Corporate Governance News

Coverage continues to roll out on our petition to the SEC, which would amend a rule that allows blank proxy votes to go to management. See The SEC and Investor Suffrage, Dollars and Sense, 5/22; You Can Correct an Outrage, Motley Fool, 5/29/09; Don’t Let Companies Change Shareholders’ Blank Votes, Harvard Law School Forum on Corporate Governance and Financial Regulation, 6/2/09; Blank Votes Turn Magically to Management, SVNACD; The Problem of Blank Votes, theRacetotheBottom, 5/26/09. Thanks also to Rosemary Lally of the Council of Institutional Investors for mentioning our petition in their May 14th Corporate Governance Alert, to Stephen Davis and Aaron Bernstein for informing the readers of Global Proxy Watch. and to Laura Naus for a huge article, Shareholder Activism: Activists Ask SEC to Eliminate Voting Bias in the July edition of Kennedy's Investor Relations Newsletter. Please read our petition and send your supporting comments to the SEC. (see submitted comments) Let's not let the SEC take its time, like the broker voting issue under the Bush Administration.

June 2009

Results of SEC July 1 Meeting

Say on Pay for TARP Companies. The Commission voted 5-0 to release a proposal implementing a statutory requirement that TARP bailout recipients provide an advisory shareowner vote on executive compensation.

Corporate Disclosure Amendments. The Commission voted 5-0 on a package of corporate disclosure enhancements related to:

compensation policies;
director nominee qualifications;
company leadership structures (e.g. separation of Chairman/CEO roles);
the board’s role in a company’s risk management process;
potential conflicts of interest involving company compensation consultants.
a new rule to require a company to report the voting results from a shareholder meeting within 4 business days;
several amendments to the proxy solicitation process.

Rule 452 Amendments. The Commission voted 3-2 in favor of approving the NYSE proposal to ban brokers from voting in contested or uncontested corporate board elections on behalf of customers who did not return voting instructions. The dissenting votes were from Commissioners Casey and Paredes. Both Commissioners voted against the NYSE proposal because, in part, of their view that this issue should be one component of a broader review of the proxy voting and communications system. Commissioner Paredes also mentioned in his remarks the 93 comment letters received (out of a total of 136) that urged a comprehensive review of the proxy system. (This was due to a big push by the Chamber backed Shareholder Communications Coalition, while shareowner interests slept, knowing they already had the votes.) All Commissioners acknowledged the importance of studying proxy “plumbing” issues and committed to undertake such a review during the balance of this year. I hope this will include consideration of our petition on "blank votes."

Broc Romanek, who's coverage is excellent (see The Big Kahuna: SEC Approves NYSE's Elimination of Broker Discretionary Voting, TheCorporateCounsel.net Blog, 7/2/09), says elimination of broker vote "is the biggest of the reforms that companies face - bigger than proxy access, say-on-pay, etc."

Beth Young noted Broadridge's estimate that broker votes accounted for 16.5% of votes at shareholder meetings in 2008. (It's About Time: SEC Votes to Change NYSE Broker Vote Rule, The Corporate Library, 7/2/09) Loss of those votes will certainly make it more difficult for management to win without real shareowner approval. Great summary of the proceeding by Ted Allen of RiskMetrics at A Momentous Day for Investors, 7/2/09.

Chamber Sponsored Study Agrees with Chamber

Nell Minow uses her typically colorful language to attack Chamber sponsorship of another Navigant Consulting study that purports to show "key-votes" by the AFL-CIO haven't improved stock prices. The Chamber claims companies "have driven the American economy to unparalleled heights." (apparently they haven't noticed the economic plunge). Minow says, "The Chamber of Commerce should draw a lesson from Johnson & Johnson’s response to the Tylenol poisonings and devote its efforts to restoring the brand of American capitalism. Instead, the Chamber of Commerce is once again confusing what is best for American corporations with what is best for American corporate executives, engaging in its usual subversion of public policy with thuggishness, subversion, name-calling, and bait and switch."

She goes on to note the Chamber is spending $100 million of shareholders’ money for a what they, themselves claim is a "sweeping national advocacy campaign encompassing advertising, education, political activities, new media, and grassroots organizing to defend and advance America’s free enterprise values in the face of rapid government growth and attacks by anti-business activists."

For those interested in refuting the Chamber's recent efforts and the Navigant study, Minow's post contains excellent citations. (Another Shell Game from the Chamber of Commerce, The Corporate Library, 7/2/09)

I analyzed last Navigant study back in July 2008 under the heading Chamber Attacks Resolution Process. bs I said then, businesses should ask their local and state chambers, which may be members of the US Chamber of Commerce, to seek new leadership at the federal level. Sure, shareowner resolutions and annual meetings are a bit of a pain, but they keep us in touch with what is coming. For example, ICCR filed resolutions on subprime loans for years. Too bad banks didn't listen.

The resolution process is an early warning system that allows us to gauge the popularity of a given issue. Often we can avoid regulations by working out less burdensome voluntary measures. Even when businesses fully adopt resolutions, the costs can be substantially less than complying with mandatory rules.

Tell your local chamber that the U.S. Chamber should spend its time and money on more important efforts. For example, they could push Congress to legislate higher margin requirements for speculators. That might lower the cost of oil. They could push for universal health insurance to put an end to our competitive disadvantage due to rising health care costs. They could seriously address global climate change. Failure to resolve that issue will cost trillions of dollars and millions of lives. Fighting wildfires now takes nearly half of the U.S. Forest Service budget. That's up from just 13% in 1991.

July 2009

Proxy Voting by ETFs

The Investor Responsibility Research Center Institute and PROXY Governance, Inc. released a new in-depth analysis of the proxy voting policies and recent voting records of the seven largest exchange-traded fund (ETF) sponsors, which account for some 94% of the ETF market. "On one end of the spectrum, ProFunds voted with management on only 5 of the 21 proposals in our sample; at the other end, Rydex voted with management on 19 of the 21 proposals - with the remaining funds falling in between," said Scott Fenn, senior managing director for policy at PROXY Governance and a co-author of the report.

"ETFs have surged in growth, from a single fund in 1993 to approximately 750 ETFs with more than a half trillion dollars in assets under management in the U.S. alone as of year end 2008," said Jon Lukomnik, IRRC Institute program director. "Most investors don't know that when they buy an ETF, they also give that ETF the right to vote at all the underlying companies owned by that ETF. This is the first look at how ETFs are using the voting power they have amassed, which ultimately impacts corporate performance and shareholder value. Importantly, the findings come at a time of unprecedented focus on corporate governance in the U.S.," he added.

The new study, "Proxy Voting by Exchange-Traded Funds: An Analysis of ETF Voting Policies, Practices and Patterns," was commissioned by the non-profit IRRC Institute and conducted by PROXY Governance. The full report is available on both organization's websites.

The study covers the following seven ETF sponsors - Barclays Global Investors (iShares), State Street Global Advisors (SPDRs), Vanguard Group (Vanguard ETFs), Invesco Ltd. (PowerShares), ProFunds (ProShares), Rydex Investments (RydexShares) and WisdomTree Trust (WisdomTree ETFs). (NB: Barclay's Plc recently announced that it would sell its Barclay's Global Investors asset management division, the single largest ETF manager, to BlackRock, Inc.) Key research findings are as follows:

Key votes, selected by researchers to highlight differences among the funds, were generally consistent with the written voting policies of those funds in 208. Case-by-case voting policies by many funds on most issues explain much of this consistency. In a few cases, however, specific votes were cast that appear to be potentially contrary to the fund's written voting guidelines.
The fund sponsors use substantially different proxy voting guidelines. Those that relied proxy advisory firm guidelines were detailed, comprehensive, and prescriptive. At the other end of the spectrum, Rydex had very summary guidelines that stipulate voting with management on virtually all issues.
The three largest ETF sponsors (BGI, SSgA and Vanguard) were somewhat less likely to vote against management on shareholder and management proposals than are most of the smaller fund sponsors examined in this study. Yet, according to a press release, the three largest ETF sponsors, on average, appear to withhold votes from incumbent director nominees at a greater number of companies than the three smaller funds (Invesco, ProFunds and WisdomTree), which appears to be their preferred means of expressing dissatisfaction with management or board governance rather than voting against management on specific proposals. Rydex Investments had the most consistent record of voting with management of any of the funds in the study. However, in examining the actual report, the three funds most likely to use withhold votes in director elections turn out to be ProFunds (19%), BGI (16.8%), and Invesco (9.5%), so two out of three are smaller funds.
Funds that rely heavily on a proxy advisory firm for voting guidelines or to make their vote decisions tend to vote against management proposals, and in favor of shareholder proposals, more frequently than those that rely on their own guidelines
Of the five social and environmental shareholder votes reviewed, there were no votes in favor by the largest funds, although Vanguard abstained on three votes, consistent with its policy. Among the smaller fund sponsors, with the exception of Rydex, there was a much greater propensity to vote against management proposals and a general willingness to support shareholder proposals. ProFunds and Invesco PowerShares, showed universal support for the shareholder proposals in our sample dealing with board governance and compensation issues. Profunds was the only fund to vote in favor of a significant number of the social and environmental proposals in their sample

We applaud the study and look forward to further examination of proxy voting by ETFs, the quickest growing segment of the market.

Rollout

The inauguration of a new service in corporate governance sometimes gets a lot of attention but most of the time growth is more viral... and not at the rate of political events or news of the stars. I'm impressed with the rollout of Shareowners.org, which promises to provide a central core network for involvement by individual shareowners and beneficial owners.

Structured as a social networking site, Shareowners.org is initially focused on lobbying for stronger laws and regulations. In time I expect members will soon be discussing issues at specific companies and coordinating activities. Sure, I would have hoped rollout would have been picked up by CNBC and the New York Times, with thousands signing up in the first few days. Shareowners.org did get coverage by trade publications like Pensions and Investments. Only 150 people signed up right away but that really is a good start, especially considering that many of the 150 are among the top movers and shakers in the field. Don't get left behind; sign up now.

Less noticed was rollout of VoterMedia.org. As far as I know, there was no press release. This project largely depends on the willingness of its users to fill in the blanks for a huge database that could drive the outcome of not only corporate elections but elections at institutions ranging from local unions to future world leaders. The site seeks to address the fact that both private sector and public sector media have inadequate economic incentives to serve our collective interest in democracy. " As a result, "we suffer from corruption and inefficient policies."

The vision is that VoterMedia.org will create a platform where organizations will compete, first for votes and then for for funds, allocated by voters based their reputations for "critiquing politicians, directors and their policies, while remaining loyal to voters’ interests." The aim is to create a website platform for blog (and other media) competitions, "one for each voting community in the world." You can get involved by inputting communities like those of your local homeownrs association, student government, school board or corporation. Over time, this could be your first stop when you get a ballot of just about any kind.

IT Professionals for Investor Suffrage

The Investor Suffrage Movement launched a new, all-volunteer initiative for information technology professionals to develop applications for the United States Proxy Exchange. Kevin Weber, an IT professional with twenty years experience implementing applications for the finance industry, is heading the initiative. If you are an IT professional, or a finance professional who would like to help design applications, contact Kevin for more information.

Oh Bob, Don't be Such a Downer

I think Bob Monks must be feeling a little morose, just at a time when he should be leaping for joy. Recently, he announced My Last ExxonMobil Annual Meeting. Then he assured us he hasn't given up on reform at ExxonMobil... he's just finished with their meetings. To me, that's like an aging rock star announcing their last tour. I refuse to believe it.

I don't want him to feel obligated to do something he's sick of but he must know his voice at annual meetings gets a lot more press coverage than those of others, and for good reason. Monks practically invented the movement towards better corporate governance. He, Nell Minow and Bob Tricker contributed more than anyone to creating corporate governance as a new academic discipline. Again, more than anyone, Monks helped to create a new fiduciary duty for pension and mutual funds... the obligation to vote in the best interest of plan beneficiaries and beneficial owners. He and Nell Minow founded the major proxy advisory service and later the LENS fund, which showed that instituting good corporate governance pays financially. I could go on and on but he is, I think, without question the field's most important driver.

A few weeks ago, I was in Maine interviewing Bob for a video that I hope will soon be posted to both his site and mine. In one of our last extensive conversations and in his recent writings, he had emphasized the importance of foundations and endowments in leading our way to more accountable corporate governance. I think we had both agreed for years that the epicenter of the movement was in pension funds, especially public pension funds, because of their size, because they are less conflicted, and because of they are generally universal owners.

Although I recognized the importance of foundations and endowments in aligning money with mission and for setting a moral tone (even more so after reading Marcy Murninghan's Common Sense and Civic Virtue: Institutional Investors, Responsible Ownership, and the Democratic Ideal), my own focus of late has shifted to individuals, as retail shareowners and as beneficial owners (primarily of mutual funds, ETFs and pension funds). To my mind there is something fundamentally wrong with a system where almost 95% of retail shareowners fail to vote. Key for me is how to get the typical individual at least minimally involved in governing. I agree with Mark Latham, the answer may be better branding. (See Proxy Voting Brand Competition.)

All this by way of introducing a question I asked Monks during our recent conversation in Maine, something like, "what's the critical point of leverage today in corporate governance?" Whereas I expected him to say foundations and endowments, his response was that 10% of the shareholders should be able to call a special meeting. I stumbled in our conversation, getting defensive about my role in pushing proxy access, and was never able to steer our conversation to the key players and the question of individuals vs groups. He certainly got me thinking more about special meeting provisions.

Today (6/29/09), in his post Tomorrow’s Problems and Yesterday’s Solutions, he explains a bit more about why he thinks other reforms are less critical. It is the beginning of a good conversation, since a lot more could be said on each topic. Here's a quick response to each of his points:

Executive Pay. I agree, "say on pay" isn't likely to reduce the magnitude of greed by any considerable amount. While it could have a positive effect of getting shareowners and boards talking, it could also act as a shield because shareowners will end up approving bad pay packages because they don't have the information necessary to adequately judge performance. However, I conclude it might do some good in the most abusive instances. (see Executive Enrichment Rules Doomed by Naivete: Graef Crystal, Bloomberg, 6/29/09)
Proxy Access for shareholder nomination of directors. Sure, running a proxy contest is very expensive. However, Monks' contest at Sears was before there was much awareness of corporate governance in the press and before internet sites like Investor Suffrage Movement & Proxy Democracy, Shareowners.org, and Votermedia.org. Think of the publicity Eric Jackson has gotten for his campaigns with very little money. Maybe access contests to put one or two shareowner representatives on boards will be rare but any such instances will heighten awareness among directors that they are increasingly dependent on shareowners, who can potentially replace them.
Splitting board chairman and CEO. Monks still sees this a good governance... it doesn't give power directly to shareowners but it is better than nothing. Come on Bob! If directors begin to get out from complete domination of CEOs that has to be good. Less dependency on CEOs is likely to lead to more independent thought and greater recognition of their fiduciary duty to shareowners.
Majority vote requirement for director elections. Yes, we won't often find a Roy Disney or Stanley Gold willing to spend the money for a big withhold vote, but some cases of corporate governance failure are even more apparent than Disney's. Additionally, withhold votes are used to signal displeasure with individual directors and committees. They can discipline the board, without a full scale revolution.
10% of the shareholders may call a Special Meeting at which any or all of the directors may be removed with or without cause. Agreed, every company should have such a provision. However, what makes you think it will be any easier to agree upon the need for a meeting than the need for access or a withhold campaign. Sure, it only takes 10% to call the meeting but how do they get another 41% to agree with them quickly? And, unless the law requires it, how do we get the provision in the first place?

There's nothing wrong with "Special Meeting" resolutions (other than that many will settle for 25% and make it more difficult to bring the threshold down in the future). In fact, perhaps that should be the big push for the 2010 season, if it isn't mandated. However, each of the other measures pessimistically dismissed by Monks represents progress towards more democratic corporate governance, even if they only work substantively in the worst situations.

As much as anyone in the movement, Bob understands the gap between the promise of our the language of democracy applied to corporate elections, our ideals, and the reality. As the struggle continues, there will be unintended consequences but most of the reforms now being considered will push in a positive direction.

I'd still like to have that conversation about the actors. If real people don't care, the institutions they create won't facilitate caring by those who run them, even if they have a fiduciary obligation to care about the welfare of people who are willing to risk a habitable planet for their grandchildren so that they can continue to care only about the next year or the next quarter. Only when individuals care about the long-run will we see institutions embrace the reforms needed for full accountability and sustainable wealth generation.

Monks Addresses Global Leadership Program

Addressing the World Economic Forum fellowship graduation, Robert Monks reflects on Francis Fukuyama's The End of History and tells graduates:

What we had thought was a global harmony of democracy and the market places turns out to have been merely a new iteration of the struggle for power... The new challenge is to introduce legitimate standards and enforcement by government without destroying the innovating genius of a free market system... We need at the least to have a business system that reflects the external costs of its functioning on society."

Monks concluded with the hope the class would become "the first 'global fiduciaries' - professionals whose commitment to the sustainability of humankind on earth is a transcending informing energy." (Do Not Be Afraid of Failure, 6/26/09) For the sake of our collective future, let's hope they heard him and take his words to heart.

PACCAR

Chevedden asks the Board to advise him within a week if Parry's Board service will be a subject of their next meeting. Clearly, he believes Parry should step down. PACCAR shareowners who share Chevedden's concern might also try emailing the Board at PACCAR.Board@paccar.com to express their concerns.

Shareowners who sued the Countrywide Board will never get their money back. Shouldn't there be consequences for those who served on Countrywide's Board? As The Corporate Library asked, "How could such a talented and experienced board have failed so badly?" If Parry failed at Countrywide, is he more likely to also fail at PACCAR? PACCAR's Board is staggered, so action by shareowners to remove them is difficult. Parry's term expires in 2010. Expect at least a withhold campaign if he is renominated.

Finally a social networking site that will actually accomplish something. Yes, you can "friend" people and post to their "wall." However, you can also send a powerful message to Congress that shareowners are mad about the lack of accountability and poor regulatory framework for corporations. Shareowners.org promises to provide a central core network for involvement by shareowners and beneficial owners in corporate governance activism.

When asked by Barry Burr, of Pensions and Investments, if pension funds would have a role in the new organization, Rich Ferlauto, of AFSCME, answered in the affirmative. They will be working with funds, especially public pension funds, to mobilize their own members.

Right now, ShareOwners.org will help engage typical investors by sending their comments in support of the group’s agenda directly to their members of Congress. Over the long run, ShareOwners.org’s broad four-part agenda focuses on the need for stronger regulation (including a beefed-up SEC), increased accountability of boards/CEOs, improved financial transparency and protection of the legal rights of investors. At some point, shareowners will also be able to vote their shares directly through ShareOwners.org.

The site also includes the results of an extensive survey that shows American investors want major reforms. Hopefully, they also want to learn how to more effectively influence boards and management at the companies they invest in. I urge readers to sign-up to become members of this important new network. While you are there, send a message to Congress and go ahead, add me as a friend and write something on my "comment wall." (see Group to use Internet to mobilize shareholders, P&I, 6/25/09; A third of American investors are "angry" (hopefully not enough to torture their advisors), The National Post, 6/25/09; press release)

At its July 1st meeting, the Commission will consider whether to approve the proposed rule change, as modified by Amendment No. 4, filed by the New York Stock Exchange, Inc. to amend NYSE Rule 452 and corresponding Listed Company Manual Section 402.08 to eliminate broker discretionary voting for the election of directors, except for companies registered under the Investment Company Act of 1940, and to codify two previously published interpretations that do not permit broker discretionary voting for material amendments to investment advisory contracts with an investment company. They will also address TARP amendments, and enhanced disclosure for compensation and other corporate governance matters, and to clarify certain of the rules governing proxy solicitations. (SEC Notice, 6/24) I wish they would also take up our petition on blank votes.

The Center named after him continues to study the inter-relationships of management, boards, shareowners and stakeholders, helping companies create long-term value. In the current downturn, the Center's role in restoring trust in global capital markets became more crucial than ever.

This year’s Forum provided ample opportunity for in-depth discussions of key topics. Of course, the main benefits of such conferences stem from the meaningful interaction between fellow practitioners. While my report on the 2009 Yale Governance Forum can't put you directly in touch with participants, I hope it does give readers a sense of the issues covered and some indication of the direction of thought leaders. It also might motivate you to attend in 2010. I hope to be there. Note: I'm still looking for a few more comments from participants, which I will add at the bottom, so please send them along. Also, I'm always happy to add or change hyperlinks, as they are brought to my attention.

The global high-net-worth population (those with $1M assets, excluding primary residence) dropped almost 15% last year to 8.6 million, from 9.89 million in 2007. In the US, the drop was 18.5%. The Asia-Pacific region was expected to overtake North America over the next few years as the region with the most high-net-worth investors. China overtook the UK last year as the fourth largest country for high-net-worth individuals, trailing the United States, Japan and Germany. (Survey: Ranks of rich thinned in 2008, Investment News, 6/24/09)

Five years ago in June 2004, CorpGov.net reported that ICU Medical was the first to hold its annual shareholders meeting solely online. Now, in 2009, Broc Romanek tells me Inforte was first company to do their annual meeting solely online in April '01...Ciber did it in '02. Thankfully, it doesn't seem to be very popular. In 2004, a survey of 100 Fortune 500 by Beyond Communications found a positive correlation between candid communication and superior share-price performance. FASB announced they would hold hearings on options expensing. Ten years ago in June 1999, we reported on Informed Investors Forums, which we hoped would help to get shareholders to think like shareowners. Pearl Meyer & Partners reported that more than 10% of surveyed companies make all employees eligible for option plans but of options awarded in 1998, 17% went to the 5 most highly paid executives. Morningstar questions the independence of mutual fund directors after finding that among the 82 largest fund families, the more that directors were paid, the more shareholders shelled out in expenses.

I've added links to The Corporate Board Member's two new blogs, The Board Blog and The Tally Sheet. Written by Corporate Board Member President & CEO TK Kerstetter, The Board Blog offers thought-provoking, interactive dialogue on corporate governance news with occasional expert guests contributing perspectives on current hot topics. The Tally Sheet offers real-time updates, advice, and commentary on executive compensation matters critical to board members, written by Eric W. Hilfers, a partner and the head of the executive compensation practice at Cravath, Swaine & Moore LLP.

The Investors Technical Advisory Committee (ITAC), which includes 13 investment professionals from the Council of Institutional Investors and the CFA Centre for Financial Market Integrity; a former regulator; and analysts from Moody's Corp (MCO.N), Standard & Poor's, Goldman Sachs & Co (GS.N), J.P. Morgan Securities (JPM.N), CalPERS and others said the governance structure of the Financial Accounting Standards Board has been "insufficient" in fighting off pressure from special interests and politicians seeking more flexibility for banks with toxic assets on their books. It asked that the five-member board be restored to seven members, with the two additional members coming from investor groups. (Investor group says FASB's independence has eroded, Reuters, 6/22/09)

The Lord & Benoit Report: NAIC Annual Financial Reporting Model Regulation helps non-public insurance companies to identify control weaknesses, achieve transparency, and restore public confidence by raising their level of self-governance with that of the SOX. The 42-page document contains a summary of the internal control reports of 415 publicly-held insurance companies, focusing on those companies with material weaknesses in internal controls over financial reporting in years ending 2004-2008. (New "Lord & Benoit Report" on NAIC Annual Financial Reporting Model Regulation Released Today, BusinessWire, 6/22/09)

Climate Risk Disclosure, a report from The Corporate Library sponsored by Ceres, the Environmental Defense Fund, and others, says that voluntary disclosure is inadequate to the task. The SEC is obligated to demand broad, uniform reporting of corporate climate-related risk exposure. (The Risks of Climate Change are Already Material, KLD Blog, 6/22/09)

The Interfaith Center on Corporate Responsibility and As You Sow report successful shareowner efforts on resolutions addressing corporate governance, the environment, and human rights following "the catastrophic collapse in governance" in 2008. "There were 722 reported actions in the ICCR database for this proxy season, the biggest number ever. 390 resolutions were actually filed by ICCR members, and the rest led to dialogues with the companies," said Laura Berry of ICCR. (Activist Shareowners Tally Victories in 2009 Proxy Season, Socialfunds, 6/23/09)

An article in Fortune Small Business Magazine features seven great places to work that are inspiring employees and boosting the bottom line by re-defining the employer-employee contract. Three out of the seven companies mentioned are WorldBlu List awardees: South Mountain Company, Seventh Generation, and New Belgium Brewery. Employee ownership and workplace democracy paying dividends as knowledge workers seek "intimate workplaces, cutting-edge benefits and creative input." (Fortune Magazine profiles three WorldBlu List awardees as great places to work, WorldBlu, 6/22/09)

Broc Romanek and Dave Lynn, editors of TheCorporateCounsel.net, continue to provide some of the best coverage of Congressional and SEC activity. On 6/23/09 they discuss the Peters and Durbin Bills. On 6/22/09 they discussed RMG's Preliminary Postseason Report. I try to tune in every day.

"Steve Jobs is not just Apple's CEO; he is its Betty Crocker, its Mickey Mouse, its Tony the Tiger, except for one small difference -- he is a human being... The Apple board, which failed in tying Jobs' pay to performance, failed to prevent him from backdating his options, and failed to acknowledge the damage and culpability of the options that were backdated, has now failed again in its fumbled communication about the state of Jobs' health." Shareowners not only deserve to know the potential impacts on the company's strategy and operations but also an overview of succession planning efforts. (Should Apple Disclose Steve Jobs' Health Issues?, The Corporate Library Blog, 6/22/09)

Recent Delaware General Corporation Law amendments and the current SEC proposals regarding proxy access will likely usher in a new age of "shareholder democracy." Expect Delaware corporations to request bylaw amendments that would provide proxy access for director nominations and reimbursement of proxy solicitation expenses related to those nominations. Both developments are examined. (Is 'Shareholder Democracy' Finally Coming?, Joris M. Hogan, New York Law Journal, June 23, 2009) See also Proxy Access Proposed Rules Published by SEC by Charles Nathan, Alex Cohen, Brian Miller of Latham & Watkins LLP and Rhonda Brauer of Georgeson Inc., The Harvard Law School Forum on Corporate Governance Financial Regulation, 6/23/09.

David Webb continues his extraordinary coverage in Hong Kong. Every market should have someone like Webb plumbing the depths. "OK, it's been 12 days since we took you through all the shenanigans around China Railway Logistics Ltd (CRL, 8089) and PME Group Ltd (PME, 0379). Now we'll move on to what became another piece of this network, China Bio-Med Regeneration Technology Ltd (CBRT, 8158)." (Skin in the game, Webb-site.com, 6/23/09)

PIRC sees a recent a press briefing by Legal & General, one of the UK’s largest institutional investors, as significant. First, just having a briefing indicates a crack in the unwillingness of investors "to be open about their activities as owners." Second, and more substantively, L&G acknowledged that shareholder engagement had not been as extensive or effective as it could have been. They called for annual election of directors, an annual external performance evaluation, renumeration throughout companies to be considered by boards and linked to risk management. They are also reportedly considering whether shareholder votes on remuneration reports should become binding. (Shifting ground, PIRC Alerts, 6/23/09)

A coalition of investors representing over $26 billion in assets sent a letter to Margaret Hamburg, Commissioner of the Food and Drug Agency (FDA), applauding her recent decision to reassess the safety of bisphenol A (BPA), but noting "the lack of regulation by the federal government creates disincentives for companies to invest in the research, development, and deployment of alternatives." Richard Liroff, Executive Director of the Investor Environmental Health Network (IEHN), says "The FDA should act expeditiously to align its regulatory guidance with the burgeoning science; this will provide a strong signal to the marketplace to speed the transition to safer alternatives." (Investors Weigh in on Bisphenol A, Green Century Funds and Shareholders want a better look at BPA, JSonline.com, 6/22/09)

Suing the SEC over Access: Short Sightedness Reigns in the Anti-Access Community, reviews pyrrhic victories and the possibility the Chamber will sue if the SEC moves forward with proxy access. "If the SEC is denied regulatory authority, attention will simply shift to Congress. Already the Shareholder Bill of Rights, in a nicely anticipatory fashion, has a provision that expressly grants to the SEC authority to regulate in this area. The result of a legal victory will be delay (that is, unless Congress acts during the pendency of the litigation) but in the end broad authority for the Commission. With broad authority will likely come more onerous regulation (and less likely to be weakened in the future)." (theRacetotheBottom, 6/22/09)

Activism May Increase with BlackRock's Purchase of Barclays Global Investors

While most have focused on the price paid, assets under management and the growth of BGI, Eric Jackson looks at what the purchase may mean in terms of influence on corporate governance. The combined firm will own $2.8 trillion in assets, the size of nearest rivals State Street and Fidelity combined.

Jackson looked up the voting record of Barclays on Proxy Democracy and found that it ranks at the bottom 11th percentile in terms of "overall activism score." According to the voting record posted on the site, BGI has supported management on executive compensation in 95.4% of the votes. Jackson notes that "BlackRock does have a reputation for speaking up and voting in favor of shareholder-friendly matters. On the Proxy Democracy site, BlackRock's activism score was at the 41st percentile, meaning the company is about average compared with it peers in supporting pro-shareholder votes... The new BGI has a chance to play a powerfully positive role in voting its shares in future corporate elections." (Activist: BlackRock Has Power to Influence (Updated), TheStreet.com, 6/18/09.

I think Barclays takes the position that "say on pay" is likely to be harmful, so it is not surprising that they vote with management on executive compensation issues. Activists can reasonably differ on say on pay. Some, like Barclays, see the potential that say on pay will simply add another safety net to executives on the pay issue. We?re not going to know all the details related to pay, since disclosing strategy would harm competitiveness. And, of course, the execution of strategy should be a prime component in pay for performance. When shareowners vote overwhelmingly for pay that is structured badly, this will simply legitimatize poor pay practices. Say on pay will prove to be a shield.

According to Barclays and others, investors should focus on voting out those who approve the outrageous pay. The ultimate say on pay is say on directors. That's why Barclays is much more active in voting against directors than in supporting most other ESG issues. Their activism score, per ProxyDemocracy, on directors places them in the top 47%, higher than Black Rock, which is in the bottom 29%.

However, I do agree with Jackson's main point; the merger has the potential to tilt this huge fund toward activism. Let's hope that when they merge their proxy voting policies, they take a fresh look and come up with something more in line with ProxyDemocracy's list of respected institutional investors, which announce their votes in advance of annual meetings. A step in that direction might even transform corporate governance more than obtaining "say on pay."

Anticipating its upcoming 40th anniversary, the Interfaith Center on Corporate Responsibility (ICCR) is telling its story through a year-long series of monthly audio podcasts. The series, entitled The Arc of Change, relates how ICCR pioneered the practice of shareholder activism, which has significantly shifted widespread corporate practices to be more in line with the tenets of environmental and social sustainability.

Podcast producers Bill Baue and Francesca Rheannon of Sea Change Media interviewed over a dozen key ICCR figures recounting stories of their struggles – and successes – in convincing companies to change.

ICCR Executive Director Laura Berry said: “In the first Arc of Change episode, I recount the advice I gave my investment clients in my early years as a financial advisor in the 1980s. I counseled them to support new shareholder resolutions on environmental, social, and governance issues filed by the 300-odd faith-based institutional investors who make up ICCR – because they advanced practices that make moral and financial sense.”

The Interfaith Center on Corporate Responsibility is a coalition of nearly 300 faith-based institutional investors representing over $100 billion in invested capital. ICCR members bridge the divide between morality and markets by envisioning a civic economy that integrates ethical, environmental and social values. Inspired by faith, committed to action, ICCR members work to build a just and sustainable global community.

I've been a big fan for about 30 years. I look forward to hearing from Tim Smith and many others who inspired so many of us to get involved in corporate governance. You can also join ICCR's Facebook group to keep up on their activities. Laura Berry and the others involved in bringing this project to fruition are to be congratulated for telling this important story.

Billions of dollars in potential asbestos-like litigation risks for nanotechnology companies and investors are now hidden due to weak regulations governing disclosures of liabilities, according to a major new report from the Investor Environmental Health Network (IEHN). Nanotechnologies are now commonly found in sunscreen, cosmetics, food, clothing, sporting goods and packaging. Yet some of these technologies are showing signs of posing serious hazards to human health and the environment, including the same kind of grave threats resulting from exposure to asbestos, according to the IEHN report.

The good news for investors is that the U.S. Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) are now in the process of examining disclosure requirements and could remedy the eight securities and accounting loopholes identified in the report. IEHN is a partnership of investment managers overseeing more than $25 billion in assets.

Report author Sanford Lewis, counsel to IEHN, said: "In the midst of the current crisis of investor confidence, our report flags a major new argument for demanding honest accounting. Investors cannot afford the repetition of another asbestos-like wiping out of billions of dollars of equity when it comes to new technologies like nanotechnologies that are seeking investment dollars now. This report is a call to action for regulators to bolster the integrity of securities disclosure and financial reporting, and to restore credibility to the investing marketplace. Based on the identified loopholes in securities and accounting rules, the credibility of corporate reports as a means of assessing the financial value of companies is in doubt." The IEHN study identifies eight loopholes in the current system of securities and accounting regulation that currently prevent honest accounting for a firm’s potential liabilities and provides practical solutions.

On May 22, 2009 I wrote the following to the PBGC: "The PBGC has taken over thousands of failed pension funds over the years. Part of my work is researching governance at mostly public pension funds. I would like to learn from investigations that PBGC has conducted into failed pensions. I'm sure there are many lessons learned that could be helpful in avoiding similar mistakes in the future. Please provide a list of forensic investigations undertaken by PBGC of failed pension funds and let me know if these reports are available for purchase. If this list is extensive, please let me know of the latest dozen. Thanks." There has been no response to date.

Opening my copy of the June 1st edition of Pensions & Investments, I was delighted to read their editorial, Deficits and deficiencies. Here are a few highlights:

Latham & Watkins LLP and Georgeson Inc. have begun publication of a series of Proxy Access Bulletins and Analyses. "These publications follow on from prior 2009 publications by each firm dealing with earlier stages in the proxy access debate. By combining thoughtful legal analysis from Latham & Watkins with Georgeson's expertise on trends related to corporate governance, the shareholder voting process and other shareholder matters, we hope to provide you with timely, useful and practical guidance as you navigate the issues created by proxy access." These should be valuable resources to anyone considering comments to the SEC on their important rulemaking.

The Corporate Library announced a conference, The Future of Corporate Reform, designed to give public fund managers and trustees the knowledge and tools to create long-term value, shape corporate reform, and repair the markets. The conference will take place at the Hotel del Coronado in San Diego, CA, from September 8-10, 2009.

Topics include “The New Financial Order – Global Trends that Fund Trustees Need to Understand,” “The Global Equity Markets in the New Financial Order,” “Change In the Boardroom,” “The Future of Policy – The ‘Watchful Eye,’” “Securities Litigation as a Tool For Reform,” and “The Future of Investing.” Sessions will be led by an impressive assembly of investors, academics, policy-makers, and influential thought-leaders from the private and public sector including Bill Clinton, Ben Stein, John C. Bogle and The Corporate Library co-founders, Robert A.G. Monks and Nell Minow.

The conference is co-sponsored by the law firm Coughlin Stoia Geller Rudman & Robbins LLP and class action claims administrator Gilardi & Co. LLC. I plan to attend, so hope to see you there.

Equity Compensation for Long-Term Results, an op-ed by Lucian Bebchuk and Jesse Fried offers advice on how compensation should best be tied to long-term performance. They argue that executives should be prevented from cashing out vested grants of options and shares for a fixed number of years. However, companies should avoid arrangements that block executives from cashing out options and shares until the executive's retirement, or any other event that is at least partly under that person's control. They argue that "hold-till-retirement requirements provide executives with counter-productive incentives to leave the firm in order to cash out accumulated options and shares and diversify risks." (WSJ, 6/16/09)

On the lookout for tag-along activists (Cross Border's IR Magazine, 5/28/09) features a study by Glenn Curtis, director of strategic research at Thomson Reuters, who looked at recent campaigns and the buying activity around the time they were launched. Target companies studied were Biogen, Yahoo, Motorola, Target, Wendy’s and TD Ameritrade. Curtis’ advice is to always communicate with activists – and their tag alongs. "If nothing else, it gives an IRO a feel for where the campaign is heading." Lead activists and possible tag alongs:

A group of former federal regulators, finance professionals and finance scholars, gathered by the Yale School of Management’s Millstein Center for Corporate Governance and Performance, wrote to President Obama to propose a two-phased approach to regulatory reform.

The letter argues that such changes should be linked to the work of the Financial Crisis Inquiry Commission created by Congress. (Democratic leaders will choose six of its members; the Republicans will choose four.) It will have subpoena power, financial support and, presumably, the political clout to conduct a thorough investigation. (What We Need to Know, New York Times editorial, 6/13/09)

The World Environment Foundation, in association with the Institute of Directors, has awarded WNS (Holdings) Limited (NYSE: WNS) with the 2009 Golden Peacock Eco-Innovation Award for its Green Lean Sigma program. According to a press release, "WNS, a leading provider of global business process outsourcing (BPO) services, was recognized by a distinguished panel of judges for its organization-wide initiative, aimed to make WNS a carbon neutral company leveraging Six Sigma, LEAN and ISO methodologies."

The press release goes on to name members of the "distinguished panel of judges." "The Golden Peacock Awards jury is chaired by Justice P N Bhagwati, former Chief Justice of India and Member, UN Human Rights Commission. The jury is comprised of distinguished personalities from the business, political, regulatory and academic communities, including, among others, Rt Hon Joe Clark, Former Prime Minister of Canada; Dr Ola Ullsten, Former Prime Minister of Sweden; Dr Olivier Giscard d'Estaing, Founder and MD, INSEAD; James McHugh CBE, Former Chairman, British Gas; James McRitchie, Publisher Corporate Governance, California; Prof Viviane de Beaufort, Essec Business School, France; Justice M N Venkatchaliah, Former Chief Justice of India and Chairman, Institute of Directors; Gauri Kumar, IAS, Director General, NIFT; and Rakesh Bharti Mittal, Vice Chairman and MD, Bharti Teletech."

While I generally support the work of the World Environment Foundation and the Institute of Directors, as well as the intent of the Golden Peacock awards in recognizing companies that lead in improving productivity, quality and environmental sustainability, I was not asked to, nor did I participate in any effort to judge companies for Golden Peacock awards in 2009. I cannot speak for the other "judges" but I was never provided with information by which to judge WNS Holdings or any other company. Recently, the The contradictions of Madhav Mehra (Guardian News and Media Limited, 5/11/2003) was brought to my attention. I was unaware of this controversy when I attended the 6th International Conference on Corporate Governance (ICCG), 2005 where I presented Making Corporate Governance Decisions That Work for Whom?

The latest news I have seen on this controversy appeared as a Plea to protect environment in The Tribune, Chandigarh, India, 6/13/09. Update 6/16/09, received clarification from Dr A N Saksena, Director General, Golden Peacock Awards Secretariat, which clarifies who was involved in various awards and various other details. I now feel much better about my association with the groups.

The Florida Technology and Growth Act (SB 2310) of 2008 created a $250 million fund dedicated to prudent investment in technology and growth related businesses with significant presence in the state of Florida. Ash Williams, Executive Director and CIO of the State Board of Administration, and Hamilton Lane CEO, Mario Giannini, will present an update on the program and introduce principals of Hamilton Lane who will be working with the State Board of Administration on this effort. June 19th at 9:00 to 10:30 AM, live webcast.

The Obama administration appointed a compensation czar, well-known Washington lawyer Kenneth R. Feinberg, who will have broad discretion to set the pay for 175 top executives at seven of the nation’s largest companies, which received hundreds of billions of dollars in federal assistance to survive. (White House Appoints Czar to Oversee Executive Pay, NYTimes, 6/10/09)

What Is the Impact of Private Equity Buyout Fund Ownership on IPO Companies' Corporate Governance? finds that companies backed by private equity buyout funds were more likely than others to have classified boards, poison pills, and restrictions on director removal by shareholders. Additionally, the report indicates that lucrative consulting agreements for former executives, generous employment agreements, and special bonuses are significantly more common at private equity buyout backed companies. Finally, the analysis indicates that executive compensation at private equity backed companies tended to be higher, less performance-related, and less at-risk than at comparable companies that did not have private equity sponsorship.

The 90-page report was commissioned by the not-for-profit Investor Responsibility Research Center Institute and conducted by The Corporate Library to examine areas related to private equity backed companies' ownership, board characteristics, takeover defenses and compensation policies as compared to non-private equity buyout backed companies. "Whatever benefits there may be to the private equity model, they seem to disappear once a private equity backed company goes public. The findings are contrary to conventional wisdom and significant for investors," said Jon Lukomnik, program director of the IRRC Institute, which commissioned the study.

The Millstein Center for Corporate Governance and Performance at the Yale School of Management today announced the recipients of its second annual Rising Star of Corporate Governance Award. This award recognizes global corporate governance professionals under the age of 40 who are making their mark as outstanding analysts, experts, activists, or managers. The Rising Stars of Corporate Governance for 2009 are:

For those of you itching to prepare your comments on the yet to be released Proxy Access proposal from the SEC, take a look at this post by Broc Romanek, Proxy Access: Debating the Issues (TheCorporateCounsel.net Blog, 6/10/09) He provides useful links to concerns raised by various parties. Also look back to previous comments on prior proxy access attempts. One of my favorite is from Phillip Goldstein's Opportunity Partners L.P.

Peggy Foran, Sara Lee's general counsel, abruptly left after just a year on the job. Previously, Foran worked at Pfizer for 11 years, where she gained a reputation for helping to make Pfizer a corporate governance leader. (Sara Lee general counsel leaves after year on the job, Chicago Tribune, 6/9/09)

CalPERS has invested more than $1.4 billion with private equity firms that hired a former CalPERS board member to represent them, according to Dale Kasler. Arvco Capital Research, whose chairman, Alfred Villalobos, served on CalPERS' governing board in the 1990s, calls itself one of the world's top "placement agents." (Former CalPERS board member helped steer $1.4 billion to equity firms, Sacramento Bee, 6/9/09) Personally, I think Kasler has just scratched the surface. Dig further and he might come up with pay to play. Hopefully, it isn't happening today.

Responsible Shopper, which informs concerned consumers about problem corporate practices, action campaigns and ways to live greener in relation to more than 150 major consumer companies. In a major enhancement of the Web site, ResponsibleShopper.org now ranks companies in 27 industry categories from best to worst based on research focusing on such key issues as human rights, social justice, environmental sustainability and more. Now, they've added a section on "Big Pharma" to help identify which brand-name pharmaceutical giants fight against generic manufacture of their prescription medications – keeping their profits high, and cheaper versions of their drugs off the market. Find out which companies are outsourcing their clinical trials to private contractors in developing countries. And find out who isn't informing customers about possible side effects of experimental drugs, leading to severe permanent health problems – from kidney, liver, and heart damage to neurological injuries and even death.

SEC Commissioner Luis A. Aguilar will serve as the Commission's primary sponsor of the newly formed Investor Advisory Committee to give investors a greater voice in the Commission's work. The Committee will advise the Commission on matters of concern to investors in the securities markets, provide the Commission with investors' perspectives on current, non-enforcement, regulatory issues; and will serve as a source of information and recommendations to the Commission regarding the Commission's regulatory programs from the point of view of investors. The Advisory Committee will be co-chaired by Richard (Mac) Hisey, President of AARP Financial Incorporated and AARP Funds, and Hye-Won Choi, Senior Vice President and Head of Corporate Governance for TIAA-CREF. Fred Joseph, President of the North American Securities Administrators Association and Securities Administrator for the State of Colorado, will be an ex officio participant. (SEC press release, 6/3/09) It look like a great group, representing diverse interests. We look forward to providing our input.

Broc Romanek's Proxy Season Developments: Ten Signs that Things are Changing Online. A very good list of recent innovations. I was glad to see him mention Jackie Cook's FundVotes and the emergence of proponent sites designed to solicit mutual funds, such as ExxonMutualFundShares.org spearheaded by Robert AG Monks, Sister Patricia Daly, Neva Rockefeller Goodwin, and Stephen Viederman. One group Romanek has mentioned before but didn't include in this list is ProxyDemocracy, where investors can compare mutual fund voting (much like FundVotes but not as comprehensive re number of funds covered). However, on Proxy Democracy you can also see how nine funds are voting prior to elections. They just brought on CalSTRS. This will be the place for retail shareowners to go to see how others are voting. Additionally, they are now beta testing a platform that allows you to vote your shares right on the site. Another important development is the rise of educational sites like Shareowners.org, to help shareowners understand and take action on their rights as owners of publicly held companies. Key to the future is the ability of beneficial owners to put pressure on mutual fund voting.

Charles M. Nathan provides a good background of proxy access, at least since 2003 in The Battle for Shareholder Access: The Current State of Play. It is well worth going back to look at comments provided on the last two attempts by the SEC to provide some limited for of access. One of my favorite sets of comments is from Phillip Goldstein's Opportunity Partners L.P. Les Greenberg, who I joined in August 2002 in petitioning the SEC for access rights, has already characterized the SEC proposal "a sham upon the investing public," because it grants equal access "only for a small number of wealthy shareholders." (SEC plan may alter board elections, Pittsburgh Post-Gazette, 5/31) Let's see how much better we can make the current proposals.

At YouTube, check out Richard Murphy on tax and corporate accountability. Dr. Susan Mangiero blogs on her hope that employees will begin demanding DB plans. (Employee Benefit Plans Built to Last, Pension Risk Matters, 5/28/09) Yet, with unemployment running near 10% in the US, workers don't seem to be in the position to demand much of anything. Keeping what we have; maybe finally getting national health care. Raquel Pichardo-Allison interviews Joe Dear in The wind of change, Global Pensions, 5/29/09)

This morning, the SEC held a hearing on proxy access. By a three to two vote, Commissioners voted for proxy access. Democracy in corporate governance will dramatically improve with our right to nominate and elect directors, even if limited to 25% of the board. Directors may actually begin to feel dependent on the will of shareowners.

While waiting to see the actual language of the rule proposal, please take a few minutes to read and submit comments on a rulemaking petition that a group of ten filed with the SEC on Friday, May 15th, to amend Rule 14a-4(b)(1). The petition seeks to correct a problem brought to our attention by John Chevedden. See petition File 4-583 http://www.sec.gov/rules/petitions.shtml. Send comments to rule-comments@sec.gov with File 4-583 in the subject line.

The problem is that when retail shareowners vote but leave items on their proxy blank, those items are routinely voted by their bank or broker as the subject company's soliciting committee recommends. Current SEC rules grant them discretion to do so. As shareowners who believe in democracy, we have filed suggested amendments to take away that discretionary authority to change blank votes, or non-votes, as they might be termed. We believe that when voting fields are left blank on the proxy by the shareowner, they should be counted as abstentions.

This problem is not the same as "broker voting," which has already been repealed on "non-routine" matters and, we hope, will soon be repealed for so-called "routine" matters, such as the election of directors. For example, even though "broker voting" has been repealed for shareowner resolutions, if a shareowner votes one item on their proxy and leaves shareowner resolutions blank, unvoted, those blank votes are routinely changed to be voted as recommended by the company's soliciting committee.

See two examples. At Interface, I voted only to abstain on ratification of the auditors. Yet, you can see ProxyVote automatically fills in my blank votes with votes as recommended by the soliciting committee. A second example, at Staples, shows much the same. You can see blank votes that are changed also include the shareowner proposal to reincorporate to North Dakota, even though such proposals are not considered routine and are not subject to "broker voting."

Just as broker votes should be eliminated so that votes counted reflect the true sentiment of shareowners, the practice of converting blank votes to votes for management should also end.

In our petition, we also highlight a secondary concern. When shareowners utilizing the ProxyVote platform of Broadridge vote at least one item and leave others blank, the subsequent screen warns them that their blank votes well be voted as recommended by the soliciting committee. This provides an opportunity to the shareowner to change their blank vote before final submission, if they don't want it to be voted as recommended.

Of course, if we are going to have a system that allows the votes of shareowners to be changed, it is salutary of Broadridge to provide advanced notice. We applaud them for that effort. However, we note that it may fall short of what the SEC requires. Rule 14a-4(b)(1) requires that when a choice is not specified by the security holder, a proxy may confer discretionary authority "provided that the form of proxy states in bold-face type how it is intended to vote the shares represented by the proxy in each such case." (my emphasis)

Broadridge says that shareowners using ProxyVote are communicating "voting instructions" to their bank/broker. They are not voting a proxy. Since Rule 14a-4(b)(1) pertains to "forms of proxy," not the "voting instruction form," there is no violation. However, subdivision (1) refers to the "person solicited" and the need to afford them opportunity to specify their choices. The person being solicited is the beneficial shareowner. Therefore, unless the subdivision applies both to a voting instruction and a proxy, the requirements to indicate with bold-face type how each field left blank will be voted loses meaning.

However the SEC interprets the current rule, we hope they move forward with a rulemaking to remove discretion to change blank votes and to require blank votes to be counted as abstentions. While the petition is being considered for action, we hope Broadridge will modify its system to clearly indicate in red bold-face type how votes will be cast for each item where a blank vote will be changed.

A few months ago, The Millstein Center for Corporate Governance and Performance released Voting Integrity: Practices for Investors and the Global Proxy Advisory Industry. While this important briefing was primarily focused at the proxy process for institutional investors, the need for integrity applies equally to the votes of retail investors:

There's plenty of news stored in Archives. The news may be slightly older but, frankly, many of the issues covered are still current... going back to 1995. Thankfully, we have made progress on many issues and 2009 should yield a victory for proxy access.