Author Archive | James McRitchie

Foiled Without Binding Proxy Access Proposals

Foiled Without Binding Proxy Access Proposals

Foiled Without Binding Proxy Access Proposals

There will be no rush to binding proxy access proposals, thanks to a July 21 denial of a no-action request filed by H&R Block. Corporations continue with Wile E. Coyote type plots to derail genuine proxy access. However, in this case we foiled the latest plot to keep corporate governance a democratic-free zone without resorting to binding proxy access proposals.

Although SEC staff essentially gutted the meaning of Rule 14a-8(i)(10) – the “substantially implemented” exclusion – through a series of no-action letters issued on February 12,  it now appears the primary damage was to delay meaningful proxy access proposals by at least a year… but not to deny the right of shareholders to continue to seek real proxy access through the precatory proposal process.

The action by SEC staff on February 12 allowed companies to slip their own version of proxy access ‘lite’ into the bylaws, rather than allowing shareholders to choose between real proxy access and fake proxy access. A huge wave of proxy access ‘lite’ provisions has since ensued.  Soon most of the S&P 500 will be able to say they have ‘proxy access,’ having drunk from the same Kool Aid.

Proxy Access Lite: Texas Style

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CalPERS Chief Actuary: Help Wanted

CalPERS Actuary Estimate re source of pensionsChief Actuary position open at the California Public Employees’ Retirement System (CalPERS). Search underway for a new Chief Actuary to lead its Actuarial Office. Incumbent will provide independent counsel to CalPERS leadership and Board on actuarial valuations, assumptions and policies, rate structure, and funding of the CalPERS System and related funds.

This search is being led by New York-based Heidrick & Struggles. View a full description of the Chief Actuary career opportunity, including the ideal candidate profile and professional competencies.

Interested parties may contact: Continue Reading →

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The Handbook of Board Governance: Part 2

The Handbook of Board GovernanceI continue my review of The Handbook of Board Governance: A Comprehensive Guide for Public, Private, and Not-for-Profit Board Member. With the current post, I provide comments on Part 2 of the bookWhat Makes for a Good Board? See prior introductory comments and those on Part 1. I suspect the book will soon be the most popular collection of articles of current interest in the field of corporate governance.

The Handbook of Board Governance: Director Independence, Competency, and Behavior

Dr. Richard Leblanc‘s chapter focuses on the above three elements that make an effective director. Regulations require independence but not industry expertise; both are important elements. Leblanc cites ways director independence is commonly compromised and how independence ‘of mind’ can be enhanced. He then applies most of the same principles to choosing external advisors.  Throughout the chapter he employees useful exhibits that reinforce the text with bullet points, tables, etc. for quick reference. Continue Reading →

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The Handbook of Board Governance: Part 1

The Handbook of Board Governance

The Handbook of Board Governance advertised in Times Square

This is the second post in my review of  The Handbook of Board Governance: A Comprehensive Guide for Public, Private, and Not-for-Profit Board Member. see the introduction. I blabbed on for so long that I made my introduction a separate post. With the current post, I actually start reviewing Part 1 of the book. Yes, this will probably be my longest review ever… but it is for one of the biggest books ever. 

The Handbook of Board Governance: The Board’s Responsibilities

Leblanc first sets out the book’s purpose and highlights the potential importance of each part. Since I’ll be covering some of the same ground in this review, I’ll at least spare you commentary on his commentary.

The Handbook of Board Governance: Boards That Lead

In Boards That Lead, Michael Useem, Dennis Carey and Ram Charan (UCC) highlight the potential leadership that can come from boards, offering many examples. “Smart experienced, and dedicated man and women are ready to serve.” Yet, they are “too often closeted in the boardroom.”  Of course, we seen many instances where they fail even there. UCC provide a brief historical evolution the board from nineteenth century boards with family members, wealthy investors and friends of the founder. Later, “expertise trumped pedigree.” Continue Reading →

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The Handbook of Board Governance

The Handbook of Board Governance

When I agreed to contribute a chapter to Richard Leblanc’s book, I knew he was an an excellent speaker, blogger and teacher. I also suspected he was a good promoter. How else could he attract over 23,000 members to his Linkedin group, Boards & Advisors? But, I never dreamed I’d see The Handbook of Board Governance: A Comprehensive Guide for Public, Private, and Not-for-Profit Board Members make the lights of New York’s Times Square across from the Hard Rock Cafe. Now I’m half expecting to see Leblanc on the late night TV circuit, like a candidate for public office reaching out to voters.Non-Performing Assets

It reminds me a little of Robert A.G. Monks placing a full-page ad in The Wall Street Journal in 1992, calling out the directors of Sears as “Non-Performing Assets.” Monks was pushing several corporate governance reforms at Sears, as well as a study of spinning off several businesses due to lack of synergy. Sears committed $5.5 million to defeat Monks’ candidacy for a single seat on the board, so it wasn’t surprising that he lost. He had already headed the Pension Welfare Benefits Administration and had founded Institutional Shareholder Services, so was well known. However, the ad gave him a greater degree of popular notoriety and may have helped chart the course for future accomplishments – LENS Investment Management, the Corporate Library, a whole shelf of authored books, etc. 

In a year when serial self-promoter Donald Trump has a good chance of winning the Presidency, some might dismiss such ads simple publicity stunts, like what we may have seen for Trump Steaks or Trump University. However, publicity can be the key to growing awareness of important issues, not just a means to a quick buck. There is substance behind the popularizing efforts of Monks and Leblanc who are both in it for the long-term.

Although Sears ultimately implemented much of Monks’ program, few see it as a growth company.  They would have been better off with him as a director. Likewise, The Handbook of Board Governance actually has a good chance of becoming The handbook future directors will turn to in reference to issues or problems they face. Leblanc has assembled an outstanding collection of wide-ranging material covering the key issues from a who’s who list of corporate governance experts (I’m not sure how I got in), as well as contributing his own excellent chapter on Director Independence, Competency and Behavior.

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#ICGN16 Part 5 – Diversity, ESG & Audits

Accelerating Board Diversity Panel #ICGN16

#ICGN16: Accelerating Board Diversity Panel

#ICGN16, the annual meeting of the International Corporate Governance Network, was held in San Francisco, June 27-29. #ICGN16 was the hashtag for tweeting at the meeting, so check Twitter for additional posts to #ICGN16. This post is a continuation of a few rough notes from the conference. Read Part 1Part 2Part 3 and Part 4 of #ICGN16. Continue Reading →

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Food Safety Report & Webinar

Food Safety Regulations Compared

Food Safety Regulations Compared

Food safety is an issue I’ve been concerned with for years, first as head of California’s cooperative development program, then while on the boards of a food co-op and a wholesale distributor. I remember going for a State of California job interview with someone who lived a few houses down from the co-op. During the interview, he told me the co-op had a problem with mice. They were invading the neighborhood. When he complained to co-op staff, he was told the mice have just as much right to live as anyone else. Oops, my board experience had gone from the plus to the minus column, plus I had a food safety issue to deal with. That was thirty years ago.

As a small shareholder of Chipotle Mexican Grill (CMG), I’m still very concerned with food safety issue, so it was with delight that I found a new reportFood Safety: In a State of Transformationconducted by Cornerstone Capital Group (Cornerstone), commissioned by the Investor Responsibility Research Center Institute (IRRCi). It examines food safety of some 60 publicly traded U.S. companies, as well as 30 companies that offer food safety solutions. For every investment nightmare, there are other companies pushing into the space with solutions and investment opportunities. Continue Reading →

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Reeds Inc: Proposals Due Monday – Update

Chris Reed of Reeds Inc: What Happened to Culture Club Kombucha?

Chris Reed of Reeds Inc: What Happened to Culture Club Kombucha?

Update 7/12/2016: Reeds Inc received two faxed proposals from two shareholders before the deadline for submissions. It looks like shareholders will get to vote on both proxy access and creating an independent chairman. Maybe shareholders can help to turn our company around. Institutional investors only hold about 14% of Reeds Inc and insiders hold 26%, so retail shareholders will need to do the heavy lifting. We’d better get in shape. Hope springs eternal; stock up over 6% for the day.

Reeds Inc doesn’t have their annual meeting until December but proxy proposals are due Monday. I’m submitted a proposal on proxy access but almost submitted a proposal to split the chair and CEO positions. Reeds Inc really needs both. I’m hoping another shareholder will submit a proposal to split the chair and CEO positions. If you own shares in Reeds Inc but aren’t sure how to file a proposal, check out our Shareowner Action Handbook. Still can’t figure it out how to submit a proposal or want some help? Please get in touch. I would be happy to help.

In preparation for December’s annual meeting, I’ll be building more arguments about why change is needed at Reeds Inc but the following are a few thoughts off the top of my head. Continue Reading →

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#ICGN16: Part 3 – Integrating ESG

#ICGN16, the annual meeting of the International Corporate Governance Network, was held in San Francisco, June 27-29. #ICGN16 was the hashtag for tweeting at the meeting, so check Twitter for additional posts to #ICGN16. This post is a continuation of a few rough notes from the conference. Read Part 1 and Part 2 of #ICGN16.

#ICGN16: Integrating ESG in Strategic Investment Decision-making 

Michael Jantzi, CEO, Sustainalytics moderated the panel.

Michael Jantzi

#ICGN16: ESG – Michael Jantzi

A growing number of institutional investors recognize that good governance and prudent management of an investment portfolio requires the consideration of a range of environmental, social and governance (ESG) factors. This panel shared perspectives from some of North America’s most experienced investors already developing and implementing ESG integration strategies into their investment processes.

PWC just released report. Chief finding is that Continue Reading →

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#ICGN16: Part 2

#ICGN16

#ICGN16 was held in San Francisco, June 27-29, the annual meeting of the International Corporate Governance Network#ICGN16 was the hashtag for tweeting at the meeting, so check Twitter for additional posts to #ICGN16. This is a continuation of a few of my rough notes from the conference. Accuracy for details isn’t one of my noted strengths, so I’m tempted to say the post is for ‘entertainment purposes’ only but I do hope readers will get some sense of the proceedings. View Part 1 of #ICGN16

#ICGN16: Remarks of Jack Ehnes

Jack EhnesCalPERS and CalSTRS hosted #ICGN16. Unfortunately, I could only spend a short time at the ICGN Conference this year. I did hear one speech from Jack Ehnes, Chief Executive Officer, CalSTRS, paying tribute to his counterpart at CalPERS. Anne Stausboll had been CEO of CalPERS since January 2009 and was/is very committed to sustainable investment. She serves as the chair of the Ceres Board, was one of the drafters of the UN Principles for Responsible Investment and served on its original governing board. I’m sure there were many other well deserved tributes to her throughout #ICGN16. I hope she will continue to be involved after her retirement from CalPERS at the end of June. Continue Reading →

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#ICGN16: Part 1

#ICGN16

#ICGN16 was the hashtag for tweeting about the 2016 annual meeting of the International Corporate Governance Network held in San Francisco, June 27 – 29th, 2016. Check Twitter for additional posts to #ICGN16. What follows are a few of my rough notes from the conference. Accuracy for details isn’t one of my noted strengths, so I’m tempted to say the notes are for entertainment purposes only but I do hope readers will get some sense of the proceedings.

#ICGN16: PreConference Rethink of ‘One Share, One Vote’

Even before the ICGN16 (International Corporate Governance Network annual conference) met in San Francisco last month, two prominent former board members kicked off lively debate by proposing a radical rethink of what has been a guiding principle for many in the movement for good corporate governance. Peter Clapman and Richard Koppes argued in a WSJ opinion piece that longterm shareholders should have greater voting rights.

…the shareholder-rights agenda has been largely achieved. Only 10% of S&P 500 boards are classified today, while some 90% are elected by majority vote. Only 3% have a poison pill in force. More than 35% of S&P 500 companies have adopted proxy access… 

Richard Koppes

Richard Koppes

Peter Clapman

Peter Clapman

Activists increasingly demand board representation to implement their agenda, often meaning that short-term investors take and quickly relinquish boards’ seats. Boards frequently settle with activists out of fear of losing a proxy battle—or worse, winning a Pyrrhic victory. (Time to Rethink ‘One Share, One Vote’?)

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Review: What They Do With Your Money

What They Do With Your MoneyWhat They Do With Your Money: How the Financial System Fails Us and How to Fix It

What they do with your money is central to many issues of citizens around the world. This wonderful new book by Stephen Davis, Jon Lukomnik, David Pitt-Watson helps readers connect the dots. While its focus is on the financial system, its purpose is empowering individual citizen investors and those who would be investors if that system were redesigned to serve us all.

Fixing the system won’t be easy. We can’t count on most of those those benefiting from the system to initiate needed changes but the authors provide a roadmap of how needed reforms can be accomplished.

What They Do With Your Money and Feeling Like We Have No Say

RAND asked a representative sample of Americans if they agreed with the statement “people like me don’t have any say about what the government does.” Responses among likely Democratic voters didn’t significantly correlate with support for either Sanders or Clinton. Likewise, there was no correlation with supporters of most Republican candidates… except Donald Trump. People who “somewhat” or “strongly” agreed with the statement were 86% more likely to prefer Trump over other candidates. 
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Positive Impact of SRI Investors

SRI InvestorsSustainable, responsible and impact, SRI investors, have influenced the investment industry, companies, governments and other actors to address environmental, social and governance (ESG) challenges in four major areas, according to The Impact of Sustainable and Responsible Investmenta report released today by the US SIF Foundation.

Influence of SRI Investors

Drawing upon a range of data, surveys and examples, the report focuses on four significant impacts of sustainable, responsible and impact – SRI investors over the past 25 years.  SRI investors have:

  • changed the investment industry, leading to more SRI products and greater access to expert practitioners;
  • improved public companies by stepping up active shareholder ownership and engagement on ESG issues;
  • aided communities and individuals via community investing and other initiatives; and
  • influenced public policy and launched organizations to promote sustainable investment.

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Business Development: Governance Center

The Conference BoardBusiness DevelopmentThe objective of the Director for New Business Development is to promote and sell Governance Center memberships globally, in conjunction with the Governance Center staff and the Directors of Associate Service. Being a well-educated, entrepreneurial, articulate and consultative sales professional, the Director, New Business Development, Governance Center cultivates Global F1000 companies, institutional investment firms and corporate governance services providers, including law firms, that become members of The Conference Board Governance Center and is responsible for closing new Governance Center sales.

Success in the position requires the Director to possess integrity and openness, the ability to discuss global business and corporate governance issues, the stature and presence to engage meaningfully with C-Suite executives, the ability to synthesize and articulate to prospects the value proposition of membership in The Conference Board Governance Center, and the ability to sell to senior executives in Legal, Governance, Investor Relations, Compliance, Human Resources, and Public Affairs roles, in addition to board members, CEOs and presidents in prospective Governance Center member organizations. Continue Reading →

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