresentation; unfair competition; licensing agreements, breach of the covenant of good faith and fair dealing; etc.
  • Misappropriation of trade secrets.
  • M&A disputes.
  • Founder, officer, director and board, investor, shareholder, creditor, VC, control, governance, decision making, fiduciary duty, conflict of interest, independence, voting, etc., disputes.
  • Buy-sell disputes.
  • Funding and share dilution disputes.
  • Accounting, lost profits, and royalty disputes and damages.
  • Insurance coverage and bad faith.
  • Access to corporate and business records disputes.
  • Employee, employer and workplace disputes and processes, discrimination, whistleblower and retaliation, harassment, defamation, etc.

Investigations, Governance, and Responsibilities and Rights

  • Corporate, business, nonprofit and governmental internal investigations.
  • Board, audit committee, governance committee, and special committee governance and processes, disputes, conflicts of interest, independence, culture, ethics, etc.; and advising audit committees, governance committees, officers, directors, and boards.

Mediator Services and Dispute Resolution

* * * * *

CAQ calls for ESG standards and frameworks – my view: start small and reasonably certain, but just get started now, and then move forward from there . . . .

David W. Tate, Esq., San Francisco and California – dave@tateattorney.com

I have written about ESG in prior posts. The Center for Audit Quality has now also called for the development of standards and frameworks that present ESG, and, presumably will allow (and lead to?) the auditing of ESG.

In one form or another ESG and concepts similar or relating to ESG have been discussed for years – for how many years, I don’t know, maybe 10, or 20, or 30 years in one form or another.

And it is entirely possible that these concepts will be discussed but will remain in some form of limbo for another 5 to 10 years, or longer. Or, ESG, including the auditing of ESG can start essentially immediately.

Standards exist already.

When you are looking at auditing or an audit you naturally can get into discussions about numbers or amounts that are presented on the financial statements, or notes to the financial statements, or management’s discussion and analysis, and for public companies (of which size?), private businesses (of which status and size – family owned, pre-IPO, small, mid-, or large, or simply regular closely held, etc.), nonprofits, and governmental entities, etc. As the CAQ mentions, you can also get into jurisdictional scope issues, such as statewide, countrywide, or worldwide, etc., standards.

In concept, anything and everything can be discussed, disclosed, and audited. Here’s my recommendation: start small and reasonably certain, but just get started now, and then move forward from there . . . .

I view this from an “A,” “B,” “C” approach (similar to how I view evidence in a case). “A” – this is what you already have in hand. “B” – this is what you reasonably believe exists, and that you reasonably believe you can obtain from a specifically identifiable source, but that you do not now have. “C” – this is essentially uncertain or speculative – it might well exist or should exist but don’t count on getting it.

For ESG, start with standards that exist that generally are recognized by the most influential stakeholders or authorities within a jurisdictional location whether it be local, statewide, countrywide or worldwide. Currently you might only have 8-10 “A” generally recognized standards for “E” environmental, 6-7 “A” standards for “S” social, and 3-4 “A” standards for “G” governance – and that’s fine. ESG will be developing and changing for the next 100+ years. The point is to get going with this, now, and it is possible to do so.

The following is a partial snapshot from the CAQ online discussion.

Best to you, Dave Tate, Esq. (San Francisco and California) – dave@tateattorney.com

Litigation, Governance, Administrations, Investigations, Mediator & Conflict Resolution

Mediation and Conflict Resolution Hexagon Matrix to Help Achieve Resolution and Settlement – Dave Tate, Esq.

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Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this post. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only.

I am also the Chair of the Business Law Section of the Bar Association of San Francisco.

Blogs

Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com

Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance and governance committee, responsibilities and rights, compliance, investigations, and risk management  http://auditcommitteeupdate.com

My law practice primarily involves the following areas and issues:

Trust, Estate, Probate Court, Elder and Dependent Adult, and Disability Disputes and Litigation

      • Trust and estate disputes and litigation, and contentious administrations representing fiduciaries, beneficiaries and families; elder abuse; power of attorney disputes; elder care and nursing home abuse; conservatorships; claims to real and personal property; and other related disputes and litigation.

Business, Business-Related, and Workplace Disputes and Litigation: Private, Closely Held, and Family Businesses; Public Companies; Nonprofit Entities; and Governmental Entities

      • Business v. business disputes including breach of contract; unlawful, unfair and fraudulent business practices; fraud, deceit and misrepresentation; unfair competition; licensing agreements, breach of the covenant of good faith and fair dealing; etc.
      • Misappropriation of trade secrets.
      • M&A disputes.
      • Founder, officer, director and board, investor, shareholder, creditor, VC, control, governance, decision making, fiduciary duty, conflict of interest, independence, voting, etc., disputes.
      • Buy-sell disputes.
      • Funding and share dilution disputes.
      • Accounting, lost profits, and royalty disputes and damages.
      • Insurance coverage and bad faith.
      • Access to corporate and business records disputes.
      • Employee, employer and workplace disputes and processes, discrimination, whistleblower and retaliation, harassment, defamation, etc.

Investigations, Governance, and Responsibilities and Rights

      • Corporate, business, nonprofit and governmental internal investigations.
      • Board, audit committee, governance committee, and special committee governance and processes, disputes, conflicts of interest, independence, culture, ethics, etc.; and advising audit committees, governance committees, officers, directors, and boards.

Mediator Services and Conflict Resolution

* * * * *

If California Government, Nonprofits, And Education Are Leaders In ERM, Governance, And ESG, Others Will Follow

I ask, what would happen if California government, nonprofits, and education adopted, implemented, and embraced in their operations ERM (enterprise risk management), governance, and ESG (environment, social, and governance) practices, and openly discussed and disclosed their practices? People would notice and follow. For the purpose of this discussion I have noted California government, nonprofits, and education because it seems that at times or for certain issues people who are involved in these activities or positions already are concerned about or are interested in ERM, governance, and ESG. Waiting for public and private businesses, and possibly their auditors, to be induced or possibly compelled into these practices by statute, regulation, or rule is not the only option. Lead and others will follow. For example, we already have criteria or standards for:

– Risk management and ERM (consider as guidance, e.g., materials from COSO (the Committee of Sponsoring Organizations of the Treadway Commission); ISO (the International Organization for Standardization); and other guidance, etc.);

– ESG (consider as guidance, e.g., materials from the SASB (Sustainability Accounting Standards Board); and other guidance, etc.); and

– Governance (consider as guidance, e.g., the above guidance; applicable statutes, regulations and rules; court case precedence; the business judgment rule; and materials from the SEC and the stock exchanges; and other guidance, etc.).

The opportunities and the solutions to move these practices forward already currently are and have been at-hand – California (elected offices and representatives, and departments), nonprofits, and education can lead by example, and others will follow. See also below re ERM and COSO, audit committees, and investigations. Dave Tate, Esq. (and California CPA, inactive). San Francisco and California.

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Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this website. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only.

I am also the new Chair of the Business Law Section of the Bar Association of San Francisco.

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com; Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance, responsibilities and rights, compliance, investigations, and risk management  http://auditcommitteeupdate.com

The following are copies of the tables of contents of three of the more formal materials that I have written over the years about accounting/auditing, audit committees, and related legal topics – Accounting and Its Legal Implications was my first formal effort, which resulted in a published book that had more of an accounting and auditing focus; Chapter 5A, Audit Committee Functions and Responsibilities, for the California Continuing Education of the Bar has a more legal focus; and the most recent Tate’s Excellent Audit Committee Guide (February 2017) also has a more legal focus:

Accounting and Its Legal Implications

Chapter 5A, Audit Committee Functions and Responsibilities, CEB Advising and Defending Corporate Directors and Officers

Tate’s Excellent Audit Committee Guide

The following are other summary materials that you might find useful:

OVERVIEW OF A RISK MANAGEMENT PROCESS THAT YOU CAN USE 03162018

Audit Committee 5 Lines of Success, Diligence, and Defense - David Tate, Esq, 05052018

COSO Enterprise Risk Management Framework ERM Components and Principles

From a prior blog post which you can find at https://wp.me/p75iWX-dk if the below scan is too difficult to read:

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ESG – SEC Commissioner Comments – And Who At Your Board Has Oversight?

Is ESG, or some version of it here to stay? There isn’t agreement on this. My view is that, yes, ESG or some version of it is here and will remain, either by market forces and expectations, or by statute, regulation or rule. However, for example, click on the following link to a recent June 18, 2019, speech by SEC Commissioner Peirce and her discussion and some criticism of ESG – https://www.sec.gov/news/speech/speech-peirce-061819. If you follow ESG developments you already know that ESG or aspects of it and related disclosures are slowly being mandated internationally, while in the U.S. market forces and expectations are more at play.

My view also is that at least some of ESG is already covered by risk management or enterprise risk management. “Environmental,” yes that’s a risk management issue. “Social,” yes certain aspects of “social” are or can be risk management issues, including, for example, culture, reputation, and perhaps some aspects of safety. “Governance,” yes that’s a risk management issue. But I agree with the comments or criticisms or warnings of the risk that under the heading of ESG, or risk management, or enterprise risk management, or sustainability, or corporate social responsibility, and the list goes on, anyone could at least argue that their particular special or particular interest fits somewhere under those headings, and that business or a particular business must take action with respect to that particular special or particular interest. The ability to make such an argument also has increased exponentially, and we are seeing it played out, as everyone has or can have an opinion on anything and everything through social media and other opportunities.

So . . . my view is that one way or another these issues are here to stay, and management must address and deal with them as appropriate for each individual business (and the industry in which the business operates). You can also see in the news that by different means different businesses are dealing with or handling these issues, and the ways of doing so will continue to develop.

One might ask, within a particular business (because businesses are separate and individual and should not be lumped as a whole), are there people at the board level who are exercising some oversight of the business’s procedures and processes for handling ESG or aspects of ESG, or risk management or enterprise risk management over environmental, social and governance matters?

People should remember, or should learn, that for most but not all matters, issues and tasks the board’s role is oversight not day-to-day management or involvement, such as, for example, under the business judgment rule. See my prior post with business judgement rule slides at https://wp.me/p75iWX-fm. But director proxy voting recommendations are also becoming more widely disseminated and vocalized about individual directors.

With respect to risk management, the board often delegates to the audit committee the initial oversight of risk management. However, my view is that any committee to which risk management is delegated should still report to the board about its oversight and what it has found, done, and recommended in that regard, and that oversight of overall risk management remains as a board-level matter. See also various stock exchange rules and auditing pronouncements referring and relating to audit committee, or board involvement in the oversight of risk management.

Board and audit committee responsibilities and potential new responsibilities, or at least what some people are arguing those responsibilities should be, also have increased and are greatly increasing. Risk management isn’t new, although what should or might be done to oversee risk management or enterprise risk management is still developing. For the most part, ESG as possibly a separately recognized item is new – and I would argue that “ESG” as a recognized item is vague and ambiguous because there is no agreement about just what criteria or items comprise ESG. I would also suggest that even if it is not specifically legally required, the board and/or its delegated committee should begin, if they don’t already do so, exercising appropriate oversight of management’s procedures and processes relative to ESG and if not of ESG then certainly risk management or enterprise risk management relative to appropriate environmental, social, and governance matters.

These certainly are developing areas of law and possible responsibilities.

Every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this website. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only.

I am also the new Chair of the Business Law Section of the Bar Association of San Francisco.

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com; Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance, responsibilities and rights, compliance, investigations, and risk management  http://auditcommitteeupdate.com

The following are copies of the tables of contents of three of the more formal materials that I have written over the years about accounting/auditing, audit committees, and related legal topics – Accounting and Its Legal Implications was my first formal effort, which resulted in a published book that had more of an accounting and auditing focus; Chapter 5A, Audit Committee Functions and Responsibilities, for the California Continuing Education of the Bar has a more legal focus; and the most recent Tate’s Excellent Audit Committee Guide (February 2017) also has a more legal focus:

Accounting and Its Legal Implications

Chapter 5A, Audit Committee Functions and Responsibilities, CEB Advising and Defending Corporate Directors and Officers

Tate’s Excellent Audit Committee Guide

The following are other summary materials that you might find useful:

OVERVIEW OF A RISK MANAGEMENT PROCESS THAT YOU CAN USE 03162018

Audit Committee 5 Lines of Success, Diligence, and Defense - David Tate, Esq, 05052018

COSO Enterprise Risk Management Framework ERM Components and Principles

From a prior blog post which you can find at https://wp.me/p75iWX-dk if the below scan is too difficult to read:

* * * * *