Archive | December, 2009

Two Overlooked Lessons From the Financial Crisis

In the year-end reflections two contributing factors deserve more attention. First, "prophetic warnings" from religious groups on the dangers of subprime loans via shareowner resolutions. Second, a call from Sanford Lewis for boards to revoke implicit policies of "don’t ask, don’t tell" with regard to liability issues. The current financial meltdown should remind us of […]

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Whole Foods: Progress But Still a Lapdog Board

As I previously posted, Whole Foods Splits Positions, WFMI’s shareowners are making progress. Now, I see from their SEC filing they did more than split CEO and Chair positions. Additionally, our board of directors amended Article IX of our bylaws to provide that, in order for shareholders to approve an amendment to, or a Bylaw […]

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Directors From Failing Boards: A More Nuanced Approach

Gretchen Morgenson’s What Iceberg? Just Glide to the Next Boardroom (12/26/09) tells of directors who were supposedly minding the store as disaster struck at companies like Countrywide Financial, Washington Mutual or Fannie Mae and how many have moved on to other boardrooms. Morgenson’s article implied that shareowners should vote them out at their new companies. […]

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Top Ten for 2010

Ira M. Millstein, Holly J. Gregory and Rebecca C. Grapsas of Weil, Gotshal & Manges LLP offer up Ten Thoughts for Ordering Governance Relationships in 2010, including recommendations for boards, shareowners and regulators. This Week in the Boardroom: 12/24/09 TK Kerstetter and Scott Cutler also addresses their Top 10 Board Issues for 2010. Response to […]

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Fix the Boards – Fix the System

Gillespie and Zweig hit all the bases for a solid home run. They tell us how the game is fixed and how the rules can be changed to play fair. After all, shareowners own the "ball" and all the other equipment. Will we listen? Even more importantly, will we act?

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Corporate Governance Idol

We’re all critics now with TV shows like American Idol, So You Think You Can Dance?, Project Runway, Top Chef, etc. Stephen Marche calls out an important trend in Is "American Idol" Holding America Together? (Esquire, 01/10) Here are a few snippets: The sense of entitlement to judge everyone and everything, all day and every […]

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I Read Morgenson; Now What?

You’ve read Gretchen Morgenson’s What Iceberg? Just Glide to the Next Boardroom (NYTimes, 12/26/09) about failing directors moving to other boards, now what? CorpGov.net offers advice on action you can take.

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Moving Toward Democracy

Andrea Bonime-Blanc and Mark Brzezinski, writing for the NYTimes (Business and the Way of Democracy, 12/26/09) argue “Much like transitions to democracy over the past four decades transformed governments from mostly authoritarian to mostly democratic, we are currently witnessing a transformation of global corporations from a more or less opaque shareholder-centric model to a more […]

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CEO Greed Doesn't Work for Shareowners

“Firms that pay their CEOs in the top ten percent of pay earn negative abnormal returns over the next five years of approximately -13%. The effect is stronger for CEOs who receive higher incentive pay relative to their peers. Our results are consistent with high-pay induced CEO overconfidence and investor overreaction towards firms with high […]

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CII Supports SEC Effort to Increase Potential Liability at Credit Rating Agencies

The SEC is considering a proposal to rescind an exemption that would cause Nationally Recognized Statistical Rating Organizations to be included in the liability scheme for experts set forth in Section 11, as is currently the case for credit rating agencies that are not NRSROs. NRSROs “have generally escaped accountability for their shoddy performance and […]

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Overcoming Short-termism: The Key Issue

Gary Larkin, who blogs for the Conference Board, did a great interview Q&A With Martin Lipton and Richard Ferlauto: Short-termism. (12/09/09) Here’s a snippet on the question, Do you think short-termism played a role in the destruction of long-term shareholder value: Lipton: Absolutely. Short-termism resulted in financial services companies taking undue risk, more so than […]

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Whole Foods Splits Positions

Whole Foods Market Inc. said co-founder and Chief Executive John Mackey has given up the title of chairman in order to conform with current standards for good corporate governance. As of last spring, about 37% of companies in the Standard & Poor’s 500 stock index had separate chairmen and CEOs, up from 22% in 2002, […]

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How Politics Shaped the Political Economy of Global Finance

The Political Economy of Global Finance Capital by Richard Deeg and Mary O’Sullivan review 6 influential books on the topic in light of the recent financial crisis. The most important developments highlighted: the move from a predominant focus on state-centered patterns of regulation to a more comprehensive understanding of the role of states and private […]

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CorpGov Bites

Check out the CorpGov Blog, a work in progress. After years of demands that we have indexed articles, an RSS feed and other advantages of blogs, we’re finally beginning to adapt. With our 15th anniversary coming up in 2010, maybe it is time to join the 21st century. Your feedback is appreciated, either via e-mail […]

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Global Perspectives on Corporate Governance and CSR

Edited by Güler Aras and David Crowther, Global Perspectives on Corporate Governance and CSR is a vital exploration of issues around the possibility of developing theories and practice aimed at good corporate governance and good corporate behavior. In the opening essays, the editors slice and dice the topics several different ways. They look at governance […]

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Guest Commentary From Glyn Holton: Emergency at Intel

Intel Corp. recently announced they will no longer hold annual shareholder meetings. Instead, they plan to host shareholder forums, or “virtual shareholder meetings.” In 2000, Delaware enacted legislation allowing corporations to do exactly this. Arrogantly, that state’s legislators granted shareholders no say in the matter, leaving the decision solely to the discretion of corporation’s entrenched […]

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