Does your government’s sustainability policy encourage and support businesses and jobs to start and stay?

Reading through a few of the local county and California sustainability policy statements, I’m not seeing policies or processes to encourage and support businesses and jobs to start and stay. Without jobs and businesses you lose your economy, people, and tax revenues to other locations. If you lose enough of them, other sustainability efforts will suffer or fail.

Below is an example of one county’s overview of its sustainability policies and efforts. No mention of businesses. Some government sustainability policies do mention businesses; however, in most or many of those circumstances the emphasis is limited to having or forcing the businesses comply with the other sustainability policies and areas – in other words, not an effort to encourage and support businesses and jobs to start and stay.

I have a different view – in addition to the environment, transportation, housing, and other areas, all of which I encourage, a government’s sustainability, ESG, and enterprise risk management (ERM) policies and efforts should specifically include encouraging and supporting businesses and jobs to start and stay.

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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 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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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:

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