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Hundreds Dead after Turkey and Syria Earthquake, plus Executive Liability in the US.

Hundreds Dead after Turkey and Syria Earthquake, plus Executive Liability in the US.

March 11, 2023 • Time to Enlightenment...7 minutes

A sad morning.

The death toll in Turkey and Syria following Monday’s terrible earthquake is rising and the latest death toll at the time of writing was over 1,000 but this number has been rising steadily all morning. The full toll will be many times higher while thousands more are injured or without shelter and power. The recovery and aid operations will be complex and likely hampered by political and security considerations.

Closer to home, a judge’s ruling in Delaware means that company executives may be held personally responsible for regulatory and governance failures.

Earthquake in Turkey and Syria

A 7.8 magnitude earthquake hit southern Turkey early on Monday morning, causing widespread damage across the border region and into North Syria. This is one of the most powerful earthquakes ever to hit Turkey. Initial reports were of over 500 hundred dead and thousands injured but these numbers are rising rapidly and the latest report is of over 1,000 dead: it will be days before the true extent is known.

Map via the BBC

International agencies are offering support to local responders but getting large amounts of aid and support into Syria will be a complicated operation for western organizations. President Erdogan’s handling of the response will also come under great scrutiny in the next few days once the initial shock has worn off.

See the BBC for live updates.

Personal Liability in the C-Suite

A shareholder lawsuit against a former McDonalds’ executive signals a significant change in how company executives can be held personally liable for company failures. A Delaware judge approved the lawsuit which accuses the former Chief Human Resources officer, David Fairhurst, of neglecting his fiduciary duties to the fast-food chain by poorly handling reports of systemic sexual harassment at the firm. Fairhurst has been accused of sexual harassment in the past, but the Delaware lawsuit separately contends that his poor handling of the claims amounted to neglect and mishandling of a critical risk to the firm, something he should have addressed as an executive at the company.

Nevertheless, by issuing his ruling before deciding whether shareholders have standing, Vice Chancellor Laster appears to be sending a message about the importance of top management in the oversight process, experts said.

“Here the court said management always plays a critical role in the oversight process,” Ms. Weinstein* said. “They are the people on the ground who really know what’s going on.” Failing in their oversight duties could prevent directors from fulfilling their own, she added.*Gail Weinstein, senior counsel at Fried, Frank, Harris, Shriver & Jacobson LLP

WSJ

It will be some time before we know if this case is successful or not, but the judge’s ruling is a change in the application of so-called ‘Caremark’ claims. These cases have previously been directed at companies’ boards, contending that boards of directors set up the compliance systems that are supposed to manage corporate risks. The Fairhurst ruling means that Caremark claims of oversight failures can now be brought against company executives more easily. This may lead to frivolous claims but should also ensure that executives take their governance and oversight responsibilities seriously.

Cyprus’ Presidential Elections Head to a Run-Off

Sunday’s election in Cyprus returned no clear winner and heads to a runoff on February 12th. Former foreign minister Nikos Christodoulides, came first, with former diplomat Andreas Mavroyiannis a close second, despite polls having written Mavroyiannis off in the run-up to the vote. Read more in Reuters.

On to the numbers

(Still not sure of how to use these metrics in your risk analysis? There’s a cheat sheet at the bottom of the email but the user’s guide is here. Want to know more? Read the white paper.)

Relative Values (90-Days)

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Trends (21-days)

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Commentary and Evaluation

Brent Crude

Brent Crude is very low for this 90-day interval. Prices decreased moderately over the last 21 days after slight fluctuation.

Iron and Steel

(No change) Iron and Steel remain very high for this 90-day interval. Prices increased moderately over the last 21 days after slight fluctuation but continue to creep up.

Market Volatility (VIX-US)

Market Volatility (VIX) is very low for this 90-day interval. The index ended relatively flat over the last 21 days after moderate fluctuation.

Wheat

Potentially impacting: Bread, pasta, couscous & noodle prices | Changes to food subsidies (potentially leading to unrest) | Cost of living | Movement from low-income to food insecure to undernourished | Increased theft or graft in loosely governed areas | Demand on charities.

(No change) Wheat is very high for this 90-day interval. Prices ended relatively flat over the last 21 days with little fluctuation.

Ocean Freight (FBX)

Shipping (FBX) remains very low for this 90-day interval. Prices decreased moderately over the last 21 days after significant fluctuation but the downward trend continues.

Up-to-date shipping data supplied by our partner Freightos

Election Watch

February 12: Cyprus, Presidential run-offFebruary 25: Nigeria, President, House of Representatives and Senate

Palate cleanser

I’m glad to see this apprentice electrician hard at work. #lifelonglearning.

From Cats With Jobs on Twitter

Visualization

I’m also experimenting with some new ways to illustrate the metrics.

This one’s a little too hectic for me, but I like how this shows the movements

Let me know what you think (these are a bit clunky but I’m sure you get the idea).

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