Applying ERM to ESG – COSO and WBCSD Draft Guidance

I have provided below (at the bottom of this post) a link to new draft guidance for applying enterprise risk management (ERM) and the new COSO (Committee of Sponsoring Organizations of the Treadway Commission) 2017 ERM framework to environmental, social and governance (ESG) risks. The draft guidance is prepared by COSO and the World Business Council for Sustainable Development (WBCSD). The draft guidance is provided for comment, and it rather lengthy.

Usually I do not comment about drafts or proposals; however, I find this draft and approach very interesting. I’m also awaiting the update of ISO 31000 to see how these and similar topics are covered.

All of this having been said, and as I have previously stated, I believe that people and businesses generally only undertake activities of this type (i.e., ERM and ESG) if they are legally required to do so such as by law, statute, regulation or rule, or if it becomes sufficiently expected or advocated that they will do so by influential people, groups or organizations such as by investors, creditors, executive officer or board member groups or organizations, or other stakeholders.

At this point it is established that the board must oversee risk management and in many organizations the audit committee is involved in that oversight, there are a number of reporting or disclosure requirements for risk management, ESG, or environmental matters, and there are laws at least relating to environmental contamination. I certainly expect that requirements in these areas will be increasing over time – the question is how quickly that will occur. Please see my other posts on risk management and ERM and related topics including the 2017 COSO ERM framework and its provisions relating to culture and governance.

David Tate, Esq.

Here is the link to the draft COSO and WBCSD ERM and ESG guidance,

Click to access COSO-WBCSD-Release-New-Draft-Guidance-Online-viewing.pdf



Forwarding Post By Norman Marks – Its Not About Risk Management, It’s About Managing The Achievement Of Objectives To Be Successful

Below I have provided a link to a new blog post by Norman Marks, in which Norman discusses . . . it’s not about risk management . . . it’s about managing the achievement of objectives . . . it’s about being successful . . . success is measured through the achievement of specified objectives. This is a good post by Norman. Read it. Let me also add – however, although it is about achieving objectives . . . “risk management” or “enterprise risk management” is the accepted terminology.

David Tate, Esq.

Here’s the link to Norman’s blog post,


Unlawful to Terminate Employee for Political Activities?

You may have heard about the recently filed lawsuit against Google in which it is alleged that Google terminated the employment of an employee for his political viewpoint comments that he made over a company internal communications network. So you might wonder, are or can political comments be protected speech in the workplace environment? The answer is yes, they can be. See below California Labor Code §§1101 and 1102.

However, whether or not a comment or activity constitutes a political comment or activity is a question of fact that depends on the facts of the particular situation, even if the comment or activity qualifies as “political” in nature, again, depending on the facts and circumstances of the particular situation, the comment or activity might still be unprotected based on other factors, and the employer may also have a defense if the termination was because of or justified for some other legally legitimate or permissible reason.

There are relatively few cases that interpret §§1101 and 1102, or what comments or activities are “political” in nature.

Best to you, David Tate, Esq.

For your additional information, California Labor Code §§1101 and 1102 state as follows:

1101. Political activities of employees; prohibition of prevention or control by employer

No employer shall make, adopt, or enforce any rule, regulation, or policy:

(a) Forbidding or preventing employees from engaging or participating in politics or from becoming candidates for public office.

(b) Controlling or directing, or tending to control or direct the political activities or affiliations of employees.

1102. Coercion or influence of political activities of employees

No employer shall coerce or influence or attempt to coerce or influence his employees through or by means of threat of discharge or loss of employment to adopt or follow or refrain from adopting or following any particular course or line of political action or political activity

* * * * *

Coming Soon – Updated ISO 31000 Risk Management

I’m forwarding along a discussion about the expected update of ISO 31000 Risk Management. Similar to posts that I have been doing for the recently updated COSO ERM framework, I will be adding ISO 31000 to the discussions when the update arrives. 2017 and 2018 are looking like important years for the development and improvement of risk management and ERM for officers, directors (and audit and risk committees), managers, elected representatives, and suppliers, and throughout the entire entity or organization. On this blog you will also find earlier, but recent, posts where I have been discussing the new COSO ERM framework. I particularly like the culture and governance category which was added as the first category for consideration.

Click on the following link for the discussion about the expected update of ISO 31000

Best to you, David Tate, Esq.

From Scott Moritz of Protiviti – Measuring Ethical Culture Tapping Open Secrets

I am forwarding an article by Scott Moritz of Protiviti (click the link below), discussing ethical culture surveys, which are in vogue now, but might not be soon when they are no longer the center of attention. In his short article Mr. Moritz does capture the importance of a well-drafted survey to gather information and to help demonstrate employer interest in the topic. I suggest that the board also sponsor the survey – in my view, as a general matter boards should be more visible on important topics, such as the entity’s culture. “Tone at the top” and “visibility,” you know?

Mr. Moritz’ article doesn’t go into the detail of preparing a well-drafted survey – I would like to see an open discussion, and specific examples, about well-drafted ethical culture surveys so that everyone can get onboard, now and continuing in the future.

Here is the link to Mr. Moritz’s article:

Best to you, David Tate, Esq.

New Required Workplace Poster Re Transgender Rights – Business Culture & Compliance

I have pasted below copies of the press release from the California Department of Fair Employment & Housing, and the related required workplace poster for transgender rights, which employers are required to post beginning January 1, 2018. Officers, directors, managers, employees, contractors, third parties, etc., should consider transgender rights part of work place culture, in addition to satisfying compliance requirements. Best to you, David Tate, Esq.


Workplace Harassment – What Are The Legal Standards – Do People Really Know What They Are Talking About?

Workplace harassment – its in the news, a lot, and it will continue to be in the news. But do people know what they are talking about? Allegations and assertions such as on social media are one thing – legal admissible evidence, causation, proof and damages are different. So . . . as a point of reference, below I have provided some of the legal standards (select California jury instructions) that may apply depending on the facts and circumstances. Best to you, David Tate, Esq.

Example California Civil Jury Instructions Re Harassment – Hostile Work Environment (CACI 2521A, 2523, 2524 and 2505)

Note: the complained of activity must constitute or amount to harassing conduct under the circumstances of the situation; unlawful harassment isn’t just any harassment – the harassment must be based on a protected status; and the harassing conduct must have been severe or pervasive. Also note, although the example jury instruction (CACI 2521A) that I have provided below is based on conduct that is directed specifically at or upon the plaintiff victim, the harassing conduct can be directed at other people if the conduct is otherwise observed or experienced by, or in some other manner affecting the plaintiff. Also note, other related issues can involve, for example, disparate treatment, disparate impact, retaliation, disability discrimination reasonable accommodation and attempt at reasonable accommodation, constructive discharge, battery, available defenses, etc. If you are dealing with issues in these areas, you also need to have a correct understanding of the intent of the law.


2521A. Hostile Work Environment Harassment—Conduct Directed at Plaintiff—Essential Factual Elements—Employeror Entity Defendant (Gov. Code, § 12940(j))

[__________ Name of plaintiff] claims that [he/she] was subjected to harassment based on [his/her] [describe protected status, e.g., race, gender, or age] at [__________ name of defendant], causing a hostile or abusive work environment. To establish this claim, [__________ name of plaintiff] must prove all of the following:

That [__________ name of plaintiff] was [an employee of/a person providing services under a contract with/an unpaid intern with/a volunteer with] [__________ name of defendant];

That [__________ name of plaintiff] was subjected to unwanted harassing conduct because [he/she] was [protected status, e.g., a woman];

That the harassing conduct was severe or pervasive;

That a reasonable [e.g., woman] in [__________ name of plaintiff]’s circumstances would have considered the work environment to be hostile or abusive;

That [__________ name of plaintiff] considered the work environment to be hostile or abusive;

[Select applicable basis of defendant’s liability:]
[That a supervisor engaged in the conduct;]

[That [___________ name of defendant] [or [his/her/its] supervisors or agents] knew or should have known of the conduct and failed to take immediate and appropriate corrective action;]

7. That [__________ name of plaintiff] was harmed; and

8. That the conduct was a substantial factor in causing [__________ name of plaintiff]’s harm.


2523. “Harassing Conduct” Explained

Harassing conduct may include, but is not limited to, [any of the following:]

[a. Verbal harassment, such as obscene language, demeaning comments, slurs, [or] threats [or] [describe other form of verbal harassment];] [or]

[b. Physical harassment, such as unwanted touching, assault, or physical interference with normal work or movement;] [or]

[c. Visual harassment, such as offensive posters, objects, cartoons, or drawings;] [or]

[d. Unwanted sexual advances;] [or]

[e. [Describe other form of harassment if appropriate, e.g., derogatory,
unwanted, or offensive photographs, text messages, Internet postings


2524. “Severe or Pervasive” Explained

“Severe or pervasive” means conduct that alters the conditions of employment and creates a hostile or abusive work environment.

In determining whether the conduct was severe or pervasive, you should consider all the circumstances. You may consider any or all of the following:

The nature of the conduct;

How often, and over what period of time, the conduct occurred;

The circumstances under which the conduct occurred;

Whether the conduct was physically threatening or humiliating;

The extent to which the conduct unreasonably interfered with an employee’s work performance.


2505. Retaliation—Essential Factual Elements (Gov. Code, §12940(h))

[__________ Name of plaintiff] claims that [__________ name of defendant] retaliated against [him/her] for [describe activity protected by the FEHA]. To establish this claim, [__________ name of plaintiff] must prove all of the following:

That [__________ name of plaintiff] [describe protected activity];

[That [__________ name of defendant] [discharged/demoted/[specify other adverse employment action]] [__________ name of plaintiff];]


[That [__________ name of defendant] subjected [__________ name of plaintiff] to an adverse employment action;]


[That [__________ name of plaintiff] was constructively discharged;]

3. That [__________ name of plaintiff]’s [describe protected activity] was a substantial motivating reason for [__________ name of defendant]’s [decision to [discharge/demote/[specify other adverse employment action]]

[__________ name of plaintiff]/conduct];

4. That [__________ name of plaintiff] was harmed; and

5. That [__________ name of defendant]’s decision to [discharge/demote/[specify other adverse employment action]] [__________ name of plaintiff] was a substantial factor in causing [him/her] harm.

[[__________ Name of plaintiff] does not have to prove [discrimination/harassment] in order to be protected from retaliation. If [he/she] [reasonably believed that [__________ name of defendant]’s conduct was unlawful/requested a [disability/religious] accommodation], [he/she] may prevail on a retaliation claim even if [he/she] does not present, or prevail on, a separate claim for [discrimination/harassment/[other]].]