Cyber, Data Privacy, Diversity Top List of Risky Concerns for General Counsel This Year
Lori Zyskowski, a partner in the New York office of Gibson, Dunn & Crutcher, recently spoke with Corporate Counsel about the trends she sees and the challenges they present for general counsel in 2020.
January 27, 2020 at 04:46 PM
4 minute read
Corporations in America entered a new decade facing several heightened risks in finance, securities and corporate governance that should concern general counsel, says attorney Lori Zyskowski.
Zyskowski is a partner in the New York office of Gibson, Dunn & Crutcher and is co-chairwoman of its securities regulation and corporate governance practice. She also has a perspective gained from 13 years working in-house at major companies, including most recently as executive counsel for corporate, securities and finance at General Electric Co.
Zyskowski recently spoke with Corporate Counsel about the trends she sees and the challenges they present for general counsel in 2020. Here are excerpts from that conversation, edited for clarity and brevity.
Corporate Counsel: What are some of the top trends you see in terms of securities enforcement that impacts the job of the general counsel?
Lori Zyskowski: One trend we are seeing is a significant focus on cyber-related misconduct. It's important for general counsel to be very concerned about this. Not only could their companies be a victim of cyber misconduct, but also because actors around them may have liability issues.
In addition, the [U.S. Securities and Exchange Commission's] division of enforcement teams seem to be focusing more on cyber-related financial fraud. Enforcement is also focusing on investment advisers. This SEC is trying to benefit Main Street investors. It is very much looking at advisers who may have conflicts of interests or are not acting in best interests of retail investors.
CC: What can general counsel be doing in this area?
LZ: Cyber and data privacy are among the top risks, especially with all the uncertainty still around the new California privacy act [the California Consumer Privacy Act went into effect Jan. 1, though its final regulations won't be finalized until July. As risks continue to change, it's important to do tabletop exercises, for example, in the event of a breach. Companies must continually be reevaluating what is needed.
And the board's oversight of risk is another area. Just make sure that the company has an appropriate process around overseeing risk.
CC: You mentioned there were several heightened risks. What's another area?
LZ: A very big focus for many general counsel in the coming year is ESG [environment, social and governance] and sustainability. ESG is just such an important lens to look at how companies do business. It includes human capital management [for example, workforce diversity and gender pay equity]. And it includes climate change.
There was [BlackRock Inc. CEO] Larry Fink's recent letter to CEOs urging improved disclosure for shareholders on climate change and on sustainability. BlackRock is changing how it does investments, making sustainability the center. Fink recommended that companies look to the Sustainability Accounting Standards Board and to the Task Force on Climate-Related Financial Disclosures. BlackRock will be looking for companies that align their disclosures to the standards of both.
CC: How important are diversity issues in the coming year?
LZ: More diversity continues to be something very important. We are starting to see reporting requirements around board makeup. California has a law requiring a certain number of female directors while other states, like New York, are requiring reports on board diversity. Institutional investors are very focused on these disclosures as well, as are proxy advisory companies.
CC: Is there any other risk area you'd like to mention?
LZ: I think audit committee oversight. The SEC in December issued a reminder to audit committees on what they should be focused on, such as auditor independence, generally accepted accounting practices and substantial engagement with the auditor on critical audit matters, or so-called CAMS. The fiscal year ended in December is first time these CAMS will be reflected in audit reports. It's important that general counsel understand what these CAMS are and make sure that the audit committee has a process to evaluate them. I spoke more about this last week as part of a Gibson Dunn panel on the 16th Annual Challenges in Compliance and Corporate Governance.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllTrump Mulls Big Changes to Banking Regulation, Unsettling the Industry
SEC Issues $6.75M Fine Against Financial Firm Led by Trump's Choice to Lead Commerce Dept.
3 minute readAs AI-Generated Fraud Rises, Financial Companies Face a Long Cybersecurity Battle
CFPB Orders Big Banks to Limit Overdraft Fees to $5. But Will Its Edict Stick?
3 minute readTrending Stories
- 1Call for Nominations: Elite Trial Lawyers 2025
- 2Senate Judiciary Dems Release Report on Supreme Court Ethics
- 3Senate Confirms Last 2 of Biden's California Judicial Nominees
- 4Morrison & Foerster Doles Out Year-End and Special Bonuses, Raises Base Compensation for Associates
- 5Tom Girardi to Surrender to Federal Authorities on Jan. 7
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250