The Canadian Coalition for Good Governance’s (CCGG) has issued a revised report on Building High Performance Boards. Here’s a quick overview with just a few examples of best practices highlighted — the report contains many more: Facilitate shareholder democracy Allow shareholders to vote for individual directors; no slates. All directors should be up for election […]
Archive | March, 2010
GRId Analysis
James McRitchie, 03/31/2010 ,
Subscribers to TheCorporateCounsel.net can listen to a podcast that provides a quick excellent overview to RiskMetrics Group’s new Governance Risk Indicators (“GRId”). (Inside Track with Julie: Ning Chiu on RiskMetrics’ GRId (3/26/10)). Another good overview is posted to mondaq.com (United States: Adapting to RiskMetrics Group’s New Governance Risk Indicators System, 3/30/10). “In comparison to the […]
Engagement Survey
James McRitchie, 03/31/2010 ,
In collaboration with the IRRC Institute, RMG/ISS is conducting a study of the state of issuer-investor engagement in the U.S. As an initial step, they are seeking input from a broad base of issuers and investors on their engagement activities. They developed a short survey that investigates the issues, goals and outcomes of engagement. Responses […]
Fiduciary Duty for Sustainability
James McRitchie, 03/31/2010 ,
The nation’s largest private water utility company has joined a federal lawsuit that aims to force the manufacturer of atrazine, a widely-used herbicide, to pay for its removal from drinking water. The class action lawsuit was filed in U.S. District Court for the Southern District of Illinois alleging that Syngenta, Inc. made billions of dollars […]
Our Favorites
James McRitchie, 03/30/2010 ,
As we continue migrating material from out 15 year old Corporate Governance Site, we have now updated and moved over our Stakeholders page. These publications and organizations are our primary reference groups, those who contribute regularly to our “vocabulary of meaning.” We look to them as leading authorities in explaining movements and motives in the […]
Church Investors to Vote as a Bloc in UK
James McRitchie, 03/30/2010 ,
PIRC Alerts reports that the UK Church Investors Group (CIG) issued a report on executive pay saying that a ratio between the pay of the top executive and that of the average pay of the lowest 10% of employees in excess of 75 times would be hard to justify. They’ve adopted a common framework. PIRC […]
CEO Jet Set: BofA Gets Finger
James McRitchie, 03/30/2010 ,
A free report from The Corporate Library concludes that expenses related to CEOs’ personal use of corporate aircraft increased by over 9% at the median between 2007/2008 and 2008/2009. The increase occurred as the incidence of personal corporate jet use held steady. The report, titled “Proxy Season Foresights #8: CEOs’ Personal Use of Corporate Jets […]
Nomination Lessons From Sweden
James McRitchie, 03/29/2010 ,
Tomorrow’s Company, a UK-based business-led think-tank issued a report, backed by activist investor Cevian Capital, calling for UK-listed companies to invite big shareholders to join their board nomination committees. According to the report, Swedish shareowners play a direct role in selecting and sometimes removing board members. Nomination committees typically include four or five of a […]
Alarm Bells at Waddell & Reed
James McRitchie, 03/26/2010 ,
Shareowners of Waddell & Reed Financial Inc. will soon receive a troubling letter from CEO Henry Herrmann in advance of the company’s April 7 annual meeting. In a special solicitation filed alongside the company’s proxy statement, Mr. Herrmann claims in bold print that giving shareowners an advisory vote on his compensation and that of other […]
Converting Funds to Roth IRA
James McRitchie, 03/24/2010 ,
No, nothing to do with corporate governance but since current income limitations on Roth contributions and conversions will be lifted this year, many are looking at the possibility of rolling differed compensation into a Roth IRA. The Roth IRA Conversion Evaluator from Putnam is worth a quick look. It only took me a couple of […]
Directors & Boards
James McRitchie, 03/24/2010 ,
The current edition features a cover article, The Great Divide: Separating the Chairman and CEO Roles. Thought leaders tackle the issues involved in splitting the two top leadership positions of the corporation. On one side of the debate: “The development is inexorable,” says Ira Millstein. “Beware the simplicity of saying two heads are better than […]
SVNACD: New Proxy Rules on Executive Compensation
James McRitchie, 03/23/2010 ,
What are the new SEC disclosure rules for executive compensation, especially the “risk” to the corporation of their compensation plans? How are companies dealing with these new rules — what do the early returns from this proxy season indicate? Are these new SEC requirements more of an annual risk assessment of compensation than disclosure rules […]
Club Memberships for CEOs Continue
James McRitchie, 03/23/2010 ,
Despite all the talk of restraint and cost cutting, there were actually more CEOs with club membership fee benefits in 2008/2009 than in 2007/2008, according to a study just released by The Corporate Library. (2010 Proxy Season Foresights #7: Club Membership Benefits Holding Steady) Key findings: Club memberships were provided to 382 CEOs in 2008/9 […]
Blog Influence
James McRitchie, 03/23/2010 ,
As reported by Dominic Jones on the IR Web Report, financial websites and blogs are the top influences on U.S. individual investors. Those under age 40 are more heavily influenced by family, friends and work colleagues than are older investors. The influence of financial advisors is waning. (Financial websites and blogs most influential with individual […]
AFL-CIO Key Votes
James McRitchie, 03/23/2010 ,
Since 1997, the AFL-CIO’s Key Votes Survey has helped pension fund trustees fulfill their fiduciary obligations to monitor their investment managers’ proxy voting performance. The proposals included in the Key Votes Survey are submitted by a variety of union-sponsored and public pension funds, employee shareholders and other investors and are consistent with the AFL-CIO Proxy […]
Corpgov Bites
James McRitchie, 03/22/2010 ,
The Vote is Cast: The Effect of Corporate Governance on Shareholder Value by Cuñat Martinez, Vicente, Gine, Mireia and Guadalupe, Maria (February 17, 2010). Available at SSRN: http://ssrn.com/abstract=1555961 Results show that passing a corporate governance provision generates a 1.3% excess return on the day of the vote. This implies the value of a governance provision […]
ICGN Issues Global Guidelines for Setting Non-executive Director Pay
James McRitchie, 03/22/2010 ,
In new calls for strengthened accountability, transparency and alignment in non-executive director pay, the International Corporate Governance Network (ICGN) is specifically calling for pay to consist solely of a combination of a cash retainer and equity based remuneration. The ICGN also calls for the elimination of perquisites for non-executive directors. Commenting on the new Guidelines […]
Take a Stand Today as a ShareOwner
James McRitchie, 03/22/2010 ,
Joe Mont writes New Efforts Push Investors to Take a Stand (thestreet.com, 3/22/2010). When shareowner returns slid, CEOs continued to be paid 319 times what the average employee drew down. The checks and balances built into corporate governance don’t seem to be working. And how could they, when only 20% of individual shareowners bother to […]
Collective Intelligence: Governance Systems for the Modern World
James McRitchie, 03/19/2010 ,
Governance in a Disenchanted World: The End of Moral Society by Helmut Willke reasserts the spirit of liberalism invoked during the American and French Revolution when moral attitudes based on religion were trumped by secularization and the invention of modern politics and law. According to Willke, we are now facing second revolution, which will replace […]
More Regulatory Oversight for Proxy Advisors?
James McRitchie, 03/17/2010 ,
Two of the members of the Shareholder Communications Coalition — the Society of Corporate Secretaries & Governance Professionals and the National Investor Relations Institute — have developed a Discussion Draft on Proxy Advisory Services, to help policymakers and regulators in their review and evaluation of the proxy voting systems. The Discussion Draft presents recommendations for […]
UK Funds to Combine Voting Clout
James McRitchie, 03/17/2010 ,
Two of the UK’s largest pension funds, Railpen and the Universities Superannuation Scheme (USS), have formed an alliance to coordinate their share voting at company meetings, with a view to creating a global voting resource to be used by other pension funds. (UK pension funds, Railpen and USS, create shareholder voting alliance, Responsible Investor, 3/17/10) […]
"Own the Fed" Rally
James McRitchie, 03/17/2010 ,
Unlike the growing popular movements of angry Americans who want to end the Fed or have it controlled by Washington politicians and bureaucrats, the “Coalition for Capital Homesteading” wants every citizen to “Own the Fed.” This new Coalition held its first rally at the Fed in 2005 to mobilize, transform and democratize the Fed and […]
Dodd Bill: Majority Vote Provisions
James McRitchie, 03/16/2010 ,
Senator Dodd finally introduced his bill. I’m sure it will get a massive coverage and comment. I will have little to add. Find a quick overview at The Corporate Library (Dodd’s Bill, 3/15/10). The Dodd Bill: Weighing In at a Portly Six Pounds, by Broc Romanek at TheCorporateCounsel.net/Blog provides the best guide I’ve seen. However, […]
Apache v Chevedden: Postmortem
James McRitchie, 03/15/2010 ,
There seems to have been more news coverage going into court than coming out. Although the United States Proxy Exchange, which submitted an amicus curiae memorandum to protect shareowner rights, and Susman Godfrey L.L.P., who’s firm sued John Chevedden on behalf of Apache, both issued press releases, only Susman Godfrey’s seem to have been read […]
Murray Hill Inc. for Congress
James McRitchie, 03/13/2010 ,
“Until now, corporate interests had to rely on campaign contributions and influence-peddling to achieve their goals in Washington,” Murray Hill Inc. a public relations firm, said in a statement. “But thanks to an enlightened Supreme Court, now we can eliminate the middle-man and run for office ourselves.” William Klein, a “hired gun” who has been […]
International Investment Linked to Better Corporate Governance
James McRitchie, 03/13/2010 ,
Aggarwal, Reena, Erel, Isil, Ferreira, Miguel A. and Matos, Pedro P., Does Governance Travel around the World? Evidence from Institutional Investors (October 5, 2009) claims paper may be “the first to establish a direct link between international portfolio investment and the adoption of better corporate governance standards that promote corporate accountability and empower shareholders worldwide.” […]
Corpgov Bites
James McRitchie, 03/12/2010 ,
Catching up after Apache v Chevedden, here are a few news bits that caught our attention. The Business Roundtable: The Most Powerful Corporate Business Club Most Americans Have Never Heard of That’s My Money You’re Using – Ronald Gilson and Michael Klausner argue that after Citizens United managers should be required to seek shareowner approval […]
Pyrrhic Victory? Apache Delays Shareowner Proposal, Loses Attempt to Require Broker Letters From DTC
James McRitchie, 03/10/2010 ,
March 10, 2010, Press Release from the United States Proxy Exchange (USPX). Shareowners are celebrating a dramatic win in the Apache vs. Chevedden lawsuit, which was decided in an expedited manner by Judge Lee H. Rosenthal in Federal District Court in Houston today. Shareowners were glum when the judge’s decision first arrived. It started by […]
Hyperbolic Message With Unconstrained Abandon: Apache v Chevedden
James McRitchie, 03/10/2010 ,
As regular readers know, I’ve joined with Glyn Holton of the United States Proxy Exchange (USPX) recently in defending a direct assault on shareowner rights that came in the guise of a lawsuit by Apache, a $33 billion company, against John Chevedden. (see Who Should Submit Shareowner Proposals?, HLS Forum on Corporate Governance and Financial […]
Turned Down at WFMI Again: Still, There is Progress
James McRitchie, 03/08/2010 ,
John Chevedden helped me draft and defend a resolution at Whole Foods Markets that requests the Board to adopt a policy establishing an engagement process with proponents of shareowner proposals supported by a majority of the votes cast, excluding abstentions and broker non-votes, at any annual meeting. It seemed like a rather straight-forward and simple […]
0.3% of Directorships Voted Down in 2009: Will 2010 Be Different?
James McRitchie, 03/08/2010 ,
The Corporate Library announced a new enhancement to its Board Analyst® product: the ability to visually flag specific areas of potential concern for individual directors. (‘Director Flags’ Zero In On Potential Areas of Concern for Individual Board Members, The Corporate Library Blog, 3/8/10) With the end of “broker voting” for directors and the adoption by […]
Who Should Submit Shareowner Proposals?
James McRitchie, 03/05/2010 ,
In Apache v. Chevedden, Apache’s court brief says: “When it comes to shareholder proposals, Apache is the ‘David’ and Chevedden is the ‘Goliath.’” That seems strange coming from a $33 billion market cap company. However, after reading their brief, I agree; the company seems to be at a disadvantage. They don’t seem to know how […]
Apache vs. Chevedden Takes Dramatic Turn
James McRitchie, 03/05/2010 ,
The drama of a retail investor fending off a sweeping lawsuit by a $33 billion corporation took a dramatic turn today, as the United States Proxy Exchange (USPX) intervened, filing an amicus curiae (friend of the court) brief in Federal District Court in Houston. John Chevedden, a retail investor and champion of shareowner rights, is […]
Support CorpGov.net: Micropayments with Kachingle!
James McRitchie, 03/02/2010 ,
For nearly fifteen years CorpGov.net has survived on ad revenue, occasional consulting and investments. Ad revenue is down even as visits increase. Continued funding is important. After looking at the options for funding, we chose Kachingle, an innovative social micropayment service that enables readers to easily make ongoing, voluntary micropayments to sites like ours. Kachingle […]
Not All Public Pension Funds are Underwater: Florida SBA Reports
James McRitchie, 03/01/2010 ,
The Florida State Board of Administration (SBA) released its mid-year investment performance for the period ending December 31, 2009, highlighting an investment gain of 16.3% in the Florida Retirement System Pension Plan (FRS) since the fiscal year ending June 30, 2009. Last June, the fund had net assets totaling $99.6 billion, compared to $113.1 billion […]