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The Morning Risk Report: Fitch’s Chief Risk Officer on Crisis-Era Lessons and Future Plans
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Eileen Fahey, chief risk officer for Fitch Group. PHOTO: FITCH GROUP
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Good morning. At Fitch Group Inc., the chief risk officer role is a relatively new position in the C-suite. Since taking on the role in 2017, Eileen Fahey has expanded its influence.
Ms. Fahey, a 20-year veteran of Fitch, is just the second person to hold the position since the company created it in 2015. She has taken steps during the past two years to protect the company—best known for its credit ratings division—from cyber threats, having recently kicked off a search for its first chief information security officer.
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That cybersecurity tops her agenda is a sign that reputational challenges facing the credit ratings business have subsided since the financial crisis. Fitch and its biggest competitors, such as Moody’s Corp. and S&P Global Inc., were criticized in the aftermath of the subprime mortgage meltdown for misrepresenting the underlying risks of mortgage bonds.
There are more opportunities to strengthen internal controls at Fitch, Ms. Fahey said in an interview with Risk & Compliance Journal’s Kristin Broughton, particularly as the company looks to expand its businesses that focus on research and training.
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Study Shows Policy Efforts May Help Boost Returns
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Informing your employees about workplace policies can be good for business, according to new research analyzing the practices of America's 890 largest, publicly traded companies.
Employers that disclosed detailed information about workplace policy and efforts on issues like pay equity saw higher returns, according to the research, which was conducted by JUST Capital, a nonprofit organization tracking business behavior.
Among the 7% of firms that made the results of their gender pay equity analyses public, for example, the study found a median five-year return-on-equity advantage of 3%.
Similarly, among firms studied, the 11% of companies that disclosed their diversity and equal opportunity targets saw a return-on-equity boost of 2.4%. Likewise, the 28% of companies offering detailed parental leave policies saw an return-on-equity bump of 2.2%.
—Te-Ping Chen
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Theranos founder Elizabeth Holmes as she left U.S. District Court in San Jose, Calif., on Monday. She faces 20 years in prison and a fine of more than $2 million. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Lawyers for Theranos Inc. founder Elizabeth Holmes on Monday fought off efforts by the U.S. government to set a trial date as the two sides argued over the enormity of evidence involved in the case and the difficulty in lining up high-profile witnesses. Ms. Holmes and her former deputy, Ramesh “Sunny” Balwani, who both appeared in court on Monday, were charged last year with lying to doctors and patients about their blood-testing startup’s test results and misleading investors about the company’s financial health. In addition to 20 years in prison, they face fines of more than $2 million apiece, as well as additional restitution to victims.
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The Supreme Court will hear three cases concerning whether gay and transgender people are protected from discrimination on the job, marking the first major LGBT rights issue to reach the court since its 2015 opinion legalizing same-sex marriage.
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The Trump Organization on Monday filed a lawsuit against the Democratic chairman of the House Oversight Committee and the accounting firm Mazars USA LLP, seeking a court order to block a subpoena the panel filed last week against the company for eight years’ worth of President Trump’s financial statements.
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Waivers granted to countries including China, India and Turkey allowing imports of Iranian oil will end May 2, Secretary of State Mike Pompeo said. PHOTO: ALEX WROBLEWSKI/BLOOMBERG NEWS
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Oil prices surged to a nearly six-month high after the Trump administration said it would end waivers that allow countries to import Iranian oil, part of a U.S. campaign to deprive Iran of a major source of revenue. Monday’s swift market reaction, coupled with stern objections from at least two countries—China and Turkey—that will be adversely affected, ran counter to Trump administration assurances that its latest move against Iran would have relatively few broad international repercussions.
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Samsung Electronics Co. delayed the rollout of its Galaxy Fold because of technical problems just days ahead of its planned launch, a blow to the hardware giant and its hopes for a product it billed as one of the smartphone market’s biggest innovations in years. The Galaxy Fold, the industry’s first mainstream foldable-screen device, was slated to reach shelves in the U.S. on Friday, priced at nearly $2,000. But problems with phones being used by reviewers prompted Samsung to push off the debut, the company said Monday, adding that it plans to make public a new release date in the coming weeks.
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Facebook named Jennifer Newstead as its general counsel on Monday, putting a longtime Washington attorney in charge of its legal affairs at a time when it is increasingly engaged with regulators about how best to police social media. PHOTO: PIROSCHKA VAN DE WOUW/REUTERS
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Facebook Inc. is bringing on a new top lawyer and a communications boss to handle the mounting regulatory and public-relations issues facing the social-media giant.
The company named Jennifer Newstead as its general counsel on Monday, putting a longtime Washington attorney in charge of its legal affairs at a time when it is increasingly engaged with regulators around the world about how best to police social media.
John Pinette, who previously advised Microsoft Corp. co-founder Bill Gates among other jobs, was separately named Facebook's new vice president of global communications.
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Bed Bath & Beyond said it will form a strategic-review committee to evaluate the whole business. PHOTO: LOGAN CYRUS/BLOOMBERG NEWS
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Bed Bath & Beyond is overhauling its board of directors and pledged to review operations amid a proxy battle with a group of activist investors who have called for changes to the company’s management ranks and business. The home-goods retailer said five independent directors will step down and be replaced. The transformed board, which will comprise 10 directors instead of the 12 currently on the panel, will reflect significant diversity across race, gender, and ethnicity, the company said.
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PG&E Corp. on Monday settled a dispute with an activist investor by restructuring its board to include another director with utility experience, and adding a safety specialist to advise its chief executive. The company said former utilities executive Fred Buckman will replace former chairman Richard Kelly, who has resigned from the board. Chris Hart, former chairman of the National Transportation Safety Board, will serve as a special adviser to incoming chief executive Bill Johnson.
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MDC Partners Inc. settled a monthslong spat with hedge fund FrontFour Capital Group LLC, saying it would nominate two new members to its board of directors. The advertising firm said it would include one of FrontFour’s nominees, Kristen O’Hara, on its slate of directors for election at an annual meeting in June.
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Critics of Walt Disney Co. Chief Executive Robert Iger’s compensation have gained a prominent ally: an heiress to the fortune of the company’s eponymous founder. At an event last week and in a series of Twitter posts, Abigail Disney, a great niece of Walt Disney and granddaughter of his brother and company co-founder Roy O. Disney, characterized Mr. Iger’s most recent $65 million pay package as a flagrant example of the bulk of corporate profits going to the wrong employees.
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Kraft Heinz Co. named a new chief executive, appointing a fellow veteran manager of companies backed by investment firm 3G Capital LLC to succeed Bernardo Hees amid weak sales and a federal investigation into the food giant’s procurement practices. Miguel Patricio, the former chief marketing officer of brewer Anheuser-Busch InBev SA, where 3G is also a top investor, will succeed Mr. Hees as chief executive on July 1, Kraft said Monday. Kraft hadn’t previously unveiled a planned executive change or a succession plan.
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PHOTO: LUCAS JACKSON/REUTERS
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Morgan Stanley has set up a “data center of excellence” to help address the ongoing deluge and complexity of enterprise data and to help develop artificial-intelligence applications that rely on high-quality data. As companies look to supercharge corporate decision-making through AI, they first need help preparing the troves of customer and business data they have acquired over the years.
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Procter & Gamble Co., seeking to prove that the consumer-products giant hasn’t lost its touch, has developed a way to make laundry detergent, hand soap and shampoo without a key ingredient: water.
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