CorpGov Bites

What’s the difference between the role of advisors and a board of directors for a start-up? At what point in your development should you build each group? Tips for creating an Advisory Board or Board of Directors: choosing the right people, defining objectives and expectations and compensation issues (i.e. What’s in it for them?) Common pitfalls to avoid Find out how having with the right advisors and board members can help you build your business. Moderator: Ron Close Panel: David Pasieka, Kerri Golden and Bill Wignall. (The Role of Advisory Boards and Boards of Directors, video format – 2009/10, MaRS

California state pension funds going broke, Stanford study finds (Stanford University News, 4/5/2010) “The simulation shows that the state would need to invest more than $200 billion, and possibly as much as $350 billion, today to return the fund to a minimum responsible level of funding.” CalPERS Response to Stanford Policy Brief on Public Pension Funds (4/6/2010) “The study relies on data when the system had $45 billion less in assets than it has today.” Findings are based on a mathematical model that uses current interest rates, which are very low and make liabilities appear to be much higher, in a manner inconsistent with accounting standards. Pension reform issue in race for governor (CalPensions, 4/7/2010)

Blackstone Group LP, the world’s largest private equity firm, is challenging a California Public Employees’ Retirement System proposal to prohibit money managers from dangling contingency fees in front of middlemen who help win pension fund contracts. (Calpers, Blackstone Clash Over Placement Agent ‘Jackpot’ Fees, BusinessWeek, 4/7/2010)

Unilever stopped providing earnings guidance. The initial impact of that was a 6% drop in the share price. But things have bounced right back since then. Is it time to shift from maximizing shareholder value? (IR magazine) (Time to shun short-termism, InvestorsChronicle, 4/7/2010) Executives lack the incentive to begin investments that they will not be around to see through, and decisions made to boost short-term profits can undermine relationships built up over many years.

The Center for Political Accountability (CPA) and the Council of Institutional Investors jointly sent letters to 427 of the companies in the S&P 500 stock index, asking them to disclose all their political contributions. As of early March, 46 resolutions on corporate political spending had been filed for 2010, versus 48 for all of last year, according to proxy advisory firm RiskMetrics Group Inc. (Shareholder groups seek to limit corporate contributions, Christian Science Monitor, 4/5/2010)

“The lawmen and bandits who fought it out at the infamous O.K. Corral in 1881 had no idea how the showdown would play out – and neither will you if your company becomes an activist’s target. But that doesn’t mean you can’t be prepared. Maureen Wolff-Reid offers four steps, including Stay Out of the Crosshairs, Keep Your Friends Close . . . , . . . And Your Adversaries Even Closer, Be Quick on the Draw. (Winning the Gunfight at the Proxy Corral – Four Steps to Prepare for Shareholder Activism, Sharon Merrill Associates, 4/7/2010)

“Within a week of Sen. Christopher Dodd (D-Conn.) unveiling his 2,200-page finance reform legislation, more than 750,000 articles had been published about it, pushing, prodding, and analyzing its provisions.” Stephen Davis and Jon Lukomnik advise against squandering time on crystal-ball-gazing, since “the most interesting part of the Dodd bill’s governance provisions is how much of them fall into step with trends already well under way.” (A Closer Look at Dodd Bill’s Governance Provisions, Compliance Week, 4/6/2010; see also NACD Washington Update: More Efforts to Federalize Governance, Directorship, 4/7/2010)

Ceres has released the 21st Century Corporation: The Ceres Roadmap to Sustainability as a vision and practical roadmap for integrating sustainability into the DNA of business—from the boardroom to the copy room. It analyzes the drivers, risks and opportunities involved in making the shift to sustainability, and details strategies and results from companies who are taking on these challenges. This Roadmap is designed to provide a comprehensive platform for sustainable business strategy and for accelerating best practices and performance.

62% of top-quartile mutual funds for the 10 years through Dec. 31 suffered stints of five-year below-median performance along the way, according to investment consultant Dimeo Schneider. (Don’t give up too soon, study finds, P&I, 4/5/2010)

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