Corporate Governance
Regulatory matters
A board director recently asked a Washington regulator, “We are already investing extraordinary amounts in order to comply with government regulation. Just how much is enough?”
In the wake of the global economic crisis, G-20 nations worked to stabilize and stimulate their economies and repair the global financial system through government intervention and financial regulation. The G-20 has also adopted a broader policy agenda that includes anti-corruption efforts, energy security, and climate change, as well as efforts to integrate global accounting standards.
Across the industry spectrum, directors worry about what some call “regulatory risk.” For example:
- Companies doing business in the United States now have to worry about more aggressive enforcement from the SEC and DOJ, new whistleblower rules that undermine corporate compliance programs, and more greenhouse gas and other environmental rules from the EPA.
- Companies doing business in the UK and Europe face the UK Bribery Act 2011, the possibility that the European Parliament may pass laws seeking to change the dynamics of and regulate the audit market, and an EU emissions trading scheme and revised Waste Framework Directive that force companies to address their environmental impact.
Tapestry’s corporate governance networks provide board directors with a unique opportunity to engage with government officials and regulators to discuss increased government intervention and how to respond. Engagement benefits both parties: government officials are able to better understand the views of directors; and directors are able to ask questions about how their companies can work effectively with regulators, what is considered best practice, and how boards should adapt their oversight.
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